United and Continental complete $3.2 billion merger

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United and Continental complete $3.2 billion merger

Unread post by bimjim » Mon Oct 04, 2010


United and Continental complete $3.2 billion merger
By: Jerry Limone
October 01, 2010

As anticipated, United and Continental completed their $3.2 billion merger on Friday, creating the world’s largest airline.

Eventually, the combined carrier will operate under the United name. In the near term, customers can expect to interact with each carrier as they usually do.

Customers flying on Continental will continue to check in at the airline’s website or at Continental kiosks and ticket counters, and the same goes for United. Customers will continue to earn and redeem frequent-flyer miles through the respective loyalty programs of Continental and United until those programs are combined.

United and Continental foresee a more unified product in the spring of 2011, as the carriers integrate customer service and marketing activities.

The two airlines are now subsidiaries of United Continental Holdings, which began trading on the New York Stock Exchange under the symbol UAL on Friday.

The new company's corporate and operational headquarters will be in Chicago, with a significant presence in Houston, the company's largest hub.

Based on results for the 12 months ended June 30, the combined carrier has annual revenue of $31.4 billion. The airlines expect that the merger will deliver $1 billion to $1.2 billion in net annual synergies by 2013, including between $800 million and $900 million of incremental annual revenue.

Incremental revenue will come from “expanded customer options resulting from the greater scope and scale of the network, fleet optimization and expanded service enabled by the broader network of the combined carrier,” said United and Continental.

United CEO Glenn Tilton and Continental CEO Jeff Smisek are the nonexecutive chairman and CEO of the combined carrier, respectively.

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