On Friday, the Justice Department showed green flag to the proposed merger of Continental and United airlines. With the merger, the joint entity will become the world's biggest airline.
As stated by the Justice Department, in their investigation they found out that the airlines didn’t hinder the services of other airlines by overlapping the routes and, therefore, would not cause problems for consumers by employing monopolistic practices.
With the $3.17 billion worth of merger between the two airlines, the United States would have only four major traditional carriers and if American Airlines acquires US Airways, as predicted, the number will reduce to three, thus limiting the choice of airlines for consumers. The merged entity will be used by 144 million passengers who would be flying to 370 destinations in 59 countries and would bring revenue worth around $30 billion.
The reason to worry for the Justice Department was the merger leaving near to no competition at Newark Liberty Airport that was relieved by airlines agreeing to transfer their takeoff and landing slots at Newark to Southwest Airlines and, thus, posing an end to inquiry, as expressed by anti-trust regulators.
The merger has still to get sanction from the Companies’ shareholders, who will cast their vote next month. There is also a possibility that approval to the deal may be appealed against by lawmakers such as Rep. James Oberstar (D-Minn.), Chairman of the House Transportation and Infrastructure Committee, who opposed it earlier as well in June.
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