Justice Dept. Clears Way For Continental-United Merger

The marriage between Continental and United Airlines got one huge step closer to happening on Friday when investigators at the Justice Department wrapped up their four-month inquiry into the merger and offered its blessing.

With this hurdle out of the way, it’s possible that the union could be finalized by Oct. 1. All that remains is final approval form the Dept. of Transportation and the airlines’ stockholders.

The DOJ’s investigation found that the two airlines have “largely complementary networks” with little overlap on nonstop routes. However, the regulators did express concern that the airlines’ combined 442 daily round-trip flights out of Newark Liberty International Airport — where Continental already controls more than 60% of air travel — could be too overwhelming a presence at the airport.

So to get the wheels of Justice rolling on the deal, the two airlines agreed to lease 18 slots for round-trip flights at Newark to Southwest Airlines. The idea is that this would give consumers a low-cost option at Newark and give the discount airline a second airport presence in the NYC metro area. If the merger is completed by Nov. 30, Southwest would begin having access to those slots in March 2011.

Some insiders are not impressed with what they believe is a small concession on the part of Continental-United. “I find 18 slots to be a remarkably small amount of grease to get this thing approved,” aviation consultant Robert Mann tells the Chicago Tribune, “when you consider the Continental-United position at Newark.”

Regulators clear United-Continental merger for takeoff [Chicago Tribune]