One of the biggest mergers has just occurred between two of the  airline industry’s most mammoth air carriers. The related airline exchange traded fund (ETF) and shares are moving on the news.

Two of the airline industry’s largest carriers are merging to create the largest airline company ever. United Airlines (NYSE: UAUA) and Continental Airlines (NYSE: CAL) announced a $3 billion merger this morning.

Jad Mouawad and Michael de la Merced for The New York Times report that the all-stock deal would form a coast-to-coast American behemoth with a leading presence in the top domestic markets, including New York, Chicago and Los Angeles, along with an extended network to Asia, Latin America and Europe. [Can the Airline Industry Rebound?]

Together, these companies would create  tight low-cost competition to both home and abroad travelers. Continental will keep their presence, with current logo, livery and colors and maintain a large presence in Houston. Christopher Hinton for MarketWatch reports that this deal is spurring further deals and mergers within the industry.

This deal will provoke both airlines to create one world-class airline, with strength and staying power for the long-term. [Iceland’s Impact on Airline ETF.]

For more stories about airlines, visit our airline category.

  • Claymore/NYSE Arca Airline (NYSEArca: FAA): Continental is 15.2%; Delta is 15.9%; United Airlines is 4.1%. FAA is up nearly 2% this morning in the wake of the deal.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.