World’s largest airline cleared for take-off

World’s largest airline cleared for take-off

The US Department of Justice has approved the proposed US$3bn merger of Continental Airlines and United Airlines, in a move that is poised to create the world’s largest airline as early as next month.

To get permission the airlines have agreed to surrender slots for 18 daily flights from New York’s Newark airport. These will be given to low-cost carrier Southwest.
The final hurdle is for shareholders to approve the merger of the two airlines at a meeting next month.

Star Alliance founder United operates 3,400 daily flights to 230 destinations and has a workforce of 46,000 staff.

Continental has 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.”

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The new mega airline is just one of number of mergers that are in the pipeline.

British Airways is currently merging with Spanish flag carrier Iberia, as well as forming a transatlantic tie-up with American Airlines, which will involve sharing information on ticket prices, routes and schedules, allowing the airlines to cut costs.

The consolidation within the sector has sparked concerns over competition issues, with Virgin Atlantic has argued that the BA/AA tie-up will mean an inevitable increase in fares, and that its ability to remain independent will be severely impaired.

However, some of the criticisms have been softened by the airlines voluntarily giving up airport slots and routes.