United and Continental put merger to stockholder vote; American Airlines plans new ancillary charge


The majority of North and South American airline stocks declined on Wednesday (18-Aug-2010) following mixed trading in wider markets. The Dow (+0.1%) ended trading relatively flat, gaining in afternoon trading on improved financial results in the retail sector.

The decline in airline stocks was despite a 0.5% decline in oil prices to USD75.42.

United and Continental to put merger agreement to stockholder vote

United Airlines (+0.9%) and Continental Airlines (+0.8%) edged higher after announcing plans to hold a special meeting of stockholders on 17-Sep-2010, to vote for the approval of their merger agreement.

Both carriers urged all stockholders to take part in the vote, as the proposals must be approved for the merger to go ahead.

If the merger is completed, UAL stockholders will not receive any merger consideration and will continue to hold their shares of UAL capital stock, while holders of Continental common stock will receive 1.05 shares of UAL common stock for each share of Continental common stock they hold at the effective time of the merger. Continental stockholders will not receive any fractional shares of UAL common stock in the merger. Instead, UAL will pay cash in lieu of any fractional shares of UAL common stock that a Continental stockholder would otherwise have been entitled to receive.

See related CAPA Profile: Mergers and Consolidation

American Airlines to introduce new ancillary charge

American Airlines (-0.3%) slipped. During trading, the carrier announced plans to introduce Express Seats, enabling passengers to purchase seats in the first few rows of coach class, including bulkhead seats in that cabin. The Express Seats can be purchased via airport self-check-in machines from 24 hours to 50 minutes prior to scheduled flight departure for travel within the US, including Puerto Rico and the US Virgin Islands. Introductory pricing for Express Seats begins at USD19 per flight, with pricing based on distance.

See related CAPA Profile: Ancillary Revenues

Elsewhere, AirTran (+2.1%) and Alaska Air (+1.5%) were the day’s biggest gainers, while Hawaiian Airlines (-3.6%) fell back into negative territory. LAN Airlines (-1.6%) and TAM (-1.1%) were also down after recent rallies, as wider Latin American markets ended trading flat. 

North & South America selected airlines daily share price movements (% change): 18-Aug-2010

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