United in $3 billion stock deal for Continental

A Continental Airlines plane passes an Untied Airlines plane parked at a gate at George Bush Intercontinental Airport Sunday, May 2, 2010, in Houston. Directors at Continental and United airlines have approved a deal that would combine them into the world's largest airline, a source with knowledge of the situation said on Sunday, May 2, 2010. (AP Photo/David J. Phillip)

May 3, 2010 7:40:27 PM PDT
Monday's $3 billion merger of Continental and United airlines will create the nation's largest carrier, but it opens a period of uncertainty for the two airlines' employees, including the more than 9,000 based in the Bay Area.

The merger comes at a time when three of United's unions, the pilots, the flight attendants and the mechanics, are negotiating new contracts. At the same time, passengers and travel agents are wondering if higher air fares will result.

"I think it's going to make the fares go higher and I'm concerned about the competition being less or more because of the merger," Continental passenger Gordon Clunn said.

"If they get bigger and they can reduce their costs, perhaps they'll lower their price; I think that Southwest is competition for them and so they may be able to reduce their fares," traveler Crystal Walk said.

United is San Mateo County's largest employer. About 2,800 people work at the sprawling maintenance base just to the north of the passenger terminals and runways at SFO. About ,2400 flight attendants are also based at SFO.

At one time, the maintenance base employed more than 12,000 people, but over the years that number has diminished after a newer maintenance base opened in Indianapolis. Union officials tell ABC7 News that they have been told United wants to contract out additional jobs, either domestically or overseas. It is not known if that implies a total shutdown or another workforce reduction.

A high-ranking union official does not see an immediate impact because of the nature of the two carriers using a combination of engines made by different manufacturers. Continental and United both operate fleet maintenance facilities, but the mechanics may not be trained to work on the other carrier's engines.

Flight attendants completing a Boston to San Francisco flight declined to go on camera but indicated that it is too early to know how the merger might affect their duties and working conditions. The local president of the Association of Flight Attendants did not return our call.

Travel agent Dan Hanes at Morrison Travel in downtown San Mateo said that he expects fares will rise in the future as a result of one less competitor in the marketplace. However, he points out fares did not go up immediately following the US Airways-America West merger five years ago and this year's Delta-Northwest merger.

"After a year or so, we usually find that a lot of times they take away the benefits we've gotten, air fares start to slowly rise up and the benefits we were originally seeing are going away pretty quickly," travel agent Dan Hanes said.


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