GREAT NEWS FROM CONTINENTAL

In an industry which is mostly in a state of crisis - financial, labor or security - there were at last really good news. Not surprisingly, they were coming from Continental. The airline announced yesterday that it has ordered dozens of new planes from Boeing, including eight 777s. Of course, compared to airlines like Emirates or Singapore it doesn’t look much, but compared to CO’s home front - the rest of U.S. airlines - it is a very big deal.

In fact, CO is the only U.S. airline that is really renewing its fleet. It has ordered 25 Boeing 787s, but those will probably be delivered sometime around 2012. In the meantime, CO will get more 777s to its long haul fleet, and almost 80 (!!!) new 737s. No other U.S. airline can even dream of such shopping spree, not even the ones that have some kind of orders for new planes.

The picture gets even darker when we look at the “big three”: American, United and Delta. They just have no fleet renewal taking place whatsoever. Not with the short haul fleet and not with the long haul fleet. With American Airlines the picture is pitch dark: DC-9s and B767 are all over the place. It’s a crisis waiting to happen, and it will happen 5 to 10 years from now.

Amid all that there is the constant buzz around airlines mergers. Let me say it clear and short: The DL-NW merger makes sense. The CO-UA doesn’t. After the news of CO’s recent purchase it looks like madness. The dinosaurs are going to be extinct. Only the ones that can adapt will survive. CO will be the main survivor unless someone in its management makes a critical mistake and engage it with an ailing airline, in that case they both drown together.