UNITED AIRLINES & CONTINENTAL DEAL WOULD CREATE WORLD'S BIGGEST AIRLINE - A $3.2 billion merger between United Airlines and Continental to create the world's biggest airline was announced yesterday. Both airlines are in the red and the move is being described as a merger of equals but the new entity will retain the name United Airlines. The two companies employ a total of 86,000 workers, some of whom are expected to be made redundant if shareholders and regulators give the deal the go-ahead.
Justin Urquhart Stewart, of Seven Investment Management in London, says the deal is equivalent to two drunks propping each other up. He says that more such announcements are expected in an industry that is consolidating.
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MORNING BRIEFS - Aer Lingus has said that while the business remains challenging, it should have a better three months between now and the end of June then it did last year because of higher average fares. On the volcano, the airlines says the final cost of the disruption - initially estimated at €20m - will depend on the level of customer claims. On future bookings, it talks about limited visibility over the booking profile for the second half of 2010 and questions whether volcanic eruptions will have a longer term impact on passenger travel plans.
** National Irish Bank, owned by Denmark's Danske Bank, said its operating profit for the first three months of the year are down 38% to €13m as income fell 19% to 42m due to lower demand and lower deposit margins. It said it was setting aside €146m for loan impairment charges, a €52m reduction on last year. The bank said its total loan book is 5% lower than last year at €10.2 billion. In December the bank said it was closing 25 of its 58 branches with the loss of 150 jobs.
*** On the currency market, the euro is worth $1.3181 US cents and 86.53 pence sterling.
