Continental Airlines and United Airlines reportedly agreed to merge in a stock swap deal, valued at more than USD3 billion, to create the world’s largest carrier carrying 21% of all US air passengers (Bloomberg/Houston Business Journal/Denver Business Journal, 02-May-2010). United is expected to swap 1.05 shares for each Continental share. The combined carrier would be based in Chicago with Continental CEO, Jeff Smisek, as CEO and United’s Glenn Tilton as Chairman. The carrier would operate under the United Airlines brand. Most of the merger groundwork was already in place from previous merger discussions in 2008 which Continental walked away from in favour of joining the Star Alliance (Reuters, 15-Apr-2010). United was previously in merger talks with US Airways until 23-Apr-2010.
Continental Airlines and United Airlines merge in USD3bn stock swap deal
You may also be interested in the following articles...
Optimism, uncertainty and cost pressures offer an unpredictable mix for 2017
A sense of optimism prevailed among North American airlines as 2016 draws to a close. It is driven by the beginning of stabilised pricing in the US domestic market and an improved outlook for Western Canada after a marked drop in oil prices triggered a collapse in demand.
Lufthansa and Etihad bedfellows - at last - but unions may make marriage a distant prospect
There can be no understating the symbolic change in mindset of Lufthansa agreeing to partner with Etihad. Lufthansa has spent the better part of a decade rallying against Gulf airlines to the press, lobbying in Europe's power corridors and seeking a range of aeropolitical measures to wind back new competitors. Etihad has been the prime target for its investment and ongoing top-ups in a range of European airlines including Lufthansa's home competitor, the failing airberlin. Despite that, it is not well known that the two have come close to a liaison before, suggesting that each sees an intrinsic logic in a relationship.
The partnership has potential to be more significant than Emirates-Qantas, Qatar-IAG or Etihad-AF-KLM. But for now it is limited in scope and caution should be exercised in extrapolating too far at this stage.
Lufthansa CEO Carsten Spohr is seeking new growth platforms that sidestep the flagship business' uncompromising unions who would seemingly prefer a status quo that exists only in memory. Their support will be necessary if the partnership is to work and grow. Then Lufthansa, which has rallied the Star Alliance and JV partners against Gulf airlines, will need to explain its change of heart. For now Lufthansa will not partner on Etihad's beyond-Abu Dhabi network, a move that would embrace the fundamental business plan of Etihad and peers. That upside remains a matter for speculation.