MY 17, 2010
The announcement earlier this month that United Airlines and Continental Airlines will merge continues a trend of consolidation in the airline industry.
With two major carriers joining forces, what will be the impact on consumers? Will there be fewer flights and higher ticket prices? Several state attorneys general are asking those questions.
A number of states have announced plans to jointly review the proposed merger to ensure that consumers won't be adversely affected.
Ohio Attorney General Richard Cordray, who will lead the multi-state review, noted that the $3.2 billion proposed deal to combine the third and fourth largest airlines in the United States could have a huge impact.
A merger this large may have staggering ramifications for the industry, for consumers, and for the broader economy, Cordray said. Ohio has a lot on the line with this deal. Cleveland is a Continental hub, which is very important both for our states travelers and economy. I feel strongly that it is in the best interest of Ohioans for us to take a leading role in reviewing this proposed deal. We will work closely with other states and the Department of Justice to ensure that state and federal antitrust laws are not violated.
Cordray said that the review will focus on ensuring that competition is not reduced through higher fares, fewer choices in flights or a drop in service quality. He also wants to make sure Cleveland Hopkins International Airport remains a viable hub.
With all the problems for taxpayers associated with corporations that become too big to fail, we need to be especially diligent as antitrust enforcers in looking carefully at the potential effects of consolidation in critical sectors of our economy, such as the airline industry, Cordray said.
Cordray co-chairs the National Association of Attorneys General antitrust committee, which addresses issues of federal/state cooperation and areas of common interest regarding antitrust enforcement, including multi-state litigation and federal/state legislative and policy proposals.