United finally finds a partner:
United and Continental Said to Agree to Merge
By MICHAEL J. de la MERCED and JAD MOUAWAD
New York Times
Published: May 2, 2010
United Airlines and Continental Airlines agreed Sunday to a $3 billion merger that will create the world’s biggest airline, people familiar with the discussions said.
The boards of both companies approved the all-stock transaction, these people said. A deal is expected to be announced on Monday. The transaction is expected to close in the fourth quarter.
The combined company will keep the United name and will be based in Chicago. It will be run by Continental’s top executive, Jeffery A. Smisek. United’s chairman, Glenn F. Tilton, will be nonexecutive chairman for two years. After that, Mr. Smisek will become the executive chairman.
Jean Medina, a spokeswoman for United, declined to comment. A Continental representative could not be immediately reached for comment.
The combination would jump ahead of Delta Air Lines, which became the top airline after its purchase of Northwest Airlines two years ago. The carriers will have a leading presence in the top domestic markets, including New York, Chicago, and Los Angeles, along with an extended network to Asia, Latin America and Europe.
A combination of United and Continental will have 21 percent of the domestic market share, in terms of available-seat miles, a industry measure of capacity that represents one seat that is flown one mile.
That puts it ahead of Delta, which currently has a 20 percent domestic market share, American Airlines and Southwest Airlines, which both have 15 percent, and US Airways, with 10 percent.
The combination will also account for 7 percent of global capacity, ahead of Delta, the current leader with 6 percent, and American, with 5 percent. United is currently the fourth largest domestic airline by capacity and Continental the sixth.
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