The heavily anticipated merging between the two enormous legacy carriers is now one step closer to reality. Continental Airlines, (who ranks approximately 4th in size out of US airlines) who is based out of Houston, Texas has agreed to merge with UAL Corporation (United Airlines) who is currently the 3rd largest carrier in the country based out of Chicago, Illinois. I the deal is worth approximately $3.14 billion. Continentals CEO Jeff Smisek will take over as CEO for the new airline which will be called United. Current United Airlines CEO Glenn Tilton will take over as acting Chairman over the company until he retires.
"The department says the proposed merger would combine largely complementary networks of the two airlines, resulting in overlap on a limited number of routes." AP
The DOJ or Department of Justice who handles and controls very difficult cases and extremely large and valuable assets such as this one has the job to make sure that no rules or regulations are being broken such as route overlap and a few other issues in order not to decrease competition so much so that the airlines can take advantage of the situation and set extremely high fares to its customers because there is no other alternative. The DOJ has looked over and has agreed to this merger and all of its assets as it determines that there is not much route overlap and that competition will not be decreased too much because of the merger. Once the merger does go through, United will become the biggest airline in the world leap frogging over Delta which merged with Northwest in 2008. The new airline will offer a diverse fleet tied with destinations that either of the carriers did not have before.
Sources are from AP (Associated Press)
No comments:
Post a Comment