UAL, Con­ti­nen­tal await hold­ers’ votes

The Pak Banker - - Company+Boss News -

NEW YORK: UAL Corp.'s United Air­lines and Con­ti­nen­tal Air­lines Inc. await share­holder ap­proval next month for their $3 bil­lion all­stock merger cre­at­ing the world's largest car­rier, af­ter the U.S. govern­ment cleared the deal.

To win Jus­tice Depart­ment back­ing, the com­pa­nies agreed to give up rights for 18 daily round-trip flights at Ne­wark air­port in New Jersey to South­west Air­lines Co., and the agency said yes­ter­day it had closed its an­titrust re­view.

"Air­lines are now us­ing these slot-swap deals as trade bait," said Bob Mann, a for­mer Amer­i­can Air­lines ex­ec­u­tive who runs con­sul­tant R.W. Mann & Co. in Port Washington, New York. "It's the new grease for reg­u­la­tory ap­proval. Slots are one area where reg­u­la­tors like to see some give-ups."

The Jus­tice Depart­ment's ac­tion moved UAL and Con­ti­nen­tal to­ward their goal of clos­ing their merger by Oct. 1. Ne­wark Lib­erty In­ter­na­tional Air­port will be a new des­ti­na­tion for South­west, the largest dis­count air­line. Con­ti­nen­tal op­er­ates a hub at Ne­wark for do­mes­tic and in­ter­na­tional flights.

"The trans­fer of slots and other as­sets at Ne­wark to South­west, a low-cost car­rier that cur­rently has only limited ser­vice in the New York metropoli­tan area, and no Ne­wark ser­vice, re­solves the depart­ment's prin­ci­pal com­pe­ti­tion con­cerns," t he Jus­tice Depart­ment said in a state­ment.

UAL and Hous­ton-based Con­ti­nen­tal an­nounced plans May 3 to merge in a stock swap val­ued yes­ter­day at $3 bil­lion, based on data com­piled by Bloomberg. Each Con­ti­nen­tal share will be ex­changed for 1.05 shares of Chicago-based UAL. The Euro­pean Union ap­proved the merger on July 27. -Bloomberg

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.