US Panel Seeks Answers On UAL/CAL Merger

May 26, 2010(Reuters)

United Airlines and Continental Airlines should provide more information about their merger to a US congressional committee concerned about possible jobs and service cuts, key lawmakers said.

House of Representatives Judiciary Committee Chairman John Conyers and competition subcommittee Chairman Henry Johnson said on Wednesday the companies’ written responses failed to answer key questions raised by the panel.

The two Democrats said United and Continental did not provide specific information about possible job reductions related to the merger to create the world’s biggest airline.

The airlines told the panel that they expect few layoffs from the integration of 87,000 employees and carrier operations due to the fact that there are few overlapping routes and no common hubs.

The lawmakers also said the companies “failed to provide sufficient assurances” about service, refusing a committee request to commit to retaining all of their hubs.

United and Continental told the panel that such a promise would not allow proper flexibility to make business decisions, the lawmakers said.

The new airline, to be called United and based in Chicago, will be positioned as a stronger entity with an unmatched global reach, experts said.

United said in a statement it was “respectful of the process” but that it would be “inappropriate for two separate companies to provide the answers they are seeking.”

Houston-based Continental said in a separate response it plans to further address the committee’s concerns at next month’s scheduled hearing on the merger.

The Judiciary Committee has oversight of the Justice Department, including its antitrust division, whose job is to review the merger’s impact on competition.

United chief executive Glenn Tilton and Continental chief executive Jeff Smisek, will testify before US Senate antitrust and commerce panels on Thursday.

Continental’s Smisek will lead the new airline.

Antitrust experts, analysts and industry consultants see few if any regulatory problems and widely anticipate government approval of the deal.

Tilton told reporters on Tuesday that he is “very optimistic” the carriers will be able to satisfy any concerns raised by Justice Department antitrust officials by year’s end.

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