(CLEVELAND) — Ohio Attorney General Richard Cordray and Cleveland Mayor Frank G. Jackson today announced a binding agreement with Continental and United Airlines that protects the interests of Ohioans as the two airlines prepare to merge into one company. As a result of Ohio's four-month antitrust investigation into the pending merger, this agreement secures the commitment of the merged airline to Cleveland Hopkins International Airport (CLE), a Continental hub, for at least the next five years.
"I am confident that this resolution is the best possible outcome for Cleveland and the state of Ohio," said Cordray. "Through this contractual agreement, the airlines have committed to working with my office and the City of Cleveland to ensure that CLE remains a viable hub for the foreseeable future. Moving forward, my office will continue working with Mayor Jackson and his airport staff to closely monitor the merged company and its commitment to the success of Cleveland's airport."
"The agreement between Continental-United Airlines and the Ohio Attorney General solidifies the new United's commitment to maintain current service levels at Cleveland Hopkins International Airport," said Mayor Jackson. "The agreement places the CLE hub in a stronger position than it was a month ago. I would like to thank the Attorney General for the opportunity for me and my team to participate in the discussions that led to this agreement. As we move forward, we will continue to take aggressive steps to strengthen CLE's ability to respond to whatever happens in the industry."
The terms of the agreement ensure that:
The merged airline remains operational and maintains jobs at Cleveland Hopkins for at least the next five years.
The Attorney General may, at the company's expense, audit the books and records of the company to make certain that the airline's commitments to Cleveland and Ohio consumers are upheld.
The airline's commitments are enforceable in federal court in Ohio.
Damages of up to $20 million will be paid by the airline should its commitments not be honored.
"This is an important air service development for CLE. The agreement formalizes the new United's commitment to the region based on support for the hub," said Airport Director Ricky Smith. "Furthermore, this commitment represents a significant step in strengthening CLE's position as an economic engine for airport tenants and airlines as well as area businesses. We will continue building on the agreement by developing new strategies for growing the hub and strengthening the CLE's economic position."
Continental Airlines employs more than 2,000 workers at CLE with 1,000 others employed by its regional airline partners. Continental has 170 daily departures from CLE. In 2009, Continental's passengers comprised 65.2% of the total CLE passenger base, with United accounting for 5.4% of CLE's passengers. CLE offers more than 260 daily non-stop flights to over 70 destinations including six international markets. In 2009, CLE handled 9.7 million passengers, averaging more than 26,000 daily, making CLE the nation's 35th busiest airport. Cleveland Hopkins, Ohio's largest airport, relies on Continental for two-thirds of its flights.
Today's agreement concludes Attorney General Cordray's review of the proposed merger of Continental and United. Through the investigation, which was launched in May, Cordray sought to protect Ohio jobs and the economic interests of the city of Cleveland, Cleveland Hopkins International Airport, and Ohio consumers. At the time, Cordray noted that the $3.2 billion merger could have a resounding impact on the state and nation, but particularly on Cleveland.
Any merger scenario involving Continental would create anxiety in Cleveland, where the airline's hub at Cleveland Hopkins International Airport employs more than 3,000 people.
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