May 5th, 2010
Monday, the world’s biggest airline was born from the merger of United Airlines and Continental Airlines, two US based carriers. The new airline will use the United Airlines name and will be headed by the Continental CEO, Jeff Smisek, while Glenn Tilton, United CEO will be non-executive chairman till the end of 2012.
The two airlines together fly about 140 million passengers a year in 59 countries worldwide and are both part of the Star Alliance.
Experts say that this deal will save $1 billion a year to the new company, because United and Continental currently operate separate transatlantic services. This merger will make the new United Airlines stronger at Heatrow and will add Continental transatlantic routes to regional UK airports.
Tilton said: “Building on our Star Alliance partnership, we are creating a stronger, more efficient airline, both operationally and financially, better positioned to succeed in a dynamic and highly competitive global aviation industry”. Smisek agrees with the new partner: “The combination brings together the best of both organisations and cultures to create a world-class airline with tremendous and enduring strenghts”.
Doubts come from the unions in a joint statement: “There is potential for this transaction to create a great airline, but there are also risks involved… we have sacrificed too much through years of concessions, furloughs, pension freezes and terminations to accept unwarrented risk, and any risk requires reward”
Experts say the merger might result in higher fares and cuts in capacity.
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