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Let the Honeymoon Begin: United Seals Deal
United and Continental officially closed on their merger today, and in the process usurped Delta as the world's biggest airline. Consumers won't notice any major changes right away, but here's a rundown of what to expect:
- The United and Continental brands will remain independent for roughly 18 months. What changes as of today is that both brands are operated by a new parent company, United Continental Holdings Inc.
- For the time being, customers will continue making separate reservations for both Continental and United, and frequent flyer programs will remain as they are.
- The airline says a more unified product will arrive in the spring, likely meaning the first pieces of a combined reservations system and/or frequent flyer program. Expect updates like new aircraft livery, check-in desks, airport lounges, and gate areas to slowly take place over the next 18 months.
- The airline probably won't receive a new single operating certificate from the FAA until early 2012.
- The biggest hurdle left is getting the airline's labor issues sorted out. Jeff Smisek, former Continental CEO and new United CEO, sounded an optimistic note in an interview with USA Today: "I've been very clear with all the work groups that we are creating wealth here, and I'm going to share that wealth. We may dicker as to what that share is. But we've always been successful here at Continental in working with our co-workers ... in reaching agreements that are fair to us and them. I see no reason why we can't do that in the context of the merger."
As you can see, there's more to do here than cross the Ts and dot the Is. United has a lot of work to do, particularly on the labor front, and that's an issue that has caused major headaches in past mergers. Labor tensions are still high at US Airways following the chaotic transition during its merger with America West.
Still, it's officially "game on" for United.
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