Unions & Shareholders likely to Rock United Continental Merger Plans
United Airlines and Continental Airlines announced a merger of their operations on Monday.
However, if industry experts are to be believed then the execution of the merger might not be so easy with the unions and shareholders likely to play spoilsport.
Some of the shareholders have already filed a lawsuit to stop the deal from being done as they are of the opinion that the deal of $ 3 billion was on the lower side. The closure of the deal will also require approval from the regulator.
The challenge for the Continental Airlines CEO is two different levels of corporate culture, labor agreements, and service standards. As per the merger agreement, the aircrafts will have a Continental logo but the United brand will also co exist.
Post merger will see the emergence of a new company by the name of United Continental Holdings while the merger will be the end result of the two companies agreeing on meeting certain agreements like labour issues etc. Another point of concern is that given Continental’s existing base in Newyark Liberty International Airport, which is likely to be forcibly reduced.
A few years ago, the company’s shareholders were upset when they paid bonuses to its senior management. The merger is in the news for the wrong reasons. Likewise there is growing jitteryness amongst shareholders is the fact that with the merger the services are likely to improve. “I remember the rise of Continental out of People Express,” said Close,. “Continental has been a very strong local presence in New Jersey. United is Chicago; Continental is New Jersey.”
