Justice Department Approves Continental-United Merger

Late last week, the Department of Justice (DOJ) concluded its investigation into the United-Continental merger and cleared the deal of anti-trust issues. A September 17 shareholder vote remains the only major hurdle left for the $3 billion merger.

The DOJ concluded its investigation in record time, only requiring Continental to lease 18 pairs of takeoff and landing slots at Newark Airport to Southwest Airlines, as a condition for approving the merger.

The government’s approval of the merger brought a swift response from House Transportation Committee chairman James Oberstar (D-MN). A vocal critic of airline consolidation, Oberstar indicated he planned to follow through on his pledge to introduce legislation to re-regulate the industry if the United-Continental merger was approved.

“When Congress deregulated the airlines in 1978, we were promised better service, added competition, and more choices for consumers,” said Oberstar. “With the United-Continental merger, our domestic carrier fleet will have shrunk to four network carriers. Can a US Airways-American Airlines merger be far behind?”

Oberstar echoed concerns raised by the IAM, saying airline consolidation has led to fewer choices, reduced levels of service and increased prices.

“The IAM has raised our concerns before Congress, various government agencies and at the bargaining table,” said Transportation GVP Robert Roach, Jr. “We will continue meeting with Congress, Governors, State Legislators and any other party to protect the interests of all the employees that could be affected by this transaction.”

The airlines expect the transaction to close by October 1, 2010.