Continental and United Airlines Merger Cleared by US-DOJ

The aviation industry is poised to meet the largest airline that will take flight as early as next month, as the US Department of Justice has approved the proposed US$3 billion unification of Continental Airlines and United Airlines.

The DOJ approval has made the two airlines surrender slots for 18 daily flights from New York’s Newark airport, which will be given to low-cost carrier Southwest.

The final impediment that the development is facing is the shareholder’s approval on the joining of the two prominent airlines at a meeting next month.

United Airlines, founded by Star Alliance, currently operates 3,400 daily flights to 230 destinations and has a workforce of 46,000, while Continental manages more than 2,700 daily departures serving almost 170 destinations and has over 40,000 employees.

The US Justice Department said: “The transfer of slots and other assets at Newark resolves the department’s principal competition concerns and will likely significantly benefit consumers on overlap routes.”

The big move of the two prominent airlines is just one of the merger schemes in the aviation industry.

British Airways is in the process of merging with Spanish carrier Iberia and forming a transatlantic partnership with American Airlines, which involved information sharing on air fare prices, routes, and schedules, allowing the airlines to cut costs.

However, the union between the airline companies has ignited concerns over competition issues. Virgin Atlantic has argued that the aforementioned alliance will mean an inevitable increase in fares and that its ability to stay being independent will be strictly impaired.

Due to the criticisms and arguments, the BA/AA tie-up voluntarily gave-up airport slots and routes.

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