United Airlines and Continental Airlines have announced a $3 billion merger.

The boards of the two companies met yesterday to approve the tie-up, which will create the world’s largest airline.

Together, United and Continental currently fly to 370 destinations worldwide, flying 144 million passengers.

The new group will be named United Airlines, with new branding combining the Continental colours with the United name.

Jeff Smisek, the chairman and chief executive of Continental, is likely to become chief executive of the merged carrier and Glenn Tilton, United’s chief executive, would be named the non-executive chairman for two years.

Tilton called the deal “great… for our customers, our employees, our shareholders and our communities”.

“We are creating a stronger, more efficient airline, both operationally and financially, better positioned to succeed in a dynamic and highly competitive global aviation industry,” he said.

The airlines said front line employees would be “minimally affected”, with staff reductions coming from retirements and voluntary redundancies.