28 Aug 2010

Airline merger approved

1:02 pm on 28 August 2010

A merger between United Airlines and Continental Airlines has been approved by the US Justice Department.

The two companies have agreed to give up some slots at Newark airport hub to low-fare carrier Southwest Airlines.

The BBC reports the move paves the way for the deal, which will create the world's biggest carrier, to go ahead.

The combined group will use the current Continental colours with the United Airlines name.

When the merger proposal was announced in May, the companies said they expected the deal, worth $US3.2 billion, to deliver savings of more than $US1 billion per year.

Together United and Continental currently fly to 370 destinations worldwide, flying 144 million passengers a year.

Shareholders will vote on the merger next month.