Continental Airlines (NYSE: CAL and CAL.A)
today said that air travelers are the winners in a Federal District Court
decision that finds that United Airlines conspired with other carriers to
violate federal antitrust laws by agreeing to install baggage sizing templates
at security screening checkpoints at Washington/Dulles International Airport.
“The big winner today is the traveling public,” said Gordon Bethune,
Continental chairman and CEO. “Travelers choosing Continental now can enjoy a
level of superior customer service not offered by our competitors.”
The decision shows that customer service is a critical component of
airline competition. A group of airlines acting in a conspiracy cannot impose
their lower service standards on other airlines that want to compete for
customers by offering higher service standards.
As the Court said in its opinion, “Indeed, if there is any proof of
failure in the market to be gleaned from the record, it is of United`s failure
to provide what its customers desire.”
Continental, as a result of listening to its customers, has friendlier
carry-on baggage policies that are flexible and do not use mandatory templates
to restrict customers` bags at security screening checkpoints.
In addition, Continental has spent millions of dollars retrofitting its
fleet and billions of dollars purchasing new aircraft with larger overhead
Continental said the decision sends a strong message in the context of
current efforts by the nation`s largest carriers to get even bigger by
acquiring smaller airlines.
“In the airline industry, bigger is not always better,” a Continental
spokesperson said. “Even though the number of airline travelers is
consistently growing, we need to remember that each traveler has
individualized needs and expectations that need to be addressed by
professional service personnel. Baggage sizers are an example of a big
airline`s effort to `herd` passengers through a cattle chute because they
can`t effectively respond to customers as individuals.”
The Court said that Continental is entitled to an injunction regarding the
use of templates at Dulles and that an order will be forthcoming. The Court
is expected to determine damages, which will be trebled under applicable
antitrust law, separately at a later date.