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Continental, United lay out plan for merging FAA certificates

Date: September 2, 2010
Type: Media Article

Source: Airline Biz

When we talk about a merger between United Airlines and Continental Airlines, we tend to think of it as a simple marriage of two parties.

But in fact, between the two of them, the carriers hold five different operating certificates that must be dealt with as the two consummate their coupling.

Continental has separate air carrier operating certificates for itself and its Continental Micronesia unit. United has an air carrier operating certificate. The certificates are issued under Part 121 of the federal aviation regulations, FARs.

In addition, United and Continental both hold Part 145 repair station certificates that allow them to work on airplanes.

In a memo emailed to Continental employees Wednesday, Continental laid out the sequence it and United will take after their legal merger, expected to close on Oct. 1:

  1. Continental and Continental Micronesia will combine their air carrier operating certificates.
  2. Continental and United will combine their operating certificates.
  3. The two carriers  will combine their repair station certificates.

It didn't set target dates for the actions, which require Federal Aviation Administration approval. Getting the approvals is "a long-term process that will follow a series of steps to be outlined in a transition plan to be submitted to the FAA later this month," the email message said.

In United's similar message to its employees Wednesday, United vice president Michael Quiello explained:

"We have decided that the merged airline will retain the legacy Continental operating certificate and the legacy United repair station certificate. This was a technical decision based on a variety of factors.

"In addition, the Continental Micronesia operation will be combined with Continental's in advance of the integration between the Continental and United operations. This will allow us to avoid delaying the larger, more complicated integration of the United and Continental operations and will simplify some of the later integration steps between the two carriers."

Quiello told employees that the process "is expected to take more than a year. Certain processes and procedures may remain separate or parallel and partitioned for some time even after SOC, pending final integration."

On a separate matter, Continental chairman, president and CEO Jeff Smisek put out an angry statement denying that its Cleveland hub will be seriously downsized post-merger.

He was reacting to an internal analysis that came out in a San Francisco lawsuit that challenges the United-Continental merger. That analysis, which showed Cleveland losing a lot of flights, was just one of many simulations, Smisek said.

"We consider Cleveland an important hub and one of our hometowns and resent this attempt to cause concern among our customers and employees," Smisek said.

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