Continental, United merger to create largest airline
United and Continental Airlines said on Monday they are forming the world's largest airline in a deal worth about US$3 billion (€2.25 billion).
The new United would surpass Delta Airlines in size, which should help it attract more high-fare business travellers.
It will fly to 370 destinations in 59 countries.
Although the United name will live on, and the company will stay in Chicago, it will be run by current Continental chief executive officer (CEO), Jeffery Smisek.
United CEO Glenn Tilton, a long-time advocate of consolidation in the airline industry, will be non-executive chairman for up to two years before Smisek adds the chairman title.
The new parent company will be called United Continental Holdings Inc, and have about US$29 billion in annual revenue based on 2009 results and US$7.4 billion in unrestricted cash.
The airlines said combining would save them US$1 billion to US$1.2 billion a year by 2013, including between US$800 million and US$900 million in new yearly revenue.
The deal would create a giant with major hubs in key domestic markets including New York, Los Angeles, Chicago, Houston and San Francisco and an international network stretching from Shanghai to South America.
It will leave three big US airlines with major international routes - the new United, Delta and American Airlines, with US Airways a distant fourth.
United is currently the third-largest US carrier by traffic, while Continental Airlines Inc, in Houston, is No 4.