Airline ETF Gets Off the Ground Following Merger

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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 views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: ETF , FAA

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