United Continental Holdings, Inc. (Chicago), formerly UAL Corporation, announced today (October 1) that a wholly owned subsidiary has merged with Continental Airlines, Inc., and that Continental Airlines and United Air Lines, Inc. are now wholly owned subsidiaries of United Continental Holdings, Inc., creating a world-class global airline. Today, the common stock of United Continental Holdings, Inc. begins trading on the New York Stock Exchange under the symbol UAL.
United Continental Holdings, Inc. also announced the members of its board of directors, effective Oct. 1, 2010. The 16-member board includes six independent directors from each of United and Continental, Glenn Tilton, who will serve as non-executive chairman of the board, and Jeff Smisek, who will serve as president and chief executive officer. The independent directors are Kirbyjon H. Caldwell, Carolyn Corvi, W. James Farrell, Jane C. Garvey, Walter Isaacson, Henry L. Meyer III, Oscar Munoz, James J. O’Connor, Laurence E. Simmons, David J. Vitale, John H. Walker and Charles A. Yamarone. Additionally, the board has two union directors: Stephen R. Canale and Captain Wendy J. Morse.
With approximately $9 billion in unrestricted cash at closing, United expects the merger will deliver $1.0 billion to $1.2 billion in net annual synergies by 2013, including between $800 million and $900 million of incremental annual revenue, from expanded customer options resulting from the greater scope and scale of the network, fleet optimization and expanded service enabled by the broader network of the combined carrier. On a pro-forma basis, the combined company would have annual revenues of $31.4 billion, based on results for the 12 months ending June 30, 2010.
Continental and United, operating under United Continental Holdings, Inc., will immediately begin the work to fully integrate the two companies. In the near term, customers can expect to interact with each carrier as they always have. Customers flying on Continental will continue to check in at continental.com, or at Continental kiosks and ticket counters, and to be assisted by Continental employees, and customers flying on United will continue to check in at united.com or at United kiosks or ticket counters, and to be assisted by United employees. Customers will continue to earn and redeem frequent-flier miles through the respective loyalty programs of Continental and United until those programs are combined. The company expects that travelers will begin to see a more unified product in the spring of 2011, as the carriers integrate key customer service and marketing activities to deliver a more seamless product.
The new company’s corporate and operational headquarters will be in Chicago, with a significant presence in Houston, the company’s largest hub. As a result of the merger, Continental shareholders will receive 1.05 shares of United Continental Holdings, Inc. common stock for each share of Continental common stock previously held. UAL Corporation shareholders will now own approximately 55% of the equity of the holding company and former Continental shareholders will now own approximately 45%, including in-the-money convertible securities on an as-converted basis.
On its last day (September 30), Continental reached a tentative agreement with its Flight Attendants. The company announced yesterday it has reached a tentative agreement on a new labor contract with the International Association of Machinists and Aerospace Workers (IAM) representing Continental flight attendants. The IAM is expected to hold a ratification vote in the coming weeks.
The agreement covers approximately 9,300 Continental flight attendants located throughout the United States.
Continental Airlines (Houston) will operate for the last time on September 30 with the last flights of the day. Officially on October 1, 2010 Continental and United Airlines (Chicago) will be merged as “equals” although the United name will survive. Oddly CO’s 1991 livery will live on as the merged airline’s color scheme.
Boeing 737-924 ER N53442 (msn 33536) is the first CO airplane to receive UA titles. Aircraft 285 and 124 should follow.
The first new UA revenue flight is expected to depart Houston (Bush Intercontinental) on Friday morning. More information to follow.
We will be honoring the history of CO over the next few days with additional historical photos.
Copyright Photo: Bruce Drum. Honoring the past, Boeing 737-924 ER N75436 (msn 33531) departing Fort Lauderdale/Hollywood was painted in the 1947 “Blue Skyway” livery (initially this livery was introduced on metal fuselages).
Continental Airlines on Flickr Slide Show:
Continental Airlines on AG Slide Show (press >):
Continental Airlines-United Air Lines Douglas DC-6B N90961 (msn 44689) (CO-UA Interchange dual titles) DEN (Ted J. Gibson-Bruce Drum Collection) (Continental and United announce a merger of equals), originally uploaded by Airliners Gallery.
Continental Airlines (Houston) and United Airlines (Chicago) today (May 3) as expected, announced a definitive merger agreement, creating the world’s largest airline (larger than Delta) with service to 370 destinations around the world. The all-stock merger of equals brings together two of the world’s largest airlines.
Glenn Tilton, chairman, president and chief executive officer of UAL Corp., will serve as non-executive chairman of the combined company’s Board of Directors through December 31, 2012 or the second anniversary of closing, whichever is later. Jeff Smisek, Continental’s chairman, president and chief executive officer, will be chief executive officer and a member of the Board of Directors. He will also become executive chairman of the Board upon Tilton’s ceasing to be non-executive chairman. Translation: Smisek (CO) is running the show.
The holding company for the new entity will be named United Continental Holdings, Inc. and the name of the airline will be United Airlines. The marketing brand will be a combination of the brands of both companies. Aircraft will have the Continental livery, logo and colors with the United name, and the announcement campaign slogan will be “Let’s Fly Together.” This means the UA brand will be retired, but the name will survive. This also means the CO brand will survived, but the name will be retired (an unique combination). The new company’s corporate and operational headquarters will be in Chicago and it will maintain a significant presence in Houston, which will be the combined company’s largest hub. Additionally, the CEO will maintain offices in both Chicago and Houston.
On a pro forma basis, the combined company would have annual revenues of approximately $29 billion based on 2009 financial results, and an unrestricted cash balance of approximately $7.4 billion as of the end of first quarter 2010, including United’s recently closed financing transaction.
In the merger, Continental shareholders will receive 1.05 shares of United common stock for each Continental common share they own. United shareholders would own approximately 55% of the equity of the combined company and Continental shareholders would own approximately 45%, including in-the-money convertible securities on an as-converted basis.
The merger is expected to deliver $1.0 billion to $1.2 billion in net annual synergies by 2013, including between $800 million and $900 million of incremental annual revenues, in large part from expanded customer options resulting from the greater scope and scale of the network, and additional international service enabled by the broader network of the combined carrier. Expected synergies are in addition to the significant benefits derived from the companies’ existing alliance and expected from their future joint venture relationships. The combined company is also expected to realize between $200 million and $300 million of net cost synergies on a run-rate basis by 2013. One-time costs related to the transaction are expected to total approximately $1.2 billion spread over a three-year period.
The combined airline will have the most modern, fuel-efficient fleet (adjusted for cabin mix) and the best new aircraft order book among major U.S. network carriers. It will have the financial strength to enhance customers’ travel experience by enabling it to invest in globally competitive products, upgrade technology, refurbish and replace older aircraft, and implement the best-in-class practices of both airlines.
The merger will create the industry’s leading frequent flyer program, offering vast opportunities for customers to earn and redeem miles, including on Star Alliance partners.
United and Continental are members of Star Alliance, the world’s largest airline network. Star Alliance customers will continue to benefit from service to over 1,000 destinations, more connecting opportunities, additional scheduling flexibility and access to leading reciprocal frequent flyer and airport lounge benefits with Star Alliance’s 24 other member airlines around the world.
The merger, which has been approved unanimously by the Boards of Directors of both companies, is conditioned on approval by the shareholders of both companies, receipt of regulatory clearance, and customary closing conditions. The companies expect to complete the transaction in the fourth quarter of 2010. During the period between signing and closing of the merger, the CEOs of both companies will lead a transition team, which will develop a specific integration plan.
A slide presentation and the live audio webcast will be available and archived on a new dedicated merger website at http://www.unitedcontinentalmerger.com.
Copyright Photo: Ted J. Gibson/Bruce Drum Collection. This is not the first time CO and UA have come together and flown together. In the past the two companies operated an interchange route. CO’s Douglas DC-6B N90961 (msn 44689) poses for the camera at DEN (where ironically both companies once had competing hubs) with dual titles. Please click on the photo for additional details.
Continental Airlines (Houston) and United Airlines (UAL Corporation) (Chicago) are expected to announce that they are merging to form the world’s largest airline on Monday, the Wall Street Journal reported on Thursday, citing unnamed sources via this report in Reuters.
Continental’s board is expected to meet today and Sunday, and United’s board would also meet today, the newspaper said on its website.
United declined to comment and Continental did not immediately respond to a request for comment.
Meanwhile, a source close to the situation told Reuters that concern over the share-price ratio to be used in a potential stock swap was “no longer an issue” and added that an announcement of the deal would likely be made early next week.
If announced and approved, the Continental Airlines brand would be retired. The new merged airline would be known as United Airlines.
What will American Airlines now do? US Airways are you now talking to AA?
Read the full report:
Copyright Photo: Antony J. Best. The Continental “golden globe” color scheme, introduced in 1991, has always been one of the more popular airline brands. Continental has also been rated high by passengers compared to most U.S. airlines. However its days may be numbered. Boeing 757-224 N17122 (msn 27564) gracefully takes to the skies at Gatwick Airport near London. Both companies operate the Boeing 757.