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UNITED AIRLINES ASKS FOR A PUBLIC REVIEW BY DOT OF AIR CANADA'S PROPOSED $450 INVESTMENT IN CONTINENTAL AIRLINES

 CHICAGO, Feb. 4 /PRNewswire/ -- United Airlines today petitioned the U.S. Department of Transportation (DOT) to open a public docket in which to review Air Canada's proposed investment in Continental Airlines.
 United contends that the planned acquisition raises fundamental legal questions and significant aviation and trade policy issues affecting the competitive position of the U.S. aviation industry in the evolving global marketplace. Notwithstanding this, the prior Administration utilized non-public procedures to review the transaction and declined to take any action.
 "Issues of this magnitude should not be decided behind closed doors without giving affected parties the opportunities to analyze and comment on all pertinent information about the transaction," United argued. "To allow this transaction to proceed without a full public evaluation of the policy issues involved would set a precedent that will undermine the Clinton Administration's development of a sound policy on foreign investment in U.S. airlines."
 United cited these undesirable results of the prior Administration's approach:
 -- It provides Air Canada broad access to the U.S. market through an investment in Continental which it clearly intends actively to manage and control without having secured equivalent benefits in Canadian markets for U.S. airlines;
 -- It removes all incentives for the Government of Canada to enter into a liberal, open skies agreement with the United States;
 -- When coupled with American Airlines' planned investment in Canadian Airlines, the Air Canada/Continental acquisition establishes the framework for a highly duopolistic transborder market -- the United States' most important foreign air travel market -- for years to come.
 -- It denies United and other interested persons procedural due process rights protected under the Constitution and the Administrative Procedure Act.
 United pointed out that the Clinton Administration has indicated its intent to pursue an aviation policy rooted in equal access to foreign markets for U.S. airlines.
 Canada is the United States' largest aviation trading partner. Nonetheless, United noted, U.S. airlines are largely excluded from the transborder market as a result of the protectionist aviation bilateral agreement the U.S. is forced to maintain with Canada. For instance, other than some small commuter operators, no major carrier is allowed to provide service between the two nations' capitals, Washington, D.C., and Ottawa.
 "Despite repeated efforts by the U.S. over the past 20 years to liberalize this agreement, the Canadians have steadfastly insisted upon insulating their carriers from U.S.-flag competition.
 "If, as (DOT) Secretary Pena has indicated, the touchstone of U.S. policy on active investment in U.S. airlines by foreign carriers is to be equal access for U.S. carriers to foreign markets, Air Canada should not be permitted to invest in Continental until a liberal, open skies agreement, including equipment investment opportunities, with Canada is concluded," United said.
 -0- 2/4/93
 /CONTACT: Joe Hopkins, corporate communications, 708-952-5770, or


night 708-952-4088, or Pamela Hanlon, investor relations, 708-952-7501, both of United Airlines/
 (UAL)


CO: United Airlines ST: Illinois IN: AIR SU:

LD -- NY130 -- 3243 02/04/93 17:50 EST
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Publication:PR Newswire
Date:Feb 4, 1993
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