Friday, October 1, 2010

United marks merger with a new benefit

United and Continental closed their merger today.  Effective immediately, the shares of both companies have been consolidated (CAL 1.05:1 with UAUA) and are trading as United-Continental Holdings (NYSE:UAL). 

 The return of the UAL symbol, which was lost during United's most recent bankruptcy, is a sign that Continental's strength is both a hand up and way forward for United, whose employees have long wanted to do a better job than their lackluster, clueless management team would tolerate.  (Most of those folks, like the UAUA symbol, are now out the window.)

Most of the two former partners' operations will remain separate for some time.  Consolidating airlines is, after all, a huge undertaking.  But for members of the United and Continental airport lounges, there's one benefit that takes effect right away and will matter to both groups:

Effective immediately, the United Red Carpet Club offers a selection of complimentary alcoholic beverages.

Other benefits, including integrated elite upgrades and access to one another's premium economy seats (i.e. Economy Plus on United), will come later in October.  The switch to complimentary alcoholic beverages in the Red Carpet Club, though, is a "tone-setter" for the whole merger.  Presidents Club members had long enjoyed free drinks, which United's club charged for bar service.  Post-merger, things might have gone either way.  But "the new United," under the leadership of former Continental CEO Jeff Smisek, has chosen the right path, putting the customer first the way that Continental has done for years.

These days, mergers mean cuts.  Wall Street expect them, and employees and customer alike fear them.  The days of building a company so that it was generate consistently strong profits from satisfied customers are over.  It's all about driving up share prices and selling off the assets for a high return before throwing the workforce out on the street -- what did those folks do, anyway?  They sure weren't important executives! -- and finding a new target for the same treatment.

But it doesn't have to be that way, and while we'll have to wait and see what the months ahead hold for the world's new largest airline, today's close of the much-awaited Continental-United merger to create "the new United" is off to a good start.

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