By Mark Huffman
ConsumerAffairs.Com
May 3, 2010
Big airlines keep getting bigger. In a long-anticipated deal, United Airlines and Continental have agreed to merge -- creating the world's largest airline, serving 370 destinations.
Glenn Tilton, chairman, president and chief executive officer of UAL Corp., will serve as non-executive chairman of the combined company's Board of Directors through December 31, 2012, or the second anniversary of closing, whichever is later. Jeff Smisek, Continental's chairman, president and chief executive officer, will be chief executive officer and a member of the Board of Directors. He will also become executive chairman of the Board upon Tilton's ceasing to be non-executive chairman.
The combined company's management team is expected to include an equitable and balanced selection of executives from each company with the intention that each company will contribute roughly equal numbers, according to a statement from the two carriers. In addition to Smisek and Tilton, the 16-member Board of Directors will include six independent directors from each of the two companies and two union directors required by United's charter.
The holding company for the new entity will be named United Continental Holdings, Inc. and the name of the airline will be United Airlines. The marketing brand will be a combination of the brands of both companies.
Aircraft will have the Continental livery, logo and colors with the United name, and the announcement campaign slogan will be "Let's Fly Together."
Chicago HQ
The new company's corporate and operational headquarters will be in Chicago and it will maintain a significant presence in Houston, which will be the combined company's largest hub. Additionally, the CEO will maintain offices in both Chicago and Houston.
"Today is a great day for our customers, our employees, our shareholders and our communities as we bring together our two companies in a merger of equals to create a world-class and truly global airline with an unparalleled network serving communities worldwide with outstanding customer service," Tilton said.
"Together, we will have the financial strength necessary to make critical investments to continue to improve our products and services and to achieve and sustain profitability," Smisek said.
The merger deal comes after the boards of Continental and UAL Corp., United's parent company, voted Sunday to approve the all-stock deal, valued at more than $3 billion.
For consumers, a merger of two large airlines would normally mean that fewer seats and flights are available, since merged operations tend to cut out overlap and duplication. However, industry analysts said United and Continental have very different route systems, with minimal overlap. United has more flights to Asia while Continental has more flights to Latin America.
