It appears United Airlines' public flirtation with US Airways might have generated the desired effect, as Continental Airlines has finally agreed to merge with UAL two years after Continental spurned United's last proposal to wed. The $3.2 billion merger would result in the biggest airline in the world and leave the U.S. with three major international carriers: the new United, Delta and American Airlines. Of course, any deal would need the approval of federal antitrust regulators, a process that could take until the fourth quarter. But as business travel turns upward along with signs of an improving U.S. economy, both UAL and Continental appear much more attractive suitors, together amassing more than $7 billion in cash.
The merger of the two companies would create a combined airplane orderbook worth $22 billion and no doubt raise some questions about their status. United recently split a $10 billion order between Boeing and Airbus for twenty-five 787s and 25 A350XWBs, respectively. Continental, meanwhile, operates an all-Boeing fleet and holds an order of its own for eleven 787-8s and fourteen 787-9s.
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