JSM Financial: UAL Corp. to buy Continental Airlines and create the globe’s largest airline.

May 3, 2010 - PRLog -- In what JSM Financial sources report will be an all stock deal, United Airlines’ parent company, UAL Corp. is to buy Continental Airlines Inc., creating the world’s largest air carrier, and potentially pruning excess capacity in the airline industry.

The long expected deal, coming after three weeks of intense negotiations has driven shares of most airlines higher, but some analysts are warning that the capacity cuts may well be fairly minimal.

"It's helpful," JSM Financial believes one analyst recently said of the deal. "But it's not going to be the one thing that makes the industry fundamentally sustainable."

The airline industry took severe punishment as a result of low-cost competition, volatile fuel prices and overcapacity since 2008 as well as dealing with its share of financial strain from the global financial crisis.

A recent analysis by JP Morgan predicted that the united firm will be able to cut off 8% of their capacity and save 5% on their expenses.

"By combining operations, it will benefit the airlines where it will solidify their ability to price," JSM Financial believes an independent airline consultant recently said. "But it also will benefit the whole system in that we'll have larger airlines to better serve their customers."


After getting the necessary regulatory approval the new airline will be known as United Airlines and will be based in Chicago. The combined firm will have more than $29 billion in annual revenue, employ around 90,000 people, and fly to 370 destinations.

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