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Continental CEO Defends Merger Plan in Trial

On Behalf of | Sep 3, 2010 | Commercial Litigation |

The chief executive of Continental Airlines, Jeff Smisek, testified in a federal court Tuesday in defense of the company’s merger plan with United. Federal antitrust regulators approved the $8 billion merger plan late last week, but the companies still face other hurdles, including a recent lawsuit seeking to block the deal. The lawsuit was filed in a federal court in San Francisco and claims that a merger between United and Continental would create a monopoly, increase fares and reduce jobs.

According to the Los Angeles Times, the attorney representing the consumers who filed the lawsuit said that the merger would create monopolies in seven non-stop routes. Those routes include flights between San Francisco and Newark, New Jersey, as well as those between Denver and Newark. They also include flight routes between Denver and Cleveland and San Francisco and Houston.

According to the Times, the attorney representing the plaintiffs showed Smisek a copy of an internal Continental document, “Hub stats,” that showed what the merged companies’ flight networks would look like. The attorney asked Smisek about a 19 percent reduction of departures from Denver, or 37 flights.

Smisek, who would also head the combined companies, said that the document was based on projections made by Continental and not actual information from United. Smisek insisted during his testimony that the deal would increase the revenue of the companies and decrease their costs. 


Continental CEO defends merger with United in trial (Los Angeles Times)