The chief executive-elect of what would be the world's largest airline said Monday he saw no "material" antitrust issues from the combination of UAL Corp. (UAUA) and Continental Airlines Inc. (CAL).

The third and fourth-largest U.S. carriers announced a definitive $3 billion merger deal that would see Continental Chairman and Chief Executive Jeff Smisek become chief executive of the enlarged entity and executive chairman as early as the end of 2012.

Labor-integration issues and competition concerns have been the main barriers to successful deals in the airline sector, but Smisek was sanguine about antitrust barriers, telling CNBC he saw no material barriers.

The plan outlined Monday contained few surprises after a week of leaks. The airlines, which already have a commercial alliance after failing to reach a merger deal two years ago, also plan to draw management "equitably" from the ranks of both airlines. Analysts view Continental as having the stronger management team.

The new carrier will be based in United's Chicago headquarters and retain the United name, but it will use the logo and aircraft livery of Houston-based Continental. Smisek will work from both cities.

The companies aim to close a deal by the fourth quarter. They plan to retain all 10 of their combined domestic hubs and secure an estimated $1 billion to $1.2 billion in synergies without any compulsory layoffs. Analysts had expected at least one of the hubs to be shuttered, with Cleveland seen as the most likely target.

The synergies would include $800 million to $900 million in revenue gains from pro forma combined sales of $29 billion last year. The full annual targeted cost synergies of $200 million to $300 million would arrive by 2013, the companies said in a statement.

The merger agreement would see 1.05 UAL shares exchanged for each Continental share, giving United shareholders 55% of the enlarged company. It contains a $175 million break-up fee, according to a regulatory filing.

The two key barriers to the plan will be securing employee agreement and approval from competition authorities on both sides of the Atlantic.

Some airline executives who have been through the regulatory wringer are sanguine about the prospects of an enlarged United, despite the more-aggressive noises emanating from the Department of Justice under the Obama administration.

"Any transaction that's being done now wouldn't come close to violating antitrust law." said Doug Parker, chairman and chief executive of US Airways Group Inc. (LCC), in an interview last week.

Continental revived merger talks following renewed discussions between United and US Airways that were widely seen as a means to lure the Houston carrier back to the negotiating table. Parker said last week that he was "disappointed" by the leaks of his own talks, which he said did not come from his side.

United and Continental plan to retain two labor representatives on the new company's board but didn't seek approval from powerful pilots' representatives ahead of the pact, a strategy used by Delta Air Lines Inc. (DAL) in its merger planning with Northwest Airlines.

Pilots' leaders from both companies said in a joint statement that they would stand "shoulder to shoulder" to support the merger or oppose a pact if it fails to protect members' rights.

The companies will hold an analysts' call at 8:30 a.m. EDT.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
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