The US Justice Department (DOJ) has given the go ahead to the merger between United Airlines and Continental Airlines. The DOJ completed the overall review of the merger and addressed all antitrust concerns. This all-stock merger is worth around US$ 3 billion and spells as the creation of the biggest airline in the world. There are projections that by 2013, annual synergies would generate $1 billion to $1.2 billion. It includes $200 to $300 million from net annual cost synergies.
The merger would be in place once a vote is carried out by the shareholders. The expected date of this vote is 17th September, 2010. Once the vote is over, the US Transportation Department would have to approve it. The entire process is expected to be over by 1st October, 2010.
Everyone associated with Continental and United stands to get rich rewards from this merger. Passengers will get access to the number one frequent flyer programme of the industry. There would be an increased number of destinations and partners to enable passengers in earning and redeeming more and more miles. Not only will the features of the existing Mileage Plus and OnePass loyalty programmes of United and Continental be part of the new programme, but certain other attractive additions would be made as well.
Similarly employees and shareholders will also get many benefits. After all, the merger is going to result in the creation of a gigantic entity. Presently, Continental serves some 170 points globally and handles more than 2,700 departures. The company has about 40,000 employees. Similarly United, the founder of the Star Alliance, has a staff of nearly 46,000 and daily operates approximately 3,400 flights to more than 230 destinations. It is quite evident that the aviation industry is set to see a path breaking moment.
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