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EU Says Yes To Merger Between Continental and United
July 27, 2010
by: David Pitman
The proposed merger between Continental and United Airlines cleared another hurdle today. The European commission unanimously approved the plan for Houston based Continental to join forces with United. But, as David Pitman reports, the blessing from the EU will not necessarily mean a rubber stamp from anti-trust regulators here in the states.
Darren Bush is an associate professor of law at the University of Houston. He says he expected the European Commission to scrutinize the merger more than it apparently did. But he's not surprised the Commission signed off on it, given that neither Continental nor United directly compete with short-haul carriers inside the EU.
"We're basically talking about origins and destinations in Europe coming from the United States. And that's where the areas of overlap are. And since they're already in alliance, I can imagine the European Union wasn't as concerned about those issues."
Bush used to work in the anti-trust section of the Department of Justice that reviews mergers like this one. He says the DOJ will be concerned more than the Europeans were about the overlap between the two carriers in their hub cities.
"Also concerned about people who are not living in hub cities trying to get reasonable connections at reasonable fares. And the fewer competitors you have, the greater chances you're going to face what anti-trust enforcers call 'monopoly power'".
Both Continental and United say they will continue to work cooperatively with the Department of Justice in completing the merger, which the two companies hope to close sometime in the fourth quarter of the year.