Continental and United merger to create the world´s largest airlines by Zuzana Zelenakova

Two of the biggest American airline carriers, Houston-based Continental Airlines and United Airlines, agreed on a merger. If the deal truly becomes a reality, it would create the world´s largest airline company. The joint company would bear the United name with its headquarters in Chicago. Continental CEO Jeffrey Smisek would become the head of the company while United CEO Glenn Tilton would assume the post of chairman. The company that would come out of the merger would cover the whole world basically with a wide range of choices for travelers. Although the deal is officially described as that of two equals, it is already clear that the United Airlines will have the ! greater deal of power. Not only the headquarters will be in the United´s hometown of Chicago, but it is said the United shareholders will own about 55 percent of the new company. "Now we've got a company that can really clearly compete against Delta," said an airline industry consultant Darryl Jenkins referring to Delta Airlines considered to be the world´s largest airlines when it comes to passenger traffic and fleet size. "Mergers are all about revenue, and this is a tremendous boost for revenue." Due to the recession the United reduced their capacity by 7.4 percent last year, while the Continental went 5.2 percent down. Delta currently has 20 percent domestic market share, however, the joint company of the United and the Continental would have 21 percent. Despite the fact that both sides agreed on merger, the approval from the government is still needed, which won´t be that easy given the current political circumstances. It will take months before the act! ual deal is delivered. The two airline companies have been con! sidering the merger for quite some time. They came very close to it in 2008, but the talks turned out as a failure after the Continental chose an alliance instead.

related story (sgx17151): http://news.yahoo.com/s/ap/us_united_continental;_ylt=AksyBg...

by Zuzana Zelenakova for Cantell TV (http://cantell.tv)

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