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May 11, 2010 Portlandbiz

Airline merger creates possibilities for PWM

Paul Bradbury believes the timing of the $3 billion proposed merger of United Airlines and Continental may dovetail nicely with the construction of the Portland International Jetport's new $75 million terminal.

Bradbury, the airport's manager, says that when the new terminal is completed, the jetport plans to reconfigure its gates for its air carriers. Depending on when the merger, announced earlier this month, is completed, he says it could make that process more convenient for the jetport and its passengers. Both United and Continental currently operate out of Portland.

If the merger takes six months to complete instead of 18 months, Bradbury says the jetport could land another air carrier that much sooner. "Right now if a new carrier wanted to come here, we don't have the space to accommodate them," he says.

When completed, the 137,000-square-foot expansion will double the size of the airport's terminal and include three new gates, eight passenger screening lanes, a new baggage-handling system and a pedestrian bridge over the roadway. Bradbury previously told Mainebiz in March the terminal expansion project would help the jetport attract one more air carrier. The proposed merger between United Airlines and Continental could free up even more space and allow for more than one additional air carrier, he says.

Bradbury and other city officials held a groundbreaking ceremony last week to kick off the construction project, slated for completion in January 2012.

If federal regulators approve the merger, Bradbury says the jetport would go from having six air carriers to five. But he says the number of flights that United and Continental currently make in and out of the jetport shouldn't change. "There isn't a ton of overlap," he says.

United services hubs at Washington, D.C./Dulles airport and Chicago while Continental services a hub in Newark, N.J., and a seasonal hub in Cleveland.

Currently, United is the jetport's fourth largest air carrier with a little more than 14% of the jetport's market share of 861,570 embarking passengers in 2009. Continental is the jetport's smallest air carrier with a little more than 9.5% of the market share in 2009. The two airlines combined transported more than 205,000 passengers in 2009, which is second to the 240,378 passengers served by U.S. Airways, the jetport's top air carrier, last year.

"Together, they will likely still garner the total of their parts," Bradbury says.

The jetport's other three air carriers are JetBlue, Air Tran and Delta. Air Canada also began daily flight service to and from Toronto in April.

The Associated Press reported that United CEO Glenn Tilton and Continental CEO Jeffery Smisek hope the merger will enable them to draw more business travelers who will pay top dollar for last-minute tickets. They also said the merger will enable United to boost revenue by up to $900 million per year.

The new parent company will be called United Continental Holdings Inc. and have about $29 billion in annual revenue, based on 2009 results, and $7.4 billion in unrestricted cash, according to the AP. The airlines said combining would save them $1 billion to $1.2 billion a year by 2013.

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