United Airlines, Continental Airlines Merge: UAL Buys for $3 Billion Plus

Continental CEO Jeffery Smisek United Airlines CEO Glenn Tilton says the deal to create the world’s largest carrier is not designed to raise fares.

Combining United and Continental, according to the airlines, would save them $1 billion to $1.2 billion a year by 2013, including between $800 million and $900 million in new yearly revenue.

United shareholders will hold a majority stake, the airline will be based in United’s hometown of Chicago and it will be called United. However, the tail of aircraft will take on Continental’s logo.

The new parent company will be called United Continental Holdings Inc., and have about $29 billion in annual revenue based on 2009 results and $7.4 billion in unrestricted cash. The airline will be run by current Continental CEO Jeffery Smisek. United CEO Glenn Tilton will be non-executive chairman for up to two years before Jeffery Smisek adds the chairman title.