Tuesday, July 27, 2010

EU Approves Continental/United Merger

The European Commission announced today that it will clear the pending merger between Continental and United.  See Press Release, Europa, Mergers: Commission Approves Merger Between United Air Lines and Continental Airlines, IP/10/1010 (July 27, 2010) (available here).  The Commission's analysis of the tie-up concluded:

The activities of the parties overlap in the provision of scheduled air passenger and cargo transport between the EEA [European Economic Area] and the US. The proposed merger only has a limited impact on air cargo transport because of the parties' limited presence in this market.

As regards air passenger transport, United and Continental's networks are complementary as they have hubs in different US cities. The proposed merger therefore only leads to small, incremental increases in the market shares of the parties, where one airline markets seats on flights operated by another carrier or offers an indirect service in competition with a nonstop service operated by the other airline from its US hub.

The Commission's investigation confirmed the complementary nature of United's and Continental's respective networks as regards transatlantic EEA-US routes and the fact that their combination will not give rise to concerns on any specific route.

The Commission noted that its investigation focused only on Continental/United and in no way impacts its ongoing inquiry of the carriers' involvement in the Star Alliance.  Meanwhile, on the other side of the Atlantic, U.S. antitrust officials at the Justice Department are still scrutinizing the merger. 


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Mergers continue to be the only way for the major airlines to remain profitable in a very competitive business; however, is the United States heading for a single national airline?

My wife refuses to fly on the airlines because it has gotten so unpleasant; I keep hoping some bright guy like Fred Smith figures out and builds an airline with comfort and service.

John M. White, ATP Pilot

Posted by: John White Aviation Attorney | Jul 27, 2010 5:44:23 PM

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