"We will review our strategic alternatives": Continental Airlines

Published: 16 Apr 2008

Continental Airlines has acknowledged that the Delta/Northwest merger will change the competitive landscape for Continental and the entire airline industry.

In a message to its more than 45,000 employees, coming from Larry Kellner, Chairman and Chief Executive Officer, and Jeff Smisek, President, the airline said: "As we've said repeatedly for more than a year and a half, our preference has been to remain independent as long as the competitive landscape remained the same. However, the landscape is changing. We will review our strategic alternatives and make sure we remain a strong long-term competitor. As always, our goal is to do what is best for you, our co-workers, and our shareholders, customers and the communities we serve."

"One important result of last night's announcement is that it enables us to redeem the "Golden Share" that Northwest owns in Continental. We will also review our continued participation in the alliance with Northwest, Delta and SkyTeam, as we evaluate what course of action would be in Continental's best interest. We will communicate any changes that result from that review."

"As we consider our alternatives, we want to emphasise that we have great strengths. As you know, Continental is an industry-leading airline noted for our Working Together culture. We have an enviable position in the New York market, along with established hubs in Houston, Cleveland and Guam. Our newly acquired access to Heathrow improves our standing in the trans-Atlantic sector, and we have a comprehensive Latin America network and a growing portfolio of routes to India and Asia, including the major Japan and China markets. Continental has the youngest, most fuel-efficient fleet and best new aircraft order book among the major network carriers. And most importantly, we deliver award-winning service to our customers, thanks to your hard work every day."

"The proposed Delta/Northwest transaction is complex, and will be subject to shareholder approvals and a lengthy and rigorous regulatory review process before the transaction can close. During this period -- which will likely take at least six months -- the two airlines must continue to operate at arm's length as independent companies. Despite last night's news, and the speculation about our future that it will provoke, we all need to remain focused on what we do best every day: running a clean, safe and reliable airline with the best customer service provided by the best co-workers in the business. As we've always done in the past, we'll keep up our open, honest and direct communication with you as the future unfolds."

"As Continental considers its strategic alternatives, we will do what we need to do to continue our success and to protect the future of Continental Airlines in a rapidly changing airline industry."

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Pharis said on 16 Apr 08:

The Guam hub is a relatively small but important of business for Continental Airlines. The airline had some self-inflicted damage to its reputation in that part of the world, which people are still complaining about and Continental has done little or nothing to correct.

Two weeks ago, Tommy Remengasau, the president of the Pacific nation of Palau, was at the airport in Manila for a return flight home. He was accompanied by a number of Philippine officials, including Vice President Noli de Castro.

Continental Airlines refused to allow the president to board a flight without being frisked. Remengasau refused, saying he considered it an insult to his office and the people of Palau. He went back to his hotel.

Later, the Philippine government provided a private plane for Remengasau to return home.

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