press release
 

BTC Calls on U.S. DOT to Reopen China Route Case in Light of Airline Merger Discussions

Mechanism to Ensure Long-Term Competition in U.S-China Market Urged

RADNOR PA., December 14, 2006–The Business Travel Coalition (BTC) today wrote to U.S. Department of Transportation Secretary Mary Peters formally requesting that the Department reopen and extend the China route case proceeding to such time as the agency can fully consider the competitive ramifications of potential major airline merger proposals, in particular the reported potential merger discussions of United Airlines and Continental Airlines--two key applicants in this route proceeding. (See letter at http://btcweb.biz/statements/150.html.)

BTC chairman Kevin Mitchell stated, “If a United/Continental merger were to occur, and either airline were to be awarded the new China authorities, then the “new” United/Continental would command 42 weekly U.S.-China frequencies followed by Northwest Airlines with 21 frequencies and American Airlines with 7. In BTC’s view, such an outcome is inconceivable and would have dramatic negative impacts for business travelers in terms of sharply higher airfares and fewer service options.”

The Coalition wrote that in the regrettable possibility that the Department’s analysis is that these merger discussions and regulatory processes will take too long to forestall a China-case decision, BTC urges the Department to require the frequencies that would be awarded in this case to either United or Continental be returned for immediate reallocation in the event the two applicants announce a merger agreement.

In combination with the recently announced US Airways’ proposal to acquire Delta Air Lines, a potential merger between Continental and United would mandate that the DOJ and Congress shift from a one-off analysis of specific merger transactions and instead closely examine the full future construct for domestic U.S. and international commercial aviation marketplaces under a rapidly accelerating industry consolidation scenario. In other words, merger policy needs to be informed by the totality of competitive impacts from multiple mergers.