United seeking merger partner?

CHICAGO — UAL Corp. CEO Glenn Tilton renewed his call Tuesday for consolidation of the U.S. airline industry but carefully steered clear of speculation his company is seeking a merger partner for United Airlines.

United's parent company said nothing at its first investor day in years to confirm rampant talk on Wall Street that it might be preparing a bid for Continental Airlines Inc. or Delta Air Lines Inc. Tilton didn't discourage it either, however, repeatedly citing the potential combinations with other carriers as "opportunities."

"We are not waiting for opportunities to come to us simply because we haven't identified to you which one works best," he said at the conclusion of a 3 1/2-hour management presentation to more than 75 analysts at a Chicago hotel that also was broadcast on the Internet.

An outspoken advocate of the need to shrink U.S. airline capacity so carriers can operate more profitably, Tilton reiterated that consolidation is "good and overdue for the industry."

Speculation that UAL might make a bid for Continental or Delta ramped up last month after US Airways Group Inc., based in Tempe, Ariz., made an unsolicited offer for Delta. Analysts said the US Airways offer could touch off a long-expected round of consolidation among U.S. network carriers.

United's stock jumped Monday following an analyst's report suggesting UAL might unveil a specific plan in conjunction with its first investor day since before its 2002-06 bankruptcy restructuring.

But Tilton doused that speculation in his opening remarks, indicating he wasn't ready to tip his hand on company strategy in that area.

After rising nearly 4 percent in speculative buying a day earlier, United shares fell $1.30, or 2.9 percent, to close at $43.23 on the Nasdaq Stock Market.

Continental's stock, which had leaped 8 percent Monday on the merger talk, also fizzled on the absence of a deal and on disappointing guidance from the Houston-based carrier, which may now be headed to a small loss in the fourth quarter. Its shares sank $2.54, or 5.6 percent, to $42.88 on the New York Stock Exchange.

J.P. Morgan analyst Jamie Baker said in a note to investors that he was "a bit puzzled as to why the market is increasingly convinced that Continental, the industry's highest-cost producer, is such an attractive consolidation partner."