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comprehensive legal services for businesses call 201-957-0874

United-Continental Airlines Merger Raises Antitrust Concerns: Part 2

On Wednesday, congressional lawmakers raised serious antitrust concerns with the CEOs of United Airlines parent UAL Corp. and Continental Airlines Inc. over their plan to merge. The merger involves a $3 billion stock swap and would create the world's largest airline by traffic. During the first of two hearings on Wednesday, the CEO's defended their plan, saying that combining the companies is vital for them to continue to compete worldwide and that the airlines' combination will lead to greater financial stability.

One of the most skeptical of the lawmakers, Rep. Dennis Kucinich (D-Ohio), said that the committee he leads, the House Domestic Policy Subcommittee, will investigate whether Continental misled government regulators last year. Continental had insisted that it did not need to fully merge with United, which was the main reason that regulators approved their application for antitrust exemption. Continental was seeking the exemption in order to participate in a trans-Atlantic joint venture with United and other members of the international Star Alliance marketing group.

Kucinich believes that the current proposed merger shows that Continental had always had a long-term plan of a merger with United. He said that he believes that this brings up questions as to whether Continental is currently being completely forthright with regulators and lawmakers about how the company will run post-merger.

Hearings were held Wednesday before the House Transportation Committee and the House Judiciary Committee. A third hearing was held on Thursday before the Senate Commerce Committee. 


WSJ UPDATE: CEOs Defend United-Continental Merger Plan (The Wall Street Journal)

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