Carrier Consolidation Talks Continue

According to several published reports on Tuesday, United Airlines Corp and Continental Airlines are considering consolidation and meanwhile AirTran Holdings announced a $290 million stock and cash bid for Midwest Air Group, all while merger talks continue between Delta Air Lines and US Airways. Both The Wall Street Journal and The New York Times reported discussions between UAL and Continental, though specifics were not given and both papers cautioned about the uncertainty of the deal. The potential paring could be blocked by Northwest Airlines, the AP reports, citing a 2000 pact between the two carriers where Northwest received a "golden share" of Continental in exchange for allowing Continental to buy back some of its stock Northwest held. Northwest's stake in Continental gives the carrier the power to block any potential acquisition. Meanwhile on Wednesday, AirTran offered to buy rival Midwest for $290 million, stating that such an acquisition would create a low-cost airline with pro forma revenue of about $3 billion in 2007, reported Reuters. This is the second bid in the last three months AirTran has made for the carrier-the first proposal on October 20 was rejected by Midwest.

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