Earlier this month United Airlines and Continental Airlines announced a merger agreement which, if approved by the Justice Department, would create a single carrier called United Airlines that would serve more than 144 million passengers a year flying to 370 destinations in 59 countries. United and Continental are also members of Star Alliance, the world's largest global airline network, an arrangement that allows them to coordinate international routes, ticketing, frequent flyer programs and other services with the alliance's 25 other members.
Advocates of consolidation say it strengthens the airlines' financial position in the face of competition from low-cost airlines, volatile fuel prices and excess carrying capacity. The two airlines promised in a joint press release that the deal would mean "more and better scheduled service and destinations for customers."
But critics such as House Transportation and Infrastructure Committee Chairman James Oberstar, D-Minn., warn of just the opposite. In a May 5 letter to the Justice Department, Oberstar predicted, "If allowed to proceed, this merger will move the country far down the path of an airline system dominated by three mega-carriers," referring to the 2008 purchase of Northwest Airlines by Delta, the proposed merger of United and Continental, and the possibility that American Airlines would respond by merging with another airline, such as US Airways. "There will be strong incentives to refrain from competition. There will be less service and fares will rise," Oberstar wrote.
What do you think of the proposed merger? Will it benefit the two airlines? What about customers and the airline industry as a whole? Should the Justice Department approve it?