Continental Air Lines and United Airlines have agreed to a US$3bn (A$3.2bn) all-stock merger which will make the combined entity the biggest airline in the world.
The boards of the two airlines announced that an agreement had been struck on May 3 under which Continental shareholders will receive 1.05 shares in the new United Continental Holdings Inc company for every Continental share they hold. The combined carrier will retain the United name but will feature the Continental logo and livery. Overall, it is expected that the merger will deliver US$1-1.2bn (A$1.1-1.3bn) in net synergies up to 2013.
“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,” said United CEO Glenn Tilton, who will be the combined company’s non-executive chairman until December 31 2012.
“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,” added Continental CEO Jeff Smisek, who will be the CEO of the combined carrier before succeeding Tilton in 2012 to become the carrier’s executive chairman.
Together, the two carriers will have 10 hubs and fly to 370 destinations in 59 countries, and operate a fleet of 693 mainline aircraft. Listed orders, which from United include Airbus A320s, A350 XWBs and Boeing 787s while Continental has 787s, 737NGs and 777s, are all expected to be maintained.
Locally, United flies daily to Sydney and Melbourne, while Continental flies from Guam to Cairns and is also an interline partner with V Australia. Continental also recently concluded a codeshare agreement with Star Alliance partner Air New Zealand.