UPDATE 1-UAL,Continental putting together management team

* Want “equal representation” in top management-Tilton

* Expect team in place by transaction closing-Tilton

* UAL shares up 2.44 pct; Continental shares up 2.56 pct

ELK GROVE VILLAGE, Ill., June 10 (Reuters) - United Airlines and Continental Airlines CAL.N were busy assembling a management team for what will be the world's largest carrier once their merger is official, the chief executive of United's parent UAL Corp UAUA.O said on Thursday.

Speaking to reporters after UAL’s annual shareholders meeting near Chicago, Glenn Tilton said he and Continental CEO Jeff Smisek, who will be head the new company -- United Continental Holdings -- were evaluating executives currently on their staffs.

Tilton, who will be chairman of the new company, said they aim to have the new management ready to work by the time the deal closes later this year.

“Jeff and I are committed to equal representation at the top of the new company,” Tilton said.

The airlines announced in May that UAL would buy Continental for $3.17 billion in an all-stock deal. The carriers say there is minimal overlap in their operations and that rank-and-file employees would see little impact to their numbers.

But Tilton has said there would be reductions among salaried and management employees.

Tilton said United Airlines President John Tague, whom many industry experts had believed was being groomed for the CEO job at UAL, would have strong professional options after the merger. But Tilton declined to say specifically whether Tague would help run the new airline.

Integration planning for the two airlines was under way, Tilton said, adding that the carriers were mapping their functions and establishing integration teams.

UAL and Continental have hired Bain & Company as the integration consultant.

“It’s an art form,” Tilton said. “It’s planning and integration itself.”

Speaking to shareholders during the meeting, Tilton reiterated that consolidation would help stabilize the industry, which has been battered in recent years by overcapacity, low-fare competition and an economic recession that drained travel demand.

“Without this merger we would not be as effective a competitor as we can be,” Tilton said. “We must continue to change.”

UAL’s shares were up 2.44 percent at $21.86 on Nasdaq. Continental shares rose 2.56 percent to $22.80 on the New York Stock Exchange. (Reporting by Kyle Peterson, editing by Maureen Bavdek)