United Airlines and Continental Airlines announced they were combining operations in a $3 billion merger that would form the world’s largest airline, but officials in two cities expressed concerns over the impact on local economies.
The combined company will have 10 U.S. hubs, although not all are expected to survive the merger. Much of the speculation centers on Continental’s Cleveland hub, which has been downsized in recent years and is mostly served by regional jets operated by ExpressJet.
Ohio lawmakers pledged to examine whether the merger creates antitrust issues. Cleveland.com reported that Mayor Frank Jackson has retained a law firm with expertise in airline mergers.
Rep. Sheila Jackson Lee (D-Texas), who represents Continental’s headquarters city of Houston, expressed disappointment that the new airline would be based in Chicago. She said she intends “to scrutinize this merger to assess whether it complies with federal antitrust laws.”
The carriers said in a press release they expected to complete the transaction in the fourth quarter of 2010. Continental CEO Jeff Smisek will be named CEO of the new carrier, which will operate under the United name. Its aircraft will bear Continental’s globe logo on the tail. The new campaign tagline will be “Let's Fly Together.”
