United luring Continental for merger?

TEXT OF INTERVIEW

Bill Radke: That spreading Icelandic ash cloud will be stopping flights to airports in the U.K. and other European countries until sometime tomorrow at the earliest. Meanwhile, the skies here at home are buzzing with talk of a new airline merger. Marketplace’s Jeremy Hobson joins us live from New York. Jeremy, who might merge, Jeremy?

Jeremy Hobson: Well, remember Bill there was talk last week that United was talking about a merger with U.S. Airways?

Radke: Yes.

Hobson: Well now it seems those conversations may have just been an attempt by United to get Continental interested in a merger — one that would create the largest single airline in the world, which is a title currently held by Delta, following its merger with Northwest.

Radke: So why does United want to team up with Continental?

Hobson: Well one reason is cost-savings — perhaps $2 billion in additional revenue, according to one airline analyst. The other thing is global reach, which is something that’s very important to these airlines looking to attract those big-spending business travelers. Continental has a big presence in Latin America and Europe. United has a lot of flights to Asia, so they would compliment each other very well. If they do end up merging though, Bill, there will be a big question about the future of U.S. Airways and whether it can survive as a little player amongst much larger rivals.

Radke: Marketplace’s Jeremy Hobson in New York. Jeremy, thank you.

Hobson: Thanks.