Two of the strongest American airlines have merged to become part of the United Continental Holdings Inc. Company in a bid to merge their strength in a very spirited market.The great writer Orwell wrote about three large companies tending to remain in one given field as two never have the true power to squash a third one and have the tendency to struggle against each other. The 1984 phenomenon is surely being tested in the American airline industry where United and Continental have joined forces to compete against Delta Airlines.
The board of directors of United Continental Holdings Inc. consists of directors from both companies and the tendency is currently to consider that two heads are better than one. After the turmoil the airline industry as a whole has been through in modern times, this appears a brave move from both sides.
Delta’s brief spell on top shot in the American airline league has come to an end as the combined forces of the merging companies have an predictable number of departures at 5.800, whereas Delta is somewhat lagging behind with 5.715. The effect of the combination of both companies is estimated to bring an extra $1.2 billion in revenue per annum. The $3.2 billion merger should start to pay for itself in a very short time indeed.
It has also been stated that both of the merging parties expect that passengers will get used to the new company name very fast. Once this has been accomplished, United Continental Holdings Inc. has the possibility to become the world’s leading airline with Delta representing very little threat.
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