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United, Continental Merge to Create World's Largest Airline


Two U.S.-based airlines, United and Continental, are merging in a $3-billion deal creating the world's largest airline.

The combined firm will have nearly 700 planes, 88,000 workers, and fly to 370 destinations in 59 nations.

The company will be called United Airlines. Continental's chief executive, Jeff Smisek, will be the CEO of the combined company, and United's boss, Glenn Tilton, will be the chairman.

The boards of both companies approved the merger Sunday, but the deal also needs approval by the firms' unions and will be examined by U.S. antitrust (Compton) regulators.

The company hopes to save $1 billion or more per year by eliminating duplicated staff and operations.

That is expected to cut operating costs by eight percent. Fewer flights and less competition will make it easier for airlines to raise fares.

Major airlines have been hurt in recent years by soaring fuel costs, terror attacks, volcanic ash, a recession that cut demand for service, and strong competition from budget carriers.

Cost-cutting measures and the beginning of an economic recovery are helping the major carriers move toward financial health.


Some information for this report was provided by AP.

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