• Bloomberg, Monday, May 3, 2010 10:39 AM

It was years in the making, and left a jilted a suitor stewing, but UAL's United Airlines and Continental Airlines this morning announced that they are joining together through a stock swap valued at $3 billion to form the world's largest carrier in terms of passengers carried, Mary Jane Credeur and Mary Schlangenstein report. The airline will operate under the United name from its Chicago headquarters, but aircraft will fly the Continental logo and colors.

"This is what happens in a merger of equals," says Continental's CEO Jeff Smisek, 55, who will run the airline as CEO while United's Glenn Tilton, 62, will be non-executive chairman. "You take the best of both companies and carry them forward. The United name is very well recognized internationally, Continental's logo is symbolic of great culture and service." In an interview, Tilton said he told UAL's board: "Right deal, right time."

Frequent-flier programs will be combined when the merger closes, United told customers in an e-mail. Before then, each program will continue and the points can be used under existing rules.

In other airline news this morning, Ad Age reports Jet Blue has named Boston-based Mullen as its creative and media advertising agency after a five-month review.

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