May 3: United Airlines has agreed to buy Continental in a $3 billion-plus deal that would create the world’s largest carrier with a commanding position in several top US cities.
The new United would surpass Delta Air Lines in size, which should help it attract more high-fare business travellers. It will fly to 370 destinations in 59 countries.
The companies insisted the deal is a merger of equals. But United shareholders will hold a majority stake, the airline will be based in United’s hometown of Chicago and it will be called United.
It would be run by current Continental CEO, Mr Jeffery Smisek, however. United CEO, Mr Glenn Tilton, a longtime advocate of consolidation in the airline industry, will be non-executive chairman for up to two years before Mr Smisek adds the chairman title.
The new parent company will be called United Conti-nental Holdings, and have about $29 billion in annual revenue based on 2009 results and $7.4 billion in unrestricted cash.