United, Continental Airline Merger could Possibly be Full

And – and creating the world’s largest airline out of this, what are the implications, then, total for the industry? And prices should not go up overall typically within the United States or overseas. Prices are going to go up somewhere. There are merely too many airlines here competing for too little piece of the pie – items of the pie, as evidenced by the actual fact they have been losing cash for so many years. However, certainly, in places the place these two might need been the only two competing, they – they – they may go up, except – you already know, thankfully, we now have – now we have these – these – these fairly successful and profitable, in some instances, like Southwest, lower-value airlines, who look for unusually high fares between city pairs due to the lack of competition, and go in. You realize, frequent flyer members in a single airline can use their miles on the other. The merged airline will fly below the name United, but will use Continental’s brand and be run by Continental’s CEO, Jeffery Smisek. United’s CEO, Glenn Tilton, stated the new airline will be stronger than either of the prevailing carriers.

I think, at the top of the day, you are going to have three, perhaps 4, but I think three major airlines in the United States, after which three or four so-value low-price – so-called low-value carriers. And if they will keep away from duplicating employees, routes, if they’ll synch their flights better, so that extra folks discover them a handy airline to fly, if they could solely have one advertising funds, one advertising and marketing funds, one frequent flyer program, they will – they’ll understand savings. After weeks of negotiation, United Airlines introduced it would purchase Continental in a deal totaling more than $3 billion. There will be extra seamless service. He will serve as non-executive chairman. I will function CEO. United will contribute six directors to the combined board. And Glenn and i will probably be on the board. There shall be some hiccups at first. So, there – there can be a few hiccups. Nevertheless, actually, will there might be some frontline layoffs as nicely. So, passengers who’ve already flown these airlines will not discover an unlimited distinction, if these two airlines can accomplish this merger, this coming-together, maybe as well as Delta and Northwest did in the last two years. Well, whenever you might have fewer airlines, you could have less competitors.

Nicely, they’re – they serve additionally 59 countries. Well, it is not going to be a huge upheaval, as a result of both airlines have been members of the identical alliance, the OnePass alliance – excuse me – Star Alliance. I – I think many of the layoffs will come from mid-administration and administration, where you have got folks doing the identical job at each airlines. It is going to be primarily based in Chicago, United’s hometown, and may have a commanding place in different main U.S. The new United Airlines will surpass Delta Air Lines in size, making it the world’s largest service flying to 370 destinations. Now: an airline mega-merger, and what it means for travelers and the enterprise of flying. Because the airlines did not compete on the identical routes, generally speaking, cities usually are not going to lose an airline. Notice: Transcripts are machine and human generated and lightly edited for accuracy. Obviously, there should not going to be as many roles within the mixed airline as there are in the two standing alone now. Rudy Maxa, why does this merger make sense for these two airlines?

Collectively, the 2 airlines misplaced almost a billion dollars last 12 months. By consolidating, they are saying they may save $1 billion to $2 billion a yr by 2013. And that would imply layoffs. We heard Kwame additionally say there may very well be layoffs. We heard Kwame in that report say 370 destinations. NewsHour correspondent Kwame Holman begins with some background. But, if it can be completed over time as Delta and Northwest did it, as smoothly, there shouldn’t be huge disruptions. And I am imagined to be a guy who travels on a regular basis and knows about these items. There will be people who go in the large airports like LAX or JFK to the flawed terminal for a while. But I do not think it will be large, because they’re not really slicing that many flights. So, Continental will contribute six administrators to the mixed board. So, it’s going to profit that new airline, still to be known as United, in fact. So, there is a little bit of a correcting mechanism within the model right now.