Continental and United Finally Announce Merger, Absolutely Nobody is Surprised

The Continental and United merger has finally been announced, and well, there are certainly more questions than answers at this point. I decided to wait until the official announcement came out, hoping that there would be a ton of information in there. Unfortunately, there’s not. In fact, the only thing that wasn’t already out there was that Continental will keep its own logo and branding but with the Varney name. Just kidding, though that would be awesome. Not sure who Varney is? Read below. (The airline will actually keep the United name.) Though this is being billed as a merger of equals, Continental has to be the one in control here.

United in Name Only

Here’s what we know (and it’s not much). Continental and United will merge into a single brand. The brand will be called United, but everything else will be Continental including the logo, aircraft livery, and general branding. The headquarters will be in Chicago where United is currently based. (This was apparently a condition of the deal, otherwise I’m sure it wouldn’t have been this way.) Continental CEO Jeff Smisek will run the show while United CEO Glenn Tilton will sit up top as Chairman for two years, but probably won’t actually be doing anything. He’ll just get to hang out with his cool-guy title and count all the money he’s made over the last few years.

Really, that’s about all we know. Here are a list of questions that I’d like answered, but I’m sure that won’t happen for a long, long time.

  • Will they keep Economy Plus?
  • Will they keep international First Class?
  • Will their labor groups figure out an integration plan before the America West/US Airways pilots do?
  • Will Channel 9 survive the merger?
  • Will any United execs other than Tilton be asked to stay?
  • If not, which small island country will they buy for their retirement?
  • How long will it be before the Cleveland hub disappears?
  • What will they do for inflight entertainment?
  • Did United really just use US Airways to get Continental back to the table?

I’m sure you have more questions, but we just aren’t going to get any answers for awhile. Though talks had been on and off for some time, this latest round was quick and dirty. I think they just had their checklist of big things to figure out and assumed everything else would work itself out later. Apparently, the pilot integration wasn’t on that list, because that still has to be decided.

Labor will be a big issue here because the cultures at the two airlines are so different. I mean, I hear that people at Continental sometimes even enjoy their jobs. Crazy, right? But the work rules are pretty different and there will be some issues as they try to come together, that’s for sure.

This should be very good news for front line United folks. They’ll finally have a leadership team that’s interested in running an airline instead of prettying one up until someone else decided to come along and buy it. But for Continental people, it’s a mixed bag. They should be able to make some gains in some areas, but having that headquarters move to Chicago threatens the strong culture that has helped Continental succeed in the last 15 years. I’d be cautiously optimistic if I were at Continental, but I’d have a lot of concerns.

Who else will love this merger? No, not US Airways. They’re pretty mad. I Walter Varneywas thinking about Walter T. Varney. Who? In 1925, Walter started Varney Air Service in Pasco, Washington. He sold it in 1930 to United Aircraft and Transport which became United Air Lines in 1933. In 1934, he founded Varney Speed Lines in El Paso, Texas. He got out within a year, but in 1937, the airline would become Continental. Can you imagine what he would think if he saw his two airlines become the largest in the world?

I like this merger a lot from a United perspective, especially if it means fresh blood at the top. For Continental, it’s a bit more of a question mark. If done right, this should be a rock star merger. Now let’s just see if they can avoid screwing it up.

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