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United Continental Merger Wins OKAugust 30, 2010 By: Melanie Gretchen, George Dooley
The Department of Justice (DOJ) has approved the merger of Continental and United Airlines to create the world's largest airline and a new era for U.S. air carriers. The European Commission approved the merger earlier. The new company will be called United Continental Holdings. Together, Continental and United serve more than 144 million passengers per year and fly to 370 destinations in 59 countries. Both airlines provided domestic and international passenger and freight services.
The DOJ approval came after an agreement by United and Continental to give 18 slots and other assets at Newark Liberty Airport to Southwest Airlines, beginning in late March 2011 and fully implemented in June 2011. “The department has closed its investigation into the proposed merger of UAL Corporation, the parent of United and Continental,” the DOJ announced. “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 transfer of slots and other assets at Newark to Southwest, a low-cost carrier that currently has only limited service in the NewYork 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 DOJ said.
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.
Continental Airlines, based in Houston, is the fourth largest carrier in the United States by revenue. In 2009, it collected $12.6 billion in revenue carrying approximately 67 million passengers. Continental and its regional affiliates offer service to 265 destinations in the United States and over 50 other countries throughout the world.
Southwest Airlines, based in Dallas, is the sixth largest carrier in the United States by revenue. In 2009, it collected $10.4 billion in revenue carrying approximately 86 million passengers. Southwest serves 69 cities in the United States.