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  4.  » Continental-United Airlines Merger Impacts New Jersey

Continental-United Airlines Merger Impacts New Jersey

On Behalf of | May 3, 2010 | Mergers And Acquisitions |

This past weekend marks a change for one of New Jersey’s biggest employers, Continental Airlines. On May 2, Continental and United airlines agreed to a $3 billion merger. The new company will go by the name of United and be based in Chicago, a change that threatens the jobs of the current 14,000 Continental employees in New Jersey.

This business transaction does more than change life for New Jersey’s Continental employees, but it also changes the bargain-finding game so many travelers play when planning a trip. The Continental-United merger ends Delta airline’s reign as the largest airline and, while doing so, limits even further the fee competition in the airline market.

As with any product, the less competition there is out there, the more a company can charge for their services. Experts, therefore, advise consumers to expect an increase and less overall variability in the price of airline tickets.

On a more positive note, the merger between the two airlines does bring New Jersey’s Newark Liberty International Airport even more international flights, including flights from the Asian market that United now boasts as their strength.

If the idea of a merger between United and Continental airlines sounds familiar or like old news, that is because they played with the idea of merging about 2 years ago. At that time, Continental ultimately decided they wanted to run independently. It took the current economy’s negative effect on business (along with rumored discussions between US Airways and United) for Continental to hop on board with this merger.

Critics of the Continental-United merger point to the recent Delta-Northwest merger as an example of how this sort of business transaction worsens an airline’s quality of customer service. While the company might save money and make more profit, these deals make a company too large and therefore less able to identify and accommodate customers’ needs and wants.


United, Continental to announce $3B merger deal creating world’s biggest airline