The bosses of United Airlines and Continental Airlines have sealed an all-share merger deal worth 2.4 billion euros.
If approved by competition regulators, that will create the world’s largest carrier with 22 billion euros in annual revenues.
It was the latest consolidation as airlines try to protect themselves from the factors that are battering the industry.
United and Continental predict up to 900 million euros in annual savings and revenue benefits by 2013.
However, the merger promises little if any reductions in capacity, something which is needed to bolster ticket prices as airlines struggle with overcapacity, competition from low cost carriers and volatile fuel prices.
The shares of both airlines fell.