UAL Corporation (United Airlines) and Continental Airlines announced (20-Sep-2010) that following the closing of the merger of a wholly owned subsidiary of UAL with and into Continental, the holding company intends to list its common stock on the New York Stock Exchange (NYSE) and open trading under the ticker symbol UAL subject to approval by the UAL Board of Directors and the NYSE. Upon the closing of the merger, the holding company, UAL Corporation, will be renamed United Continental Holdings Inc. The companies expect to close the merger by 01-Oct-2020 and commence trading of the common stock of United Continental Holdings (UAL) on that day. Until that time, the common stock of UAL Corporation will continue to trade under the ticker symbol UAUA on the NASDAQ exchange and the common stock of Continental will continue to trade under the ticker symbol CAL on the NYSE. The companies have received clearance on the proposed merger from the US Department of Justice and the European Commission, and the stockholders of both companies have approved the transaction. Continental Airlines added that stock options and shares held through the Employee Stock Purchase Plan (ESPP) will be converted into UAL stock options and shares in accordance with the merger agreement. [more - United] [more - Continental SEC Filing]
United to list on NYSE under ticker symbol UAL
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US DOT rejects Qantas-American Airlines joint venture under pressure of unchecked consolidation
After complaints about airlines amassing power through joint ventures to the detriment of consumers, the US DOT appears to be exerting greater and more conservative scrutiny on partnerships. DOT has rejected a proposed JV between American Airlines and Qantas. After DOT declined their request for a much longer response time American and Qantas withdrew their application, submitted in Jun-2015.
At a top level the JV does seem to raise concern: combined, Qantas and American would hold 59% of the US-Australia market. Yet almost all of that – 53% – is from Qantas; American adds only 6ppt.
DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.
Aeromexico and Delta JV: major uncertainty reigns after the DoT hits hard with slot divestitures
A transborder joint venture between SkyTeam partners Aeromexico and Delta is hanging in the balance now that the US DoT has required slot divestitures and other stipulations in order for the airlines to move forward with their proposed business agreement. Not surprisingly, Aeromexico and Delta believe limitations proposed by US regulators would diminish the economic benefits of the joint venture, and are warning they are reconsidering deepening their business ties.
Numerous airlines expressed concerns about Aeromexico and Delta’s concentration of slots at Mexico City Juarez, and the DoT responded by requiring slot divestitures at the airport along with the relinquishment of slots at New York JFK. The airlines have countered that the DoT’s analysis is flawed, and that a smaller number of slot divestitures at Juarez required by Mexico’s government should allay any concerns expressed by competitors. Aeromexico and Delta also argue another stipulation imposed by US regulators – limiting the joint venture to a five-year term – would create too much uncertainty for the viability of the business venture.
Delta’s plans to take its stake in Aeromexico up to 49% was contingent on the JV proposal succeeding. But with the stipulations imposed by DoT in order for the partners to establish their joint venture a dark cloud of uncertainty is hovering over Aeromexico’s future ownership structure.