Merger between Continental and United is finalized
Continental and United Air Lines (UAL) have completed their merger to create the biggest air cargo carrier in the US, excluding integrators FedEx and UPS.
On a pro-forma basis, the combined company will have annual revenues of US$31.4 billion, based on results for the 12 months ending 30 June, 2010. United and Continental’s combined turnover from cargo services in 2009 was around $900 million, compared with almost $800 million at rival Delta.
UAL said it expected to see savings of $1 billion to $1.2 billion a year from synergies resulting from the merger by 2013. This would include between $800-$900 million from expanded customer options,
thanks to the greater scale of network and fleet optimisation.
The airlines will continue to operate as separate brands until they receive a single operating certificate. The Chairman of the new combined carrier, Glenn Tilton said: “This is a true merger of equals, bringing together two strong companies and positioning us to succeed in a dynamic and highly competitive global aviation industry.
“This sets us on a path to create the world’s leading airline from a position of strength, with one of the industry’s best cash positions, industry-leading revenues and a competitive cost structure.”
UAL President and CEO Jeff Smisek added: “With great people, an unparalleled global network, the best new aircraft orderbook among US network carriers and a commitment to superior products and services, we are well positioned for a bright future.”
The new company’s corporate and operational headquarters will be at its largest hub, Chicago, but it will maintain a significant presence in Houston. Continental shareholders will receive 1.05 shares of United Continental Holdings, the name under which the merged firms will trade, for each share of Continental common stock previously held. UAL Corporation shareholders will now own approximately 55% of the equity of the holding company and former Continental shareholders will own approximately 45% An attempt by Continental and United to merge several years ago was blocked on competition grounds.
Source: Damian Brett, IFW News, New Delhi, 04 May 2010