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By DAVID KOENIG and JOSHUA FREED, AP Airlines Writers


      Shareholders of United and Continental airlines voted Friday to
approve a combination of their companies that would create the
world's biggest airline and could have far-reaching effects on
where they fly and how much they charge passengers.


      The companies expect the $3 billion stock swap to close in the
next two weeks after tying up loose ends. Regulators in the U.S.
and Europe have already signaled approval.


      At both companies, the vote for the deal topped 98 percent.


      With the voting over, the real work begins, including combining
two separate groups of highly unionized workers, merging
reservations systems and putting new paint jobs on the planes.


      It likely will be some time before passengers notice much
difference when they fly Continental or United. The companies
expect it will be at least a year before federal authorities
approve their request to fly as one airline, which will be called
United and painted in Continental's colors.


      Shareholders of United parent UAL Corp. will own 55 percent of
the new company, to be called United Continental Holdings Inc. and
based in United's hometown of Chicago. It will be led by
Continental Airlines Inc. CEO Jeff Smisek.


      The UAL acquisition of Continental will combine United's
strength in the Midwest, the West Coast and across the Pacific with
Continental's presence in Texas, the East Coast and routes to
Europe and Latin America. The airlines hope that by forging a
larger network, they will attract more top-dollar corporate
travelers while reducing costs.


      Smisek hinted at layoffs Friday, saying there will be
overlapping jobs when the two combine, but he did not give any
numbers.


      There's also the matter of a lawsuit by several dozen passengers
who claim that a United-Continental combination will lead to fewer
flights and higher fares. A federal judge in San Francisco is
scheduled to hear closing arguments Friday on a request to block
the deal.


      Even though United and Continental overlap on few routes,
"losing a major competitor is likely to make prices rise - all
things equal on the economy and fuel prices," said Rick Seaney,
the CEO of FareCompare.com.


      Seaney noted that when Delta Air Lines Inc. bought Northwest
Airlines in 2008 - which made Delta the biggest airline, for a
while - the combined company reduced the supply of seats on U.S.
flights. He expects the same to happen when United and Continental
completely merge their operations.


      The companies say they compete with low-cost carriers on about
three-fourths of their U.S. routes, which will help keep fares
down.


      Measured by traffic - the number of miles flown by paying
customers - the new United would leapfrog Delta, Air France-KLM and
American Airlines to become the world's biggest airline.


      Size is no guarantee of profits in the airline business. UAL and
Continental together lost nearly $7 billion in 2008 and 2009 due to
high fuel costs and the recession. Both returned to profitably last
quarter, as fees and higher fares boosted revenue.


      The history of the airline industry has been littered with
mergers that didn't work out as well as planned.


      American Airlines parent AMR Corp. bought TWA during a recession
in 2001. Within a few years, American had dropped TWA's St. Louis
hub and furloughed most of the TWA workers. The 2005 deal to
combine US Airways and America West is still plagued by animosity
between the two labor groups.


      Continental and United talked about a merger in 2008, but
Continental - the smaller but more financially secure of the two -
walked away from the table. Talks resumed this year after Delta's
acquisition of Northwest seemed to go smoothly, creating a more
powerful competitor.


      UAL and Continental stock will continue to trade until the deal
closes, at which time Continental shareholders will get 1.05 shares
in the new United for each Continental share they owned.


      Koenig reported from Dallas, and Freed reported from
Minneapolis. Associated Press Writers Juan A. Lozano in Houston and
Don Babwin in Elk Grove Village, Ill., contributed to this report.
      

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Continental Airlines shareholders have approved a deal to
combine with United to form the world's biggest airline.

Approval of Continental sale to United Airlines forms world's biggest airline

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