UAL > Continental

HOUSTON and CHICAGO, July 27 /PRNewswire-FirstCall/ --

United Airlines and Continental Airlines today received unconditional clearance from the European Commission on the airlines' proposed merger.

The Commission noted its investigation found the proposed transaction would not raise any specific concerns in Europe or the trans-Atlantic.


"We are pleased to have received this clearance from the European Union, a significant market for our combined new company, and we continue to work cooperatively with the U.S. Department of Justice toward an expeditious completion of our merger, which will benefit our customers, our people, our shareholders and the communities we serve," said Glenn Tilton, UAL Corporation chairman, president and CEO.


"Approval from the European Commission is another important step toward completing our merger with United," said Jeff Smisek, Continental's chairman, president and CEO.
"The combination of United and Continental brings together the two most complementary networks of any U.S. carriers, with minimal domestic and no international route overlaps. Together we will offer customers unparalleled global access."

The companies announced their plans for an all-stock merger of equals in May and expect the transaction to close in the fourth quarter of 2010.

Now that United and Continental have officially closed their merger, the new management team plans to undertake an analysis of the combined carrier's fleet.

Previously United had indicated it would make a decision by year-end on replacing its aging Airbus narrowbodies. The carrier also operates 96 Boeing 757s according to Flightglobal's ACAS database.

Today during a discussion marking the close of the deal United chief executive Jeff Smisek remarked that the carrier's new management team "just got here", and prior to close did not have access to flight profitability statistics from a stand-alone United.

Declining to specify a timeframe for making a fleet decision Smisek states: "When we're ready to announce it, we'll announce it."

Smisek does conclude that Continental had previously been at a disadvantage in its ability to only operate 50-seat regional jets as dictated by the scope clause in its mainline pilot contract.

Highlighting the competitiveness of the two-class configuration of United's 70-seat regional jets Smisek says premium class on those aircraft is an important benefit for business travellers and "profitability going forward".

Smisek is not addressing a proposal from pilots at Continental and United to end the outsourcing of operating regional jets to the new carrier's regional partners.

But in a joint statement both pilot groups, represented by the Air Line Pilots Association, state: "No issue carries more weight than scope and the cessation of outsourcing. The pilots of Continental and United Airlines believe the time is right to correct the wrongs of the past with solutions that benefit our pilots."

Smisek, meanwhile, has stated a goal to reach joint collective bargaining agreements with all the combined work groups by the time Continental and United receive a single operating certificate from the FAA, which he estimates should take roughly a year.

Continental and United will continue to operate separately while the 12-18 month integration process continues. The new holding company for both airlines, United Continental Holdings, began trading on the New York Stock Exchange today under the UAL symbol.