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Airline Mergers Not Likely to Face Antitrust Hurdles

April 16, 2008

Mark Ostrau, Co-Chair of the Antitrust and Unfair Competition Group at Fenwick & West LLP was recently quoted in a Los Angeles Times article entitled "2 More Carriers Consider Merging."

Continental Airlines Inc. and UAL Corp.'s United Airlines gave strong signals Tuesday that they would consider a merger, either together or with other carriers, raising the prospect of another big airline deal. A combination of the two would create an even larger airline behemoth than Monday's proposed joining of Delta Air Lines Inc. and Northwest Airlines Corp., and could drastically alter the industry's competitive landscape.

Although some lawmakers may intensely scrutinize the deal, financial analysts said, Congress can do little to block it. They predicted that the combination would win approval from the Bush administration by the end of the year. The marriage needs the approval of the Justice Department, which could block the deal if it found that the combination was anti-competitive.

"It's not likely to be a problem," said Ostrau. He said the Justice Department might find a few smaller airports where the new airline might dominate, but "they are not likely to be enough to raise competitive concerns."