Friday, November 6, 2009
There's been a new round of reporting on the possibility of a Continental/United Airlines merger. See, e.g, Michael Doermer & Tom Lavall, Continental May Reconsider Combining with United, Bloomberg, Nov. 3, 2009 (available here); Alison Grant, Talk of Continental/United Merger Renews Questions for Cleveland Hub, Plain Dealer, Nov. 3, 2009 (available here). Adding to the speculation is the fact that United's Chief Executive Glenn Tilton's recent remarks that there needs to be more consolidation in the U.S. aviation industry. See Justin Baer, UAL Chief Sees New Route to Airline Mergers, Fin. Times, Oct. 27, 2009 (available here).
Even if it's true that the U.S. market requires further consolidation, a major merger between United and Continental may face significant legal hurdles. Unlike last year's Delta/Northwest merger, which was completed under the watch of the Bush Administration, Continental and United would be facing a far less benign antitrust enforcement environment. Cf. Christine A. Varney, Assistant Attorney General, U.S. DOJ Antitrust Division, Vigorous Antitrust Enforcement in This Challenging Era, Remarks to the U.S. Chamber of Commerce (May 12, 2009) (available here).