Late Friday afternoon The Justice Department, in record time cleared the last major federal hurdle concerning the $3 billion merger of United Airlines and Continental. The Justice Department reviewed the potential merger for potential anti-trust issues. The result of the review, Continental will lease 18 pairs of takeoff and landing slots at Newark Airport (a major hub for Continental) to Southwest Airlines to alleviate competition concerns.
During the investigation the East Coast hubs of both airlines were considered the one major issue concerning competition and antitrust. United has a hub at Washington Dulles and extensive trans-cotinental and international service at New York’s Kennedy Airport. As mentioned, Continental has a major national/international hub at Newark (Newark serves New York City and the Tri-State area with national and International service).
The merger of the two airlines should be completed by October 1, 2010 after a shareholder vote on September 17th. Based on stock price and activity, the vote should be a perfunctory matter. The new holding company for the merged airline will be called United Continental Holding Inc. The airline would operate as two separate airlines for a year until the Federal Aviation Administration (FAA) issues a single operating certificate.
As mentioned in previous articles, the effect in Denver to date has been negligible. Both airlines had implemented code-share agreements when Continental joined The Star Alliance. Prior to the construction of Denver International Airport, Continental operated a hub from Denver’s former Stapleton Airport and was provided the premier gates on Concourse A at Denver International before deciding to close their hub operations in Denver leaving United Airlines as the dominant airline at DIA.
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