7-May-2010 9:46 AM

Oberstar announces opposition to United-Continental merger

US House Committee on Transportation and Infrastructure Chairman, James Oberstar, announced (06-May-2010) his opposition to the proposed merger between United Airlines and Continental Airlines. Mr Oberstar urged the Justice Department to consider three primary issues:

  1. Whether the transaction presents a reasonable possibility that further consolidation activity among competing carriers will follow;
  2. Whether, to avail itself of the potential benefits of the transaction, the combined carrier is likely to substantially eliminate capacity in such a way as to eliminate travel options between any city-pairs;
  3. Whether the transaction would alter the structure of the US airline industry in such a way as to permit the three largest carriers to create or enhance market power or to facilitate its exercise in either the domestic or the international marketplace. [more]

House Committee on Transportation and Infrastructure: “I strongly urge the Department of Justice to demonstrate its commitment to vigorous antitrust enforcement and healthy competition in the airline industry by disapproving the proposed merger between United Air Lines and Continental Airlines. If United and Continental merge, another domino in a chain of mergers will fall, and there will be strong pressure for further consolidation. As I predicted when I wrote your predecessor in 2008 on the Delta-Northwest merger, approval of that merger created conditions that have persuaded Delta’s competitors to pursue their own combinations. The United-Continental transaction is the latest, but it likely will not be the last.” James L. Oberstar, Chairman of US House Committee on Transportation and Infrastructure. Source: Company statement, 06-May-2010.

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