AA, Continental Reported in Talks

HOUSTON — Continental Airlines Inc., already in consolidation talks with United Airlines, also has had discussions with American Airlines, according to a report.

Continental and Fort Worth-based American, a unit of AMR Corp., declined to comment on the report that first appeared Friday afternoon in the Houston Chronicle.

Mark Adams, a Continental pilot who is communications chair for the local affiliate of the Air Line Pilots Association, said he thinks it would make sense for American to be interested in a deal.

“I don’t think you can discount them,” Adams told the Chronicle.

American’s chief financial officer, Tom Horton, recently said consolidation has the potential to create efficiencies, expand product offerings and benefit the industry and consumers.

“So we continue to assess the situation carefully,” he said during a conference call to discuss the company’s fourth-quarter earnings.

American employs 7,000 people in Tulsa, where it has a large jet maintenance base.

According to some industry analysts, American may be too large to win Justice Department approval for a merger.

On Thursday, The Associated Press reported that United and Continental are in advanced negotiations and could complete a combination quickly if Delta and Northwest strike a deal, according to a person familiar with the talks.

But there were still significant issues yet to resolve, according to the person, who was not authorized by the companies to talk about the deal.

Delta Air Lines Inc. and Northwest Airlines Corp. have been intently discussing a deal for several weeks, according to people familiar with the situation. But issues such as combining work forces remain obstacles.

The prospects for an imminent deal seemed to improve Thursday when Air France-KLM, the world’s largest airline by revenue, said it was considering investing in a Delta-Northwest combination.

Such a deal is expected to trigger more consolidation in the highly competitive airline industry.

The Tulsa World Business staff contributed to this story.

Originally published by Associated Press.

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