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[[stamp]]
21 0170964 5592H05030S27
CAPT E GARGES - JR
142 MILL SPRING RD
MANHASSET NY 11030
FIGHT ASTHMA
[[/stamp]]

UNITED STATES OF AMERICA
CIVIL AERONAUTICS BOARD
WASHINGTON, D.C.

E-9945
E-9946

Served: January 26, 1956

DOCKET NO. 66998
COLONIAL-EASTERN ACQUISITION CASE

Decided: January 11, 1956

The acquisition of the assets of Colonial Airlines by Eastern Air Lines, is found to be consistent with the public interest. Such acquisition will not result in a monopoly and thereby restrain competition or jeopardize another air carrier not a party to the transaction. The consideration provided by the acquisition agreement, consisting of the exchange of one share of Eastern's stock for two of Colonial's, is found not to be unreasonable.

The fact that Eastern had unlawfully acquired control of Colonial in the past is not considered to be a bar to approval of the new acquisition agreement, since such unlawful control had been terminated prior to the making of the new agreement which was the result of arm's length bargaining.

The Board approves the Eastern-Colonial acquisition agreement subject to the conditions: (a) that for rate-making purposes, the assets taken over by Eastern should be entered on Eastern's books at the book value of such assets as of the date of the transfer, and (b) that such agreement shall be subject to the labor protective provisions prescribed in the Slick-Flying Tiger Merger Case.

APPEARANCES:

E. Smythe Cambrell, Harold L. Russell, Glen Harlan, and Terry McKenna for Eastern Air Lines, Inc.

Edward A. Silliere and L. Orville Cameron for Colonial Airlines, Inc.

Alexander G. Hardy, John W. Cross, and Richard A. Fitzgerald for National Airlines, Inc.

Edward J. Hickey, Jr., and William G. Mahoney for the International Association of Machinists.

Ralph L. Harkenrider and Selwyn Coleman for Air Line Pilots Association, International.

Edward Knapp and David Hoxie for Vermont Aeronautics Commission.

Albert H. Ruppar for Bureau Counsel