Loading
16-Jun-2010 11:06 AM

Continental expecting USD1.0bn-1.2bn in synergies from United merger

Continental Airlines expects (15-Jun-2010) USD1.0-1.2 billion p/a in synergies from its proposed merger with United Airlines, including revenue synergies of USD0.8-0.9 billion and net cost synergies of USD0.2-0.3 billion. 75% of synergies are expected to be achieved in the second year, with full run-rate expected to be achieved in year three. The carrier also expects the combined network will add more than 2 million passengers p/a. The carriers plan to respond to a request for more information from the Department of Justice in early Jul-2010 (Dow Jones, 15-Jun-2010). CEO, Jeff Smisek, reiterated that he sees no competition issues with the merger, while United CFO, Kathryn Mikells, stated the absence of joint labour contracts would not be a barrier to a successful merger. The carriers’ pilots are expected to have a contract by year-end (The Houston Chronicle, 15-Jun-2010). [more]

Mr Smisek, meanwhile, stated that a recovery is demand “is on” and the carrier is benefiting from an increase in corporate traffic and a higher average fare per mile. CFO, Zane Rowe, stated mainline capacity is expected to increase 0.5-1.5% this year, while capacity on regional partners will be flat (Associated Press, 15-Jun-2010).

Want More News Like This?

CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More