The US Justice Department greenlighted the planned merger of United Airlines and Continental Airlines on Friday, paving the way for the creation of the world's biggest airline. In a statement, the Justice Department said it was satisfied that the airlines did not have so much overlap in their routes that consumers would be harmed by higher prices and limited flight choices. “The department has closed its investigation into the proposed merger of UAL Corporation, the parent of United, and Continental,” the DoJ said. The DOJ ended its probe after the companies agreed to lease landing and takeoff rights at Newark International Airport in New Jersey to Southwest Airlines to avoid anti trust concerns. “The department conducted a thorough investigation,” it added in a release that came one month after European regulators cleared the way for the merger, now expected to take place by Oct. 1. Shareholders must still vote on the plan. Both companies have scheduled special stockholder meetings on Sept. 17, they said in a joint statement issued late Friday. “We are pleased to have achieved this critical milestone and look forward to our respective stockholders' votes next month, following which we expect to be on track to close our merger by October 1st,” said Glenn Tilton, UAL Corporation chairman, president and CEO. Continental's chairman, president and CEO Jeff Smisek said the Justice Department's decision “is an important step on our journey of creating the world's leading airline” and “permits us to clear one of the last regulatory hurdles to closing our merger.” The new airline will fly under the United Airlines name and will hold around seven percent of global airline capacity. It has a market value pegged at around $6.75 billion (5.2 billion euros). The new airline will serve more than 144 million passengers per year with 370 destinations in 59 countries. The two boards are hoping to generate combined annual savings and new revenues of up to $1.2 billion by 2013. United and Continental both had a turnover of more than $3 billion in 2009 but each reported losses. The deal follows Delta's 2008 takeover of Northwest and a British Airways tie-up with with Spanish carrier Iberia to avoid being sidelined by European rivals Air France-KLM and Lufthansa. The merged giant will maintain United's base in Chicago as its headquarters. The combination of the country's third and fourth biggest airlines means the number of industry players - and options for fliers - continues to shrink. Upon completion, the proposed $3.17 billion merger will leave just four traditional carriers in the US, and possibly three if American Airlines responds by bidding for US Airways, as some analysts predict. Antitrust regulators said their chief concern about the deal was that there could be too little competition at Newark Liberty Airport, where Continental has a hub. The airlines agreed to transfer their takeoff and landing slots at Newark to Southwest Airlines, allaying government's concerns and prompting the department to close its investigation. “Southwest is the type of firm that all antitrust regulators and consumer both adore, because they are very aggressive at lowering prices and providing better service,” said David Balto, a senior fellow at the Center for American Progress.
