United agrees Continental merger – UPDATED
The deal, which will result in savings of more than $1 billion a year, is likely to spark further consolidation in the global airline industry.
The combined group will adopt the United Airlines name with Continental CEO Jeff Smisek heading the company.
Glenn Tilton, chairman, president and CEO of United, will serve as non-executive chairman of the combined company’s board until December 31, 2012
The two airlines, both part of the Star Alliance, currently fly 144 million passengers a year to 370 destnations in 59 countries worldwide.
The new combine will fly in Continental’s livery, carrying the United branding.
The joint carrier will gain strength at London Heathrow where both airlines currently operate separate transatlantic services. Continental also runs a network of flights to the US from UK regional airports.
“We have sacrificed too much through years of concessions, furloughs, pension freezes and terminations to accept unwarranted risk, and any risk requires reward.”
Analysts expect the merger could eventually result in higher fares as the combined airline group cuts capacity.
“I recognised that United was the best partner for Continental, and I didn’t want to marry the ugly girl; I wanted to marry the pretty one,” Smisek said.
by Phil Davies
Phil Davies
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