United, Continental Merge Into World’s Largest Airline

United Airlines parent UAL Corp. (Nasdaq: UAUA ) and Continental Airlines, Inc (NYSE: CAL ) announced today (Monday) that they plan to merge and create the world's largest airline in a stock swap valued at $3.17 billion. The merger is the is the biggest airline deal since Delta Air Lines, Inc. (NYSE: DAL ) bought Northwest Airlines Corp. in 2008, and it further demonstrates how an industry plagued by losses has devolved into a pattern of consolidation. The "merger of equals," as described by the companies, would top Delta as the biggest global carrier, have combined annual revenue of $29 billion, and $7.4 billion in unrestricted cash. The deal should yield cost savings of $1 billion to $1.2 billion by 2013.