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Continental-UA tie-up grounded
Robert Lea28.04.08
Continental Airlines has aborted its merger with United Airlines, and could instead seek to join an alliance with British Airways.
Continental called off the deal with United over fears for the latter's finances in what is increasingly looking like a recession in the US aviation market.
Continental and United had been aiming to follow a deal struck between Delta Air Lines and Northwest Airlines as America's carriers seek defensive combinations in the long-expected consolidation of the struggling US industry.
The failure of the deal has, however, sparked speculation that Continental is within weeks of signing up to an alliance with American Airlines and British Airways that would allow the carriers to share ticketing and marketing arrangements but would need to be passed by the competition authorities on both sides of the Atlantic.
The pressure is mounting on BA chief executive Willie Walsh to pull off a deal in the new era of easier flying restrictions after the US-EU Open Skies agreement. But with rivals doing deals, he has so far aborted a takeover of the Spanish carrier Iberia or making a move on the US market.
