Zacks Analyst Blog Highlights: UAL, Continental Airlines, Delta Airlines, AMR and US Airways

For Immediate Release

Chicago, IL – August 31, 2010 – Zacks.com Analyst Blog features: UAL Corp. (UAUA), Continental Airlines (CAL), Delta Airlines (DAL - Analyst Report), AMR Corp. (AMR) and US Airways (LCC - Snapshot Report).

Here are highlights from Monday’s Analyst Blog:

United-Continental Gets U.S. Approval

The pending merger of United Airlines, a wholly owned subsidiary of UAL Corp. (UAUA), and Continental Airlines (CAL) cleared its one of the major deterrents in its transaction, which was announced on May 3.

United Airlines received the antitrust approval by the U.S. Department of Justice to acquire Continental Airlines. This will create the world’s largest airline with enhanced capacity and improved services, overtaking Delta Airlines (DAL - Analyst Report)

The agreement provides Southwest an opportunity to expand its small presence in the New York region and compete against its peer American Airlines, a wholly owned subsidiary of AMR Corp. (AMR) and US Airways (LCC - Snapshot Report). The deal with Southwest resolves the competitive concerns related to the merger and will likely benefit consumers on overlap as well as on many other routes.

The combined company will have minimal domestic and no international route overlaps. In July, the pending merger received approval from European regulators, who stated that the merger will raise competitive concerns in Europe or the trans-Atlantic market.

The merger is expected to cost United Airlines around $3.2 billion, including compensation for each Continental shareholder with 1.05 shares. This exchange will leave United Airlines with a 53% interest in the newly formed company, with the rest to be owned by Continental. The combined company will retain the old name — United Airlines, but will carry Continental’s logo and will be headquartered in Chicago. The transaction is expected to close by October 1 with shareholders approval expected on September 17.

We believe the newly formed company will enjoy a favorable position in an increasingly competitive global and domestic aviation industry and will perform better than any airline standing alone. The combined company will also create a network that can compete for long-haul and high-volume business travels. It is expected to generate annual revenue of $29 billion and save costs in the range of $1 to $1.2 billion by 2013.

We are currently maintaining our Neutral recommendation on United Airlines with Zacks # 2 (Buy) Rank.

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Read the full analyst report on UAUA

Read the full analyst report on CAL

Read the full analyst report on DAL

Read the full analyst report on AMR

Read the full analyst report on LCC