Scattered Clouds 39° Good Afternoon
Scattered Clouds 39° Good Afternoon

Continental, United announce merger

MINNEAPOLIS - Directors at Continental and United airlines have approved a deal that would combine them into the world's largest airline, a source with knowledge of the situation said Sunday.

The stock-swap deal values Continental at about $3.2 billion.

Combining Continental and United would leave the United States with three big international airlines -- the new United, Delta and American.

Yesterday's board actions were described by a person with knowledge of the votes, who declined to be identified because the companies plan an announcement today.

The combined airline will be called United, based in United's hometown of Chicago, and run by Continental chief executive Jeffery Smisek. United chief executive Glenn Tilton will be chairman.

United, a unit of UAL Corp., is the nation's third-largest carrier by traffic. Continental Airlines Inc., in Houston, is the country's fourth biggest.

Any deal would need the approval of antitrust regulators. The Justice Department approved Delta Air Lines Inc.'s purchase of Northwest in 2008, which turned Delta into the world's biggest carrier.

Another key issue in putting the two airlines together will be integrating the pilot workforce.

A union hotline message to United pilots Sunday said the "union remains engaged in this issue, and if a merger is announced by United and Continental," union officials "are fully prepared to protect and defend the interests of all United pilots."

More news

Sorry to interrupt...

Your first 5 are free

Access to Newsday is free for Optimum customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.