Monday, March 8th, 2010

With cheap airplane tickets and cheap vacation packages so highly valued these days, many travelers are concerned that further airline consolidation could lead ultimately to higher prices. Glen Tilton, United’s CEO, and a long time supporter of airline mergers, commented recently that he expect another major airline merger within the next two years.

Tilton says that the increasingly close partnerships airlines are forging on international routes could ultimately lead to more mergers. Although Tilton would not say if United is likely to merge with another airline, airline analysts speculate that United’s new pact with Continental could eventually contribute to a merger of the two airlines.

Last year Continental left Delta’s Sky Team alliance to join United’s Star Alliance. As a result of their new partnership, Continental and United will share responsibilities for operations items such as fuel purchases and ground handling. This action as well as plans to share flying across the Atlantic and Pacific could contribute to a complete financial merging of these companies.

Continental’s management has commented that its preference is to keep the airline flying as an independent airline. However, it has acknowledged that Continental will reconsider its position if the Delta Northwest merger makes Delta difficult to compete against.