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August 29, 2010 -
The Department of Justice announced on Friday that in light of the
agreement by United Airlines Inc. and Continental Airlines Inc. to
transfer takeoff and landing rights (slots) and other assets at Newark
Liberty
Airport to Southwest
Airlines Co., the department has closed its investigation into the
proposed merger of UAL Corporation, the parent of United, and
Continental.
United and
Continental entered into the arrangement with Southwest in response to
the department?s principal concerns regarding the competitive effects of
the proposed United/Continental merger. The proposed merger would
combine the airlines? largely complementary networks, which would result
in overlap on a limited number of routes where United and Continental
offer competing nonstop service.
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The
largest such routes are between United?s hub airports and
Continental?s hub at Newark airport, where Continental has a high
share of service and where there is limited availability of slots,
making entry by other airlines particularly difficult.
The transfer of
slots and other assets at Newark
to Southwest, a low cost carrier that currently has only limited service
in the
New York metropolitan area and no Newark service, resolves
the department?s principal competition concerns and will likely
significantly benefit consumers on overlap routes as well as on many
other routes. The slot transfer is through a lease that permanently
conveys to Southwest all of Continental?s rights in the assets, in
compliance with FAA rules.
Led by the office
of the Ohio Attorney General, the offices of the attorneys general from
California,
Ohio, Texas, Virginia, Pennsylvania, North Dakota, New Jersey,
Hawaii and the District of Columbia have also been
investigating the proposed merger. The department is supportive of the
states? efforts to have any of their additional concerns about the
proposed merger addressed.
United Airlines,
based in Chicago, is the third largest
carrier in the United States by revenue. In 2009,
it collected $16.3 billion in revenue carrying approximately 80 million
passengers. United and its regional affiliates offer service to more
than 230 destinations in the
United States and 30 other countries
throughout the world.
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