Posted on May - 01 - 2010
Cleveland’s mayor looks to protect city’s interest in Continental-United merger
Cleveland Mayor Frank Jackson hopes to work amicably with Continental Airlines as it merges with United Airlines. But the mayor said his first priority is protecting the level of air service that passes through Cleveland Hopkins International Airport and the jobs of the people who work there.
At a news conference this morning at City Hall, Mayor Jackson said he spoke Sunday night with Continental CEO Jeffery Smisek and that Mr. Smisek has agreed to meet with him soon to discuss Hopkins’ role in the merged airline.
“We will protect our interests,” Mayor Jackson said. “Even though we have had a great relationship (with Continental) over the years, it is business and we will be looking out for our interests.”
Mayor Jackson was joined at the news conference by U.S. Sen. Sherrod Brown, U.S. Rep. Dennis Kucinich and Cleveland City Council president Martin Sweeney.
In his conversation with the Continental CEO, Mayor Jackson said Mr. Smisek was not discouraging about Cleveland Hopkins’ role in the future merged United.
“He was willing to have a conversation about Cleveland in the new structure,” the mayor said.
Mayor Jackson said he has asked Ricky Smith, director of the city’s Department of Port Control, which oversees Cleveland’s airports, to convene an advisory panel of air service, financial, legal and regulatory experts to help him decide how to proceed as the merger unfolds.
Rep. Kucinich was less conciliatory than the mayor. The congressman said that as chairman of the Domestic Policy subcommittee of the House Committee on Oversight and Government Reform, he has broad investigative authority.
“Continental Airlines and United Airlines are going to have to give this community assurances if they want to forestall a full-scale assault using the antitrust laws,” he said, invoking the spector of Chapter 7 of the Clayton Anti-Trust Act, which addresses anti-competitive mergers.
Sen. Brown said he has spoken to both federal Transportation Secretary Raymond LaHood and Attorney General Eric Holder as the Continental-United merger has unfolded over the past month, raising questions about the regulatory and antitrust implications of such a merger.
The mayor and Mr. Smith both believe Hopkins has advantages that will be attractive to the merged airline. It has room to grow and lacks the congestion that can flight delays at Newark Liberty International Airport and Chicago’s O’Hare International Airport — the two major Northeast hubs of the new airline.
When airlines merge, they often cut flights and trim back on their networks of hub airports. Being a hub has been an advantage to Cleveland, particularly to business people who benefit by more frequent direct flights to their destinations.
Hopkins, long a hub for Continental, would become the smallest of 10 hubs in the merged airline’s system. Airlines such as Continental and United use hub and spoke systems, with hub airports serving as transfer points to passengers traveling between airports that lack direct service between them.
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