United and Continental announce merger

3 May 2010 by BusinessTraveller

United and Continental Airlines have ended speculation by announcing a "merger of equals", with the new carrier to be named United Airlines, but with aircraft sporting the Continental logo and livery. A mockup of the new livery can be seen below.

Current Continental CEO Jeff Smisek will become the CEO of the carrier, with United CEO Glenn Tilton becoming non-executive chairman of the airline, until December 31, 2012, or the second anniversary of closing, whichever is closer.

The airline will be headquartered in Chicago, but will maintain "a significant presece in Houston", which will be the combined company's largest hub.

A statement released by United said:

"The combination of United and Continental brings together the two most complementary networks of any U.S. carriers, with minimal domestic and no international route overlaps. The combined company will offer enhanced service to Asia, Europe, Latin America, Africa and the Middle East from well-placed hubs on the East Coast, West Coast, and Southern and Midwestern regions of the United States. 

"The combined company will have 10 hubs, including hubs in the four largest cities in the United States, and will provide enhanced service to underserved small- and medium-sized communities. The combined carrier will continue to serve all the communities each carrier currently serves. Together, Continental and United serve more than 144 million passengers per year as they fly to 370 destinations in 59 countries."

The merger is expected to be completed by the fourth quarter of 2010, on condition of "approval by the shareholders of both companies, receipt of regulatory clearance, and customary closing conditions".

United and Continental restarted merger talks earlier this year, after previous dicussions were halted in 2008, and rumours of an agreement grew when rival carrier US Airways said it had dropped potential merger talks with United last month (see online news April 22).

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Report by Mark Caswell

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