Kevin O'Toole/LONDON

Continental Airlines chairman Gordon Bethune says that the carrier is still open to merger offers from its major US rivals, but, in the meantime, plans to push ahead with its rapid international expansion outside any global alliances.

Bethune confirms that an approach was made to Delta Air Lines a year ago in the wake of American Airlines' interest in US Airways. Delta and Continental "-looked as though they should fit together", but the deal foundered on the Atlanta carrier's apparent lack of interest.


He does not rule out further possible interest in Continental as a merger partner, based on its strength at Newark New York and as the only major challenger to American's South American dominance. He points to potential compatibility with a range of major US carriers, including Northwest Airlines, United Airlines and US Airways, as well as Delta, which is now under new management.

"I don't think that Continental needs a major partner-but, ultimately, I believe that any industry this mature tends to consolidate, and that it will happen," he says.

For the time being, Continental will continue to expand through a series of specific co-operative deals on an "ad hoc basis" rather than seeking to enter one of the emerging global-alliance groupings.

"We're looking to pick people who make sense, market by market," Bethune told a briefing in London on 2 December, pointing to the airline's rapid growth in Europe based on a series of one-off deals, such as those with Air France, Alitalia and, more recently, Virgin Atlantic.

In the past three years, Continental has expanded its coverage in the region from four to 14 destinations. Bethune believes that the financial sense of co-operation on routes such as Rome-Newark, where Continental is offering 20% better pricing, will survive despite Alitalia's pending alliance decision. The tie-up with Virgin Atlantic, replacing the failed Delta deal, is also due to start on 2 February, allowing Continental to offer tickets on Virgin's flights from London Heathrow Airport.

The US airline has itself requested six services from Heathrow in the event that the UK airport is opened up under a UK-US open skies deal, but Bethune is adamant that the American/British Airways alliance should not be allowed to go ahead, regardless of access to the hub. "It would be better to have no deal than that deal," he says. "You can dress a pig up any way you like, but it's never going to be a ballerina."

Atie-up with Aeroflot is still pending regulatory approval, leading to delays in launching services from Moscow, but Bethune says that a daily service to Newark will be started in the first half of 1998, regardless of the co-operation.

Elsewhere, Bethune says that the airline has "-tentatively selected a large Latin American partner" and is keen to expand into Japan.

Source: Flight International