Houston-based Continental Airlines announced today that its stockholders approved a merger with United Airlines by a 98 percent vote.
The combined companies, which will adopt United’s name, is forecast to become the world’s largest airline, earning $30 billion in annual revenue, carrying 144 million passengers a year to 59 countries. The new United will be larger than the newly merged combination of Delta Air Lines and Northwest.
“We are grateful for our stockholders’ strong vote of confidence in this merger,” said Jeff Smisek, Continental’s chairman, president and chief executive officer. “In approving the transaction, our stockholders recognized the value of bringing together Continental and United to create a platform for increased profitability and sustainable long-term value.”
In an agreement between the two airlines, the combined operation will be based in Chicago and retain the United name, but will adopt Continental Airlines’ logo of a gold globe on a blue background.
Despite losing the Continental headquarters, the new company will have a significant presence in Houston, According to Continental, Bush Intercontinental Airport will remain a hub, and it will be the largest of the new airline’s 10 hubs.
After the merger, the combined carrier is expected to maintain significant operations in Houston and remain one of the largest private employers in the area. Continental currently employs 14,000 people in Houston and 40,000 globally.
United and Continental will continue to operate as two separate airlines for at least a year, until the Federal Aviation Administration issues a single operating certificate. Once the merger closes, the two airlines will begin to integrate operations.
On Aug. 27, the United States Justice Department approved the Continental-United merger, giving the two companies a green light for merger plans. The Sept. 17 shareholder vote was the final major step before the legal close of the merger, which is currently expected to happen by Oct. 1, 2010.
Congressman Ted Poe asked the airline CEOs to explain what advantage their merger would have over their current inclusion in the Star Alliance, a network of 27 airlines. United CEO Glenn Tilton said that revenue from the alliance isn’t enough to restore United to profitability.