Saturday, May 29, 2010

Thousands flee Ecuador, Guatemala volcanos

GUATEMALA CITY : Thousands of people were evacuated and airports were closed as two volcanos erupted in Guatemala and Ecuador Friday, choking major cities with ash, and leaving two dead, officials said.

Guatemalan President Alvaro Colom declared a 15-day state of emergency around the Pacaya volcano, 50 kilometres (31 miles) south of the capital.

The volcano erupted again Friday after first bursting back to life Wednesday, killing two people, including a television reporter covering the event.

In Ecuador, the Tungurahua volcano exploded into action Friday, forcing the evacuation of at least seven villages and closing down the airport and public schools in Guayaquil, the country's largest and most populated city.

As the 2,552 metres (8,372 feet) Pacaya volcano exploded anew on Friday, with billowing clouds of ash and dust, Colom said La Aurora International Airport, in Guatemala City, would remain closed until Saturday "because we've got to clean the runways and surrounding areas" of ash.

The airport closures were reminiscent of the massive blanket of ash Iceland's Eyjafjoell volcano spewed out last month causing the biggest aerial shutdown in Europe since World War II, affecting more than 100,000 flights and eight million passengers.

President Colom said the eruptions of Pacaya since Wednesday had killed two people, injured 59, left three children missing and destroyed 100 homes.

The Emergency Management Coordinator said between 1,700-1,900 people have been evacuated from their homes to nearby shelters in three departments affected by the emergency decree.

The education ministry also suspended classes in the emergency area.

On Friday, the volcano was rocked by constant explosions and spewed bright-colored plumes into the air.

Guatemala City was covered in a blanket of ash and dust, as people evacuated from the danger zone wandered the streets darkened by the ash cloud and the city's two million inhabitants tried to cope with the catastrophe.

The head of the national seismological institute warned more eruptions could take place "in the coming days" at the most active volcano in Central America.

The Pacaya volcano has been active for 49 years and has experienced six large eruptions.

The head of the national seismological institute Eddy Sanchez said the volcano had accumulated a lot of energy over several years. "Like a pressure cooker, it will release the pressure violently," he told reporters.

He warned that lava would continue to spew out at high altitudes.

The charred body of television journalist Anibal Archila was found near the volcano by a colleague, who said the victim could not escape the raining rocks and other projectiles thrown out when the volcano exploded late Thursday.

"We decided to stay a few minutes longer taking more photographs. Suddenly, we heard rumblings and rocks began falling all around so we had to get out running," a driver for one of the reporters covering the scene with Archila told the Nuestro Diario newspaper.

The second eruption-related fatality was that of a 22-year-old man who fell to his death as he cleaned volcano ash from the roof of a school.

Colom vowed government action to clean up the gray mess.

"The people must feel confident that the state is responding," the president said as he announced he would travel to the most affected municipalities to work with emergency committees.

Within a 100-kilometre (62-mile) radius of the volcano, locals armed with brooms and shovels scrambled to remove sand and ash from the roofs and courtyards of their homes.

"We've only cleaned the backyard so far and we've already filled a large garbage bag," Isabel Estevez told AFP. She and her husband began cleaning the sediment dumped by the volcano, up to five centimetres (two inches) thick in some places.

In Ecuador, meanwhile, the Tungurahua volcano experienced one of its biggest eruptions Friday, spewing columns of ash and rock prompting evacuations of at least seven surrounding villages.

"Certain measures have been taken, including the closure of Guayaquil airport until further notice and the suspension of classes in Guayas province, as we make a new assessment" of the situation, said Yuri De Janon, regional coordinator of risk management.

He said the ash fallout from the volcano was affecting Guayaquil and four other towns in Guayas.

Hugo Yepes, director of Ecuador's Geophysical Institute, noted that the volcano was at one point spewing molten rocks and large clouds of ash and gas 10 kilometres (33,000 feet) into the sky. But he said the volcanic activity had since decreased. - AFP/jy

Friday, May 28, 2010

Guatemala volcano forces airport closure, kills one

GUATEMALA CITY : Guatemalan President Alvaro Colom has declared a state of emergency after a powerful eruption at the southern Pacaya volcano killed one person and forced the international airport to close.

Ash blanketed the region as rocks and lava spewed from the volcano 50 kilometers (31 miles) south of the capital, as Colom late Thursday issued the emergency decree lasting at least 15 days for the three departments nearest the eruption, which began Wednesday night and has since built in intensity.

The La Aurora International Airport was closed to ensure planes were not flying through the volcano's hazardous ash cloud or landing on the ash-strewn runway, said spokeswoman Monica Monge. Incoming flights were being diverted to airports in other parts of the country, she told reporters.

Some 1,600 people were evacuated from the slopes of the volcano, which rises 2,552 meters (8,372 feet) above sea level in the tropical Central American nation.

The burnt body of Guatemalan television journalist Anibal Archila was found near the volcano by a colleague, who said the reporter had been unable to escape the raining rocks and other projectiles thrown out in the eruption.

Three children aged seven, nine and 10 are also missing in the area, officials said.

There are 288 volcanoes in Guatemala, eight of which are active.

- AFP /ls

Sunday, May 23, 2010

Confessions of a frequent-flier program skeptic

Christopher Elliott, Tribune Media Services
May 18, 2010 -- Updated 1637 GMT (0037 HKT)

(Tribune Media Services) -- Call me a frequent-flier program skeptic.

I take a dim view of any scheme that promises you the world in exchange for all your business. Not that I don't like sitting in first class, staying in a suite or being treated like a movie star. I mean, who doesn't?

Having covered the travel industry for most of my career, I just don't believe in "win-win" propositions. I think there's a steep and often hidden price to be paid when you collect miles. The game can easily turn into an obsession that disables your common sense, compelling you to make completely irrational purchasing decisions.

Fact is, offers of "free" products, perks and preferred status in exchange for racking up points through travel or credit card purchases aren't for everyone. They probably aren't for you.

I won't suggest that loyalty programs are morally wrong and that they divide travelers into haves (the ones who get to board anytime on the red carpet) and have-nots (the unlucky schlubs wedged into the middle seats), even though I could probably write an entire column on that topic.

When I say I don't believe in "win-wins" I'm not even referring to the recent precipitous devaluations in mileage programs. For example, at the beginning of this year, Hilton "updated" its award levels for free stays, increasing the number of points you need. An exasperated reader in Philadelphia sent me the notice with the following advice for his fellow frequent guests: "Use your points -- now!"

Nor am I talking about the onerous "co-pays" that some airlines recently added for mileage redemption, like the one Perry Bird had to shell out when he recently tried to book an upgrade on a flight from Dulles International Airport to St. Martin. It used to cost 60,000 miles for a bump to business class on United Airlines. "Now, United wants my 60,000 miles and an additional $1,400 for the same upgrade," he told me. "Puhleese!"

I don't even have a problem with the maddening terms and conditions that stipulate that the points and miles don't belong to you and that companies reserve the right to change the rules anytime without notice. I'm not making this up. Here's an excerpt from American Airlines' terms and conditions: "Accrued mileage credit and award tickets do not constitute property of the member. . . . American Airlines may, in its discretion, change the AAdvantage program rules, regulations, travel awards and special offers at any time with or without notice."

No, in my view, the winners obviously are the travel companies that have seduced their best customers with creature comforts that they probably ought to be giving everyone, and the losers are the elite-level lemmings, who have become blindly brand-loyal.

Don't bother sending me hate mail. When word got around that I -- a loyalty-program atheist -- was working on a story about the value of reward programs, it didn't take long for the true believers to offer me a piece of their mind.

"Of course they're worth it," snapped Charles Owen, a college professor in East Lansing, Michigan. "You look at the costs and the benefits. The only cost associated with collecting miles is our decision to have a SkyMiles American Express with the associated fee. Other than that, they just accumulate, and every now and then we use them."

And use them he has, to visit Europe and the Caribbean. Owen said he takes two "free" flights a year, thanks to a credit card that allows him to collect miles, which is also known as an affinity card. Apart from the annual fee on a card, these programs appear to have no downside. Sure, there are blackout dates and restrictions, and award seats aren't always available. But it's a free ticket, right?

Not right. There's more to loyalty programs than meets the eye, according to consumer advocate Jo Anne Shumard. "Cards that offer perks to consumers often do so at a premium interest rate," she warned. "I even have one for airline miles, but it's almost three times the interest rate of my lowest credit card interest rate."

Who should participate in a loyalty program?

If you're a managed frequent business traveler, you have my blessing. By "managed" I mean that your company works with preferred vendors, and you fly, drive and stay with a set of companies whether you want to or not.

Your loyalty isn't for sale. Your points are just a byproduct of your business trips, and you're far less likely to participate in irrational point-collecting or making silly mileage runs at the end of the year to qualify for coveted elite status, which entitles you to extra-special treatment when you're on the road.

For instance, "Chairman's Preferred"-level frequent fliers on US Airways get priority check-in, security lanes and early boarding, unlimited free upgrades in the United States, up to three free checked bags and complimentary airport club membership. Alas, to reach that level, you have to fly 100,000 miles within a calendar year (other terms also apply).

Christina Pappas, a Boston-based marketing consultant and frequent traveler, thinks it's important that you control the miles, not the other way around. "All things being equal, I'll try to remain loyal when possible," she told me. "But there are times when it doesn't make sense for me to make two connections just to get my points."

If you're an unmanaged frequent business traveler, and you want to collect points, you're playing a dangerous game. Falling in with the wrong crowd on FlyerTalk, a popular hangout for frequent travelers, isn't the biggest risk to you. It is, instead, making purchasing decisions that are in the interests of your program, but not you.

Bernard Pollack, a frequent traveler and loyalty program member who lives in Dakar, Senegal, and is an elite-level frequent traveler with US Airways, United, Hilton and Starwood, thinks that programs warp your perspective, often enticing you to spend more on travel or ignore better prices with a competitor.

"I don't believe people should choose, and certainly not pay more for, certain airlines, hotels and cars because of the loyalty programs," he said.

What if you're traveling for pleasure? If your trips are infrequent, you should stay on the sidelines, says Allison Danziger, director of TripAdvisor Flights. "One specific case is where a traveler would fly less often than the frequent flier mile expiration window for their program," she added.

"Frequent flier miles on most carriers expire after one to three years of inactivity." In other words, your miles would expire before you could use them, obviously negating any benefit.

If you're a frequent leisure traveler, then sure, go for it, but with the same caveat I offered the unmanaged business travelers: Don't get addicted and don't let it control you.

Look, I could spend a couple of paragraphs talking up loyalty programs in an effort to convince you that I can be balanced on this subject. And while it's true that these schemes aren't without benefit, I figure that they have enough apologists already. Besides, that's not my department; I handle the complaints.

Speaking of complaints, here's a cautionary tale for anyone thinking of offering their loyalty to a travel company. It comes to us by way of Robin Forman, a retired librarian in Miami and a frequent leisure traveler.

She used some of the American Airlines miles that she'd collected by flying and making purchases with a Citibank MasterCard to upgrade on a flight from Brussels to Chicago. But when the flight was canceled after the recent volcanic eruption, the carrier pocketed a $350 "service charge" for using the miles.

Forman asked for a refund. "Service charges are necessary to help offset the costs associated with these transactions," an airline representative told her in an e-mail rejecting her request. "I'm sorry my response couldn't be more positive."

Yeah, me too.

Mileage addicts may argue that people like Forman should double down and focus their loyalty on a single company. After all, top-tier elites don't have to pay a lot of the fees that garden-variety frequent travelers do. But I see her story as a reason to reconsider loyalty programs entirely. Not to pick on American Airlines -- a lot of the legacy airlines have these annoying fees for ticket awards -- but if this is loyalty, what's the point?

And that's the thing: The harder you look at so-called "rewards" programs in travel, the harder it is to believe in them. They successfully entice travelers to drive, fly and stay with a particular company, giving them a level of service the companies should offer every customer.

But more often than not, the loyalty goes only one way.

(Christopher Elliott is the ombudsman for National Geographic Traveler magazine. You can read more travel tips on his blog, or e-mail him at

Saturday, May 22, 2010

British Airways reports record annual loss of 531m

LONDON (AFP) - – British Airways on Friday posted a record annual pre-tax loss of 531 million pounds (609 million euros, 765 million dollars) on slumping sales but forecast it would break even this year.

BA, which faces a cabin crew strike next week, said its net loss widened to 425 million pounds in the 12 months to March from 358 million pounds in the previous year. Revenues tumbled 11.1 percent to 7.99 billion pounds.

"This is our second consecutive year of record losses but we take heart from the fact that, while our revenue has fallen by one billion pounds, so have our costs," Chairman Martin Broughton said in a statement.

Market expectations had been for a larger pre-tax loss of 600 million pounds after the group had a smaller shortfall of 401 million pounds in the previous 2008/2009 financial year.

The airline, which is slashing costs and merging with Spanish rival Iberia in a bid to return to profitability, has been hammered by the global economic downturn which has hurt demand for air travel.

Other airlines have also suffered badly, with peer Air France-KLM earlier this week announced record losses of 1.55 billion euros in its year to March.

BA said Friday that it cut almost 3,800 jobs, or about 9.4 percent of its total workforce, during the 2009/2010 financial year. Since September 2008, it has axed more than 6,000 positions in total.

British Airways said it was aiming to break even in the current 2010/2011 financial year.

"Market conditions are showing improvement from the depressed levels in 2009/10," the company said.

"Cargo is showing significant signs of improvement. Passenger revenue is recovering, with increased corporate activity, particularly across the Atlantic.

"On the basis of these market improvements, we are targeting revenue growth of some six percent and breakeven at the profit before tax level."

BA cabin crew plan to go ahead with a five-day strike next week after a court upheld their right to stage the action on Thursday, according to officials at the Unite trade union.

The strike is set to begin Monday. Two further five-day strikes, starting on May 30 and June 5, will also go ahead if the dispute is not settled.

Unite won an appeal on Thursday against a court injunction which had blocked a planned stoppage in the long-running row over pay and conditions.

Group chief executive Willie Walsh lashed out at Unite.

"Returning the business to profitability requires permanent change across the company and it's disappointing that our cabin crew union fails to recognise that," he said in the results statement.

"Structural change has been achieved in many parts of the business and our engineers and pilots have voted for permanent change."

But joint Unite leader Derek Simpson fought back, telling BBC radio on Friday that there was a "total lack of confidence" in BA management.

Cabin crew staged walkouts in March which were marked by sharp disagreements between the union and BA over the impact of the industrial action.

Walsh added Friday that the Iberia merger was on track to complete in late 2010 and would lead to annual cost savings of 400 million euros after five years.

The combined company will be known as International Airlines Group, with both BA and Iberia retaining their separate operations and brands.

The results did not show the impact of the volcano ash chaos which occurred after the end of BA's financial year.

BA said earlier this month that passenger numbers fell by almost one quarter in April as a result of travel chaos sparked by a huge ash cloud from an Icelandic volcano.

"The current financial year could hardly have had a worse start with the unprecedented closures of UK airspace following the eruption of the volcano in Iceland," Walsh said.

"This added to the aviation industry's current financial woes while highlighting its crucial contribution to the economy.

"We are pleased that the European Commission has agreed that national governments can compensate airlines for the losses incurred."

Airspace across Europe was closed for up to a week last month after Iceland's Eyjafjoell volcano began spewing a cloud of ash on April 14. The shutdown was the biggest in Europe since World War II.

Friday, May 21, 2010

At least 160 dead in India plane crash

Reuters - 52 minutes ago

NEW DELHI - An Air India Express passenger plane from Dubai overshot a runway and crashed outside an airport in southern India on Saturday, killing at least 160 people in one of the worst air accidents in India in years.

The accident occurred near Mangalore airport in Karnataka state. There may have been five or six survivors, local media said.

Air India said the plane was a Boeing 737-800, with 166 people on board, including six crew members. Earlier estimates of the number of people on the plane had varied slightly.

Air India Express is a budget airline ran by state-run carrier

"At least 160 passengers have died in the crash," V.S. Acharya, home minister of the southern state of Karnataka, told reporters. "At least five to six people have been taken to hospital, their condition is not known."

Television channels said the plane crashed around 6.30 a.m. . TV images showed it struck a forested area. Flames were seen blazing from of some of the wreckage as rescue workers fought to bring the fire under control.

One television channel showed a fireman carrying in his arms what seemed to be the mangled remains of a child.

"The aircraft has broken up into pieces and fire has engulfed the aircraft. There is lot of smoke," said Gopal Hosur, a senior police officer in Mangalore.

"The plane apparently overshot the runway and has crashed. We have news that the plane caught fire after crashing," said Rohit Katiyar, a top airport security official.

Sunday, May 16, 2010

Boy survivor of Libya air crash 'stable but confused'

AFP - Friday, May 14

TRIPOLI (AFP) - – A Dutch boy who miraculously survived a Libyan plane crash that killed 103 people including his parents is confused but stable, a doctor said Thursday, as relatives arrived in Tripoli to comfort him.

The boy, identified only as "Ruben" by the Dutch foreign ministry but more fully named by the Dutch media as nine-year-old Ruben van Assouw, has come round after surgery to his smashed legs, the doctor treating him in a Tripoli hospital said.

"He woke up (late Wednesday night) and is in good condition," the doctor said, while stressing that the boy, the sole survivor of Wednesday's disaster, was confused and "still is not reacting well to his surroundings."

"The child underwent several rounds of surgery to his legs. He had simple fractures and double fractures," the doctor said on Libyan state television, which also showed pictures of Ruben's legs in casts.

A Dutch foreign ministry spokesman said an uncle and an aunt arrived in Tripoli Thursday on a Netherlands government plane and were taken to the hospital "to make sure that Ruben will see family faces next to his bed." Facts:Deadly plane accidents in the past five years

According to the Dutch NOS public broadcaster, the boy recognised his family and smiled when they entered his hospital room.

Ruben would be flown back home "as soon as his medical condition allows," the spokesman said.

Ministry spokesman Christoph Prommersberger told AFP that Ruben was doing "reasonably well."

"A colleague from the embassy (in Tripoli) was able to speak with him. He told her he was Ruben, nine years old, from the city of Tilburg," Prommersberger said. "He is not in a critical condition."

Dutch newspaper Babants Dagblad said the boy was likely Ruben van Assouw from Tilburg in the southern Netherlands who had been on safari in South Africa with his mother Trudy, 41, father Patrick, 40, and his brother Enzo, 11.

Also on board the Dutch government plane to Tripoli were forensic experts, consular staff and transport ministry staff, the foreign ministry said.

Libya's Transport Minister Mohammed Ali Zidan said a total of 103 people -- 92 passengers of nine nationalities and an 11-strong Libyan crew -- died when an Afriqiyah Airways Airbus A330 coming from Johannesburg disintegrated on landing at Tripoli airport.

The Dutch ministry said on Thursday that 70 Dutch nationals were among the dead, while a diplomat said family members from the Netherlands have been flown in to Libya courtesy of Afriqiyah to identify the bodies and prepare their repatriation.

The ministry added in a statement that "the family of the nine-year-old Ruben, the sole survivor of the disaster", were among those who perished.

Johannesburg private Talk Radio 702 reported on Thursday that at least 10 South Africans died in the crash.

Libya's transport minister said the rest of the dead included two Germans as well as passengers from Britain, France, Finland, the Philippines and Zimbabwe, although he could not give a breakdown of their numbers.

With the plane's black boxes recovered, investigators from manufacturers Airbus and France where the plane was built have also flown to join the inquiry led by Libya, which has ruled out terrorism as the cause of Wednesday's crash.

Witnesses spoke of the aircraft inexplicably breaking up as it came in to land in clear weather.

"It is too soon to know the causes of the accident," Sabri Shadi, the chairman of the board of Afriqiyah Airways, said about the probe into the crash.

"Several committees have been set up to investigate and we need some time before we can draw any conclusions," he said.

"A preliminary report should be published in the next few days but definitive results will not be know for several days, even weeks," the chairman added.

Shadi said that after a first meeting which grouped the team that US investigators were to join the probe on Friday. The crash scene, meanwhile, has been placed under police guard.

Wednesday, May 12, 2010

Boy survives as 103 killed in Libya plane crash

AFP - 1 hour 47 minutes ago

TRIPOLI (AFP) - – A Libyan plane arriving from South Africa disintegrated on landing at Tripoli airport Wednesday, killing 103 people but leaving an eight-year-old boy as the sole miracle survivor, officials said.

Sixty-one Dutch citizens were killed in the crash, the Dutch tourism federation ANWB said, while Libyan Transport Minister Mohammed Ali Zidan listed "Libyans, Africans and Europeans" as among the dead.

Zidan told a media conference that an inquiry was under way to determine what caused the Afriqiyah Airways Airbus A330 to break up massively as it was landing, but he ruled out terrorism.

Libyan television showed teams of emergency workers wearing face masks sifting through the wreckage of the plane, which was scattered in a wide arc across the landing area.

"There were 104 people on board -- 93 passengers and 11 crew members," Zidan said, adding that the remains of 96 victims had already been recovered.

There was only one survivor, an eight-year-old Dutch boy who was being treated in hospital, he said.

The Dutch foreign ministry said the boy was undergoing surgery at a Tripoli hospital for broken bones.

"He is being operated on for fractures from the crash," ministry spokeswoman Ozlem Canel told AFP in The Hague.

"We don't know how serious his injuries are. We know he is being operated on for fractures," she said.

Canel said the government could not confirm that the boy was, indeed, Dutch.

"We don't know for absolutely sure that he is a Dutch citizen," she said. "Hopefully when the operation is over and we are able to see the boy, then we will be able to confirm that he is a Dutch citizen."

Last June, a 12-year-old girl was the sole survivor of a Yemeni plane crash off the Comoros.

Witnesses spoke of the Afriqiyah Airways plane inexplicably breaking up as it came down to land in clear weather at around 6:00 am (0400 GMT).

"It exploded on landing and totally disintegrated," one security official told AFP, speaking on condition of anonymity. Another official said the plane had burst into flames just before landing.

Bongani Sithole, an official of Afriqiyah Airways at Johannesburg airport, said the crash happened "one metre (yard) away from the runway."

Minister Zidan said no terrorism was involved.

"We have definitely ruled out the theory that the crash was the result of an act of terrorism," he said, adding that the two black boxes of the aircraft had been recovered.

The plane was new and had only been acquired by the airline in September.

Afriqiyah Airways listed 93 passengers and 11 crew members on board its flight 8U771 from Johannesburg, which was reportedly due to fly on from Tripoli to London's Gatwick airport.

"Sixty-one Dutch people were killed in the accident," ANWB spokesman Ad Vonk told AFP.

The passengers had been in two separate organised tour groups on their way to Brussels and Dusseldorf, with a stop-over in Tripoli, he added.

A South African aviation official said most of the passengers on the plane were making connections to Europe.

Seven passengers were booked to connect to Gatwick in London, 32 to Brussels, 42 to Dusseldorf in Germany, and one to Charles de Gaulle in Paris, said Nicky Knapp, spokeswoman for Airports Company South Africa.

Britain said it was "urgently" investigating reports that Britons were on board the plane.

Afriqiyah Airways said in a statement on its website that it will offer transportation, assistance and accommodation to relatives of victims of the crash wishing to get to Tripoli.

Wednesday's crash was the deadliest air accident in Libya since December 22, 1992 when a Libyan Arab Airlines plane crashed near Tripoli airport killing 157 people. Related article: Recent deadly plane accidents.

Twenty-two people were killed in an oil company plane crash in January 2000.

In other major accidents, 79 people were killed when a Korean Air crashed in Tripoli in July 1989. And 59 people died in a Balkan Bulgarian Airlines crash near Benghazi in December 1977.

Afriqiyah started operations with five leased planes and signed a contract with Airbus at an exhibition in Paris in 2007 for the purchase of 11 new planes.

It was founded in April 2001 and at first fully owned by the Libyan state. The companys capital was later divided into shares to be managed by the Libya-Africa Investment Portfolio.

Tuesday, May 4, 2010

United, Continental forge world's biggest airline

AFP - Tuesday, May 4

WASHINGTON (AFP) - – United and Continental sealed a three-billion-dollar merger to become the world's biggest airline, in a deal forged to help them navigate strong economic headwinds.

The deal would fuse United's strong Asian presence with Continental's extensive links to Europe and Latin America, a tectonic shift in an industry battling to survive recession.

Airlines around the world are struggling with fallout from the worst recession in a generation, terrorism and costs brought on by an Icelandic volcano which forced the suspension of thousands of flights.

The new airline will fly under the United Airlines name and will hold around seven percent of global airline capacity. It has a market value of around 6.75 billion dollars.

Jeff Smisek, the Continental chief executive who moves to the same position in the new company, said the merger would create "a stronger, more efficient airline, both operationally and financially, better positioned to succeed in a highly competitive global aviation industry."

The companies said they hoped to generate annual savings and new revenues of up to 1.2 billion dollars by 2013.

The deal needs approval from shareholders of the two carriers and US anti-trust authorities, who turned down a United-US Airways deal in 2001.

But Smisek told reporters: "We are confident. There are no material anti-trust concerns. We are increasing competition, we are not reducing competition, with more consumer choice, better consumer choice."

The economic crisis and the rise of low-cost carriers has driven airline alliances and steep cost cutting.

The deal is the latest step to consolidate the US airline sector after Delta's 2008 takeover of Northwest.

British Airways is tying up with with Spanish carrier Iberia to avoid being sidelined by European rivals Air France-KLM and Lufthansa.

United and Continental both had a turnover of more than three billion dollars in 2009 but both reported losses.

"Together, we will have the financial strength necessary to make critical investments to continue to improve our products and services and to achieve and sustain profitability," Smisek argued.

Glenn Tilton, president and chief executive of United parent UAL Corporation, will serve as non-executive chairman of the new United Continental Holdings Inc board until the end of 2012.

He called the deal "a merger of equals to create a world-class and truly global airline with an unparalleled network."

A statement announcing the merger said the boards of both airlines had unanimously approved the deal.

Under the accord, Continental shareholders will receive 1.05 shares of United stock for each Continental share. United shareholders would own approximately 55 percent of the equity in the new company and Continental shareholders 45 percent.

The companies said they expected to complete the transaction by the end of 2010.

The merged giant will maintain United's base in Chicago as its headquarters, while Continental's home city of Houston, Texas will be the number one air hub, the statement said.

Texas Governor Rick Perry clearly thought the headquarters should have been in Houston.

"While we disagree with the decision to locate the headquarters in Chicago, we are encouraged by the company's commitment to Texas and its stated intent to create more jobs for Texans in the future," he said in a statement.

No announcement of job cuts was made, although pilots' unions for both carriers demanded job security and pension guarantees.

United pilots said they would take a "wait-and-see" approach, but believe the format is in place for such a combination to work.

The companies said the new airline will serve more than 144 million passengers per year with 370 destinations in 59 countries.

The combined company promised to offer enhanced service to Asia, Europe, Latin America, Africa and the Middle East from its 10 US hubs.

They said there were no international route overlaps and only "minimal" domestic copying.

US Airways broke off merger talks with United last month, but said it expected consolidation of the fragmented airline sector in the near future.

"It remains our belief that consolidation makes sense in an industry as fragmented as ours," said US Airways chairman Doug Parker.

Few market watchers expected mergers to end with the one announced Monday, and rumors are swirling about a possible American Airlines tie-up with US Airways.