A source with knowledge of the situation tells The Associated Press that directors at both Continental and United Airlines have voted to combine their carriers into what would be the world’s largest airline.
The companies plan to announce a deal as early as tomorrow, people familiar with the situation have said.
United, the third-largest U.S. airline, and No. 4 Continental began talks last month on a combination, reviving negotiations that Houston-based Continental abandoned in April 2008. The terms call for an all-stock transaction, according to people familiar with the matter.
Jean Medina, a spokeswoman for Chicago-based UAL, didn’t immediately return messages seeking a comment. Macky Osario, a Continental spokeswoman, declined to confirm a meeting of the airline’s directors or comment on the UAL board’s decision.
Based on closing prices on April 30, UAL had the third- largest market value among U.S. carriers at $3.63 billion, followed by Continental at $3.12 billion. UAL rose 13 cents to $21.60 on that day on the Nasdaq Stock Market, while Continental slid 35 cents to $22.35 in New York Stock Exchange composite trading.
UAL’s 67 percent gain this year led the 12 carriers in the Bloomberg U.S. Airlines Index. Continental’s 25 percent advance was the third-most, after a 46 percent increase for US Airways Group Inc., which broke off merger talks with United in April.
United and Continental had almost $29 billion in combined revenue last year. Their main jet fleets total 700 aircraft, and they now employ more than 88,000 workers.
Together, they would leapfrog Delta Air Lines Inc. as the world’s biggest carrier by passenger traffic.
