CLEVELAND, Ohio – Cleveland Hopkins International Airport will remain a hub when Continental Airlines merges with United Airlines, Jeff Smisek, Continental’s chief executive, said in a letter to employees today.
Continental and United this morning made official what had been expected for weeks: that they will combine to create a global network that will serve 370 destinations in 59 countries. The merged carrier will continue to serve all cities where it currently flies. The deal is valued at more than $3 billion.
The future of Continental’s Cleveland operations has been uncertain, because it is the smallest of eight domestic hubs of the combined carrier. Continental also has a Pacific hub in Guam. But the airlines say they will maintain all those hubs and add one more — Tokyo — in their combined network.
Smisek, in an open letter to Continental employees, said the merger will not have an immediate effect on jobs. Federal regulators must review the deal, and even after the merger occurs — which the airlines anticipate late this year — it will still take until the first half of 2012 to operationally merge the carriers.
“As always, however, I want to be upfront with you,” Smisek wrote. “Mergers do result in some job losses, particularly in non-operational positions.”
The airlines said the biggest hub of the merged airline will be in Houston, which is a primary gateway to Latin America. The headquarters of the company will be in Chicago. Some business functions will still be located in Houston, with specifics on that determined before a merger is finalized.
The new carrier will retain the United Airlines name. Its parent company will be United Continental Holdings Inc. It will have $29 billion in annual revenue based on 2009 results. The airlines said combining would save them $1 billion to $1.2 billion a year by 2013, including between $800 million and $900 million in new yearly revenue.