United And Continental Airlines To Merge

United and Continental Airlines have announced their intent to merge. The merger will create the world's largest airline in annual passenger traffic.

United’s name and Chicago headquarters will be retained, while Continental Chief Executive Officer Jeff Smisek, 55, will become the CEO and United’s Glenn Tilton, 62, will be non- executive chairman, the companies said today in a statement. Each Continental share will be exchanged for 1.05 UAL shares. United and Continental together would take the top spot in global traffic from Delta Air Lines Inc., with hubs in New York and Washington and the most traffic among U.S. carriers on high- fare Atlantic and Pacific routes. The airlines reignited merger talks last month after negotiations collapsed two years ago. “With the recovery of the economy, fuel prices moderating, capital markets opening and both companies having solid liquidity, it was the right time to get involved in merger discussions,” Smisek said today in an interview.

The new company will operate under the United name, but the planes will have the Continental logo and colors. The agreement is subject to approval by shareholders and federal regulators.