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Many woo America West
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January 22, 1999: 8:48 a.m. ET
United, Continental, Delta, Southwest all mentioned as possible partners
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NEW YORK (CNNfn) - Continental Airlines is positioning itself as the obstacle to any merger involving America West Holdings and any other airline -- particularly United.
Besides United, published reports indicate that Delta Air Lines (DAL) also may be interested in America West (AWA), the nation's ninth-largest carrier. America West said Wednesday night that it has been contacted by "a number of airlines" expressing interest in transactions including a merger or strategic alliance.
"The probabilities (of) United, the dominant carrier in the West, buying and merging with the third-biggest carrier in the West (America West) are closer to zero than they are to any other number," Continental Airlines (CAI.B) Chairman Gordon Bethune said in a Thursday conference call.
Bethune says his airline, which has a small stake in and a marketing alliance with America West, would assert its rights regarding any United (UAL) bid. They include the right of first refusal to match any bid made for a controlling stake in America West held by Texas Pacific Group LP.
The Continental chairman also questions whether United could get antitrust clearance for a deal with America West, particularly after the Justice Department filed suit in October to block Northwest Airlines (NWAC) from buying a controlling stake in Continental.
Bethune's comments are underlined by those of Assistant Transportation Secretary Charles Hunnicutt, who mentions the possible acquisition of America West as part of a disturbing trend toward consolidation in the airline industry.
"The consolidation process is not restricted to large airlines but is rapidly taking a number of previously independent airlines out of the competition picture at a time when entry by new airlines is not happening," Hunnicutt says.
Published reports indicate that talks between United and America West were in the very early stages. They also indicate that there might be ways to get around the Continental rights issue, perhaps through a tender offer at a price that would not make it worth Continental's while to fight it.
Reuters quotes an industry source familiar with the situation as saying Delta has held talks with America West. The source tells the news service that while no serious discussions are currently being held, a possible transaction can't be ruled out.
Both the Wall Street Journal and the New York Times indicate that Southwest Airlines has refused to rule out some kind of offer for America West. "Certainly we are not going to foreclose that at this stage," The Times quotes Southwest CEO Gary Kelly as saying, "especially given that the industry seems to be in an aggressive mode of consolidation."
America West stock closed Thursday at 23-1/16, up 3-9/16. 
-- from staff and wire reports
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America West Holdings
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