United and Continental officially merge with shareholder approval

by Ella FAIRCHILD on September 20, 2010

The merger between United Airlines and Continental Airlines, which began two years ago, has been finalised forming the world’s largest carrier.

The newly formed airline, which will be called United Airlines, received overwhelming approval from shareholders from both carriers in a vote held on Friday. Continental’s current chief executive Jeff Smisek will be taking over at the company’s helm with United’s boss remaining on as a board member.

In the face of the ongoing recession, airlines around the globe have struggled to stay afloat. With United forced to apply for bankruptcy protection, Continental to the opportunity to broach a potential merger with the fellow carrier last May.

The move came just two years after Continental had made a similar proposal, which never got off the ground. The merger plan has already been cleared by the US and European Commission under antitrust laws.

Mr Smisek said that the approved transaction means that stockholders recognise the opportunity to bring together both companies in a way that will mutually benefit both carriers. He added that the new company is a platform that will promote sustainable and profitable operations.

Carriers across the world have struggled in the face of terrorism, skyrocketing fuel prices and waning travel from economic woes. Mergers have become commonplace as the airlines try to weather the downturn in the economy.

Even British Airways, after suffering staggering losses this year from ongoing industrial action and the volcanic ash plum, has been reported to be in talks with Spain’s Iberia and American Airlines.

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