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By Jim Berard |
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May 7, 2010 - The
Chairman of the House Committee on Transportation and Infrastructure
today announced his opposition to the proposed merger between
United Airlines and Continental Airlines.
“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,” the letter begins. |
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“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,” Oberstar’s letter reads. Oberstar urged the Justice Department to consider three primary issues: • Whether the transaction presents a reasonable possibility that further consolidation activity among competing carriers will follow; • 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; and
• Whether the
transaction would alter the structure of the
Oberstar warned
that the combination of domestic consolidation and international
alliances among the major airlines will result in the world aviation
market being carved up by three international mega-carriers. He asked
the department to give his concerns full consideration when evaluating
the merger because the transaction “could have major and lasting
consequences” for American consumers. |