Airbus A400M Negotiations To Continue

There will be another airline merger in the next two years, United Airlines CEO Glenn Tilton predicted Thursday, noting that close airline partnerships on international routes could pave the way for further consolidation.

But Tilton, who has long advocated mergers, wouldn't say directly if he expects Chicago-based United to be a party to any deal-making.

Analysts think that is likely. United's efforts to closely link operations like ground handling and computer systems with Continental Airlines and the close venture the two are forming to share flying across the Atlantic and Pacific easily could lead to a full financial merging of the two companies.

Continental executives have indicated that while they would prefer to remain independent, they would be open to a deal if Delta Air Lines proves a formidable competitor after absorbing Northwest Airlines.

Delta would gain added muscle if it succeeds in wooing Japan Airlines from American Airlines, as observers and insiders expect. But American CEO Gerard Arpey vowed Wednesday to "vigorously" contest any effort by Delta and JAL to gain antitrust immunity in order to coordinate pricing and flight schedules.

United and Continental, meanwhile, have a jump on their competition. They already have asked federal regulators for antitrust immunity for a joint venture they intend to form with Japan's All Nippon Airways.

Tilton acknowledged he was glad not to be part of the JAL drama and relished the prospect of seeing United's two largest competitors distracted by a protracted battle for the ailing Japanese flag-carrier.

"I'm delighted to be on the sidelines," said Tilton, speaking at a luncheon of the Wings Club, whose members are rooted in the airline industry.