CHICAGO_The head of United Airlines parent UAL Corp. said Tuesday that consolidation in the industry is overdue but remained silent on whether his company is pursuing a merger with another U.S. carrier.
UAL Chairman and CEO Glenn Tilton told analysts and investors that the company will take advantage of consolidation opportunities on merits, otherwise declining to comment specifically on one of the industry's hottest topics.
Speculation that UAL might make a bid for Continental Airlines Inc. or Delta Air Lines Inc. proliferated last month after Tempe, Ariz.-based US Airways Group Inc. made an unsolicited offer for Delta. Analysts said the US Airways offer could touch off a long-expected round of consolidation among U.S. network carriers.
United's stock jumped Monday following an analyst's report suggesting that UAL could unveil a specific plan in conjunction with its first Investor Day in years, with about 75 analysts and investors gathering at a Chicago hotel to hear several hours of scheduled financial presentations Tuesday.
But Tilton doused the speculation in his opening remarks, delivering a familiar pitch on behalf of consolidation but without tipping his hand on the strategy of the Elk Grove Village, Ill.-based company.
"We think it (consolidation) is good and overdue for the industry, despite the fact that we acknowledge its difficulties," he said in remarks broadcast on the Internet.
"With respect to our company itself and our options, we clearly are not in a position today to comment on anything specifically other than to say that we are going to be attentive to opportunities as they present themselves, and on your behalf we will take advantage of one when we think it is to your benefit," Tilton said
After rising 3.7 percent in speculative buying a day earlier, United shares fell $1.85, or 4.2 percent, to $42.68 in morning trading on the Nasdaq Stock Market.
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The chief executive of Continental Airlines Inc. says the company would consider a merger to remain competitive if the industry continues to consolidate.
A United-Continental pairing could face significant obstacles, since Northwest Airlines Corp. may be able to stop it under a 2000 agreement with Continental.
Tilton is optimistic about the Senate Commerce Committee hearing on the subject on Wednesday.