Continental Open to Merger Should Competition Dictate (Update3) – BusinessWeek

Continental Airlines Inc., after calling off a merger with United Airlines two years ago, would resume consolidation efforts to remain competitive, Chief Executive Officer Jeff Smisek said.

Continental, the fourth-largest U.S. carrier, will keep monitoring the progress of Delta Air Lines Inc. following its 2008 merger with Northwest Airlines Corp., he said today at a JPMorgan Chase & Co. aviation conference in New York. Continental’s decision to avoid joining UAL Corp.’s United in April 2008 was correct at the time, he said.

“We’ll continue to watch competitive dynamics,” Smisek said. “If we think it’s in our best interest to bulk up defensively, we’ll do so. But I think it’s premature to make that decision at this time.”

United CEO Glenn Tilton said in January that a merger involving U.S. carriers would be likely in 12 to 24 months, and that the path toward combinations is being smoothed by global alliances. Tilton has advocated U.S. airline industry consolidation since at least 2004.

“Continental is a prize that anybody would want, and it would be a very good fit for United,” Ray Neidl, a New York- based independent airline analyst, said in an interview. “Continental has got a good-sized system, but by no means is it equal to the Delta giant.”

via Continental Open to Merger Should Competition Dictate (Update3) – BusinessWeek.