CONTINENTAL AIRLINES EXPLAINS HARMFUL EFFECTS OF PROPOSED AMERICAN AIRLINES-BRITISH AIRWAYS DEAL

Continental Airlines (NYSE: CAL) today testified that a proposed arrangement between American Airlines and British Airways would constitute a competitive stranglehold on the most important international routes in the world.

Continental stressed that the U.S. Department of Transportation should not follow a hasty process in reviewing the American Airlines-British Airways combination considering the severity of the issues it raises, and urged the U.S. government to protect air travelers and transatlantic competition by turning down the proposed transaction.

Continental President Larry Kellner testified before the Antitrust, Business Rights, and Competition Subcommittee of the Senate Committee on the Judiciary.

"To sum it up in one short sentence, the proposed American Airlines/British Airways antitrust immunized alliance is the wrong deal at the wrong time," Kellner said in his testimony.

"If American and British Airways are allowed to move forward with their 'merger,' it would have an even greater effect on concentration in the U.S.-U.K. market than would a merger here in the domestic market between American, United and Delta combined. The American/British Airways merger would also produce a level of seat concentration in the U.S.-U.K. market even greater than that of a merger between seven of the top ten domestic European airlines in the intra-European market," Kellner added.

In his testimony, Kellner pointed out that British Airways is already 65 percent larger than its next largest competitor between the U.S. and U.K. Combined, British Airways and American would dominate departures and would be almost 300 percent larger than the nearest competitor. Nearly 81 percent of all Heathrow passengers will have reduced or no competition.