Continental Airlines is history; American likes mergers

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by JASON WHITELY

Bio | Email | Follow: @jasonwhitely

WFAA

Posted on September 30, 2010 at 10:02 PM

Updated Friday, Oct 1 at 10:42 AM

DALLAS — All day long in downtown Houston, employees of Continental Airlines trickled out to take pictures at the end of an era.

On Friday, the Houston-based company is history as it legally merges with United, creating the nation's single largest airline.

Delta and Northwest consolidated first. On Monday, Southwest announced it's buying AirTran.

But American Airlines has yet to find a partner.

Continental's former CEO, Gordon Bethune, said consolidation is only going to increase competition against the Fort Worth-based carrier.

"Absolutely," Bethune said, "And that's great. That's the name of the game. They were the top dogs for a lot of years, and things have changed, and pieces on the chess board are still moving."

Analysts have proposed a marriage between American and US Airways, but American management suggests it is strong enough on its own.

Still, they support consolidation and hope that fewer choices will raise ticket prices — which benefits everyone in the industry.

"We should not fall into the trap of thinking American Airlines is some weak sister out there," said Mike Davis of the SMU Cox School of Business. "They're a very strong airline with an international route structure, but the way the industry is shaking up, they need to be even bigger."

Others, however, say American isn't losing market share and actually gains after Southwest pulls AirTran out of D/FW Airport.

Still, the industry is closing in, leaving fewer potential partners —  with American a smaller player than it once was.

Email: jwhitely@wfaa.com

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