Acquisitions

Two biggest American airline companies United and Continental Airlines reported they were merging as a part of the strategy to become the world's largest carrier. Officials announced the step was agreed by boards of both companies. This step is currently waiting to be approved by companies' shareholders, however, it is expected to be passed before final quarter 2010. The new company will hold the name United and keep its headquarters in Chicago. United acquires approximately 55 percent, while Continental gets 45 percent. New United will cover 7 percent of world flights. By having this, it will move U.S. Rival Delta airlines to the second position. Delta is currently having ! its 6 percent on worldwide share. At home it will cover more than one fifth of the air market. That means to transport more than 144 million passengers per year, connect about 370 destinations in 59 countries all over the world. Except of traditional lines to Europe and Asia, United wants to enhance connections with Latin America, Africa and Middle East.As for financial projections, new giant is expected to have annual revenues of approximately 29 billions and cash balance of approximately 7.4 billion before the end of 2010. The leadership will be divided between Glenn Tilton, president and chief executive officier of United Airlines who will take the place of non-executive chairman, while Continental's CEO Jeff Smisek will serve as chief executive officier. This step is seen as anticrisis solution. Aviation industry was hit not only by crisis, but also with closing European “sky” last month. Airlines had to cancelled more than 75,000 flights for almost a week d! ue eruption activity of Iceland's volcano. But two more weeks ! have pas sed and the volcano is again closing the sky over Iceland, Northern Ireland and Scotland.

related story (sgx17162): http://www.france24.com/en/20100503-continental-united-merge...

by Milota Sidorova for Cantell TV (http://cantell.tv)

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