United, Continental finalize merger
United Airlines and Continental Airlines finalized their merger on Friday, creating the world's largest airline.
The new company, United Continental Holdings, said full integration would take 12 to 18 months.
The airline will operate under the United name with Continental's iconic globe as its logo and tail livery. It now has a network serving 370 destinations in 59 countries.
UAL chief Greg Tilton is now chairman of the combined company. Continental Chief Executive Officer Jeff Smisek steps into the same role at the new United.
'This is a true merger of equals, bringing together two strong companies and positioning us to succeed in a dynamic and highly competitive global aviation industry. This sets us on a path to create the world’s leading airline from a position of strength, with one of the industry’s best cash positions, industry-leading revenues and a competitive cost structure,” Tilton said in a statement.
Under the $3 billion stock swap, United shareholders own 55 percent of the company and Continental shareholders the remainder. The deal passed the scrutiny of antitrust regulators.
With about $9 billion in unrestricted cash at closing, United expects the merger will deliver $1 billion to $1.2 billion in net annual synergies by 2013, including $800 million to $900 million of incremental annual revenue, 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. On a pro-forma basis, the combined company would have annual revenue of $31.4 billion, based on results for the 12 months ending June 30.
United Continental will be based in Chicago, United's headquarters, and have a major presence in Houston, Continental's headquarters and now the company's largest hub.
Cargo, measured in revenue ton-miles, has increased 23.8 percent at Continental so far this year to 822,955, the company said Friday.
Cargo revenue ton-miles were up 29.6 percent at United through August to 1.3 million ton-miles. Combined the carriers have flown more than 2 million revenue ton-miles.
Delta Air Lines, the next-largest U.S. carrier, reported 1.5 million revenue ton-miles through August.