A merger between US carriers United Airlines and Continental Airlines has moved one step closer after the US Justice Department gave the deal its blessing. If the two airlines join forces they will create the world’s largest airline in terms of passenger-miles flown. Presently United and Continental fly a total of 144 million passengers to 370 destinations around the world each year.

A competition investigation into a merger was ended when both airlines said they would surrender some of their landing and take-off slots at Newark Airport, home of rivals Southwest Airlines. It is planned that the new airline will go by the name United but will use the colours currently sported by Continental.

As far as management is concerned, Jeff Smisek, current boss of Continental will take the chief executive’s role at the new airline. United’s Glenn Tilton will take the title non-executive chairman.

It is hoped that the deal, which will be presented for shareholder approval next month, will save both airlines somewhere in the region of $1 billion per year. The deal will be worth $3.2 billion. Both companies are currently running at a loss and a deal, announced in May, is intended to stem those losses.

Airline mergers are featuring heavily in the news as carriers try to find ways of competing in what is still an extremely difficult market. South America could soon have a new market leader if Brazil’s TAM Linhas Aereas is allowed to tie-up with Chile’s LAN. According to TAM a combined airline would offer customers 115 destinations in 23 countries.