United to Merge With Continental

(Dive Travel Business News - May 3, 2010) -- More airline mergers in the news this week with the announcement that United Airlines and Continental Airlines will become the world's largest air carrier. The two airlines have agreed a $3.2 billion merger and save the airlines more than $1 billion a year.  The combined group will adopt the United Airlines name with Continental CEO Jeff Smisek heading the company.

Both airlines were once part of the same company in the 1920's and '30's. The move will reconnect corporate bloodlines that have been separated for almost a century.  The deal, which is subject to regulatory reviews, is expected to close in the fourth quarter of this year. By the first half of 2012, the new airline should be operating as United Airlines.

The deal is the first major U.S. airline merger since Delta Air Lines' 2008 purchase of Northwest.  The United and Continental, both part of the Star Alliance, currently fly 144 million passengers a year to 370 destnations worldwide. The combined company will have 10 hubs, with Houston as its largest, and a workforce of nearly 90,000. Expect more consolidation as airlines seek to cut costs and reduce capacity to stay aloft.

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