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Politics Of Airlines Mergers


House panel chairman vows to fight airline mergers, hold hearings

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Jan 29, 2008

The Democratic chairman of a key House committee pledged a vigorous effort to slow or stop, if possible, a proposed merger between Delta Air Lines Inc. (DAL) and rival carriers Northwest Airlines Corp. (NWA) and United Airlines.

After a subcommittee chairman at a press conference promised hearings to review airline mergers, House Transportation and Infrastructure Chairman James Oberstar, D-Minn., said: "He was very polite on mergers - Hell, no!"

Besides holding hearings, Oberstar said he will pressure the Justice Department and Transportation Department to use their powers to aggressively investigate anti-trust and other implications of any merger.

But he acknowledged that he might not get as aggressive response from the Bush administration as Oberstar would want. "The Justice Department has been sporadic on this matter of mergers and the public interest," he said.

Oberstar predicted that a successful merger between Delta and either Northwest or United would trigger a "domino effect" of airline consolidation. "We could have in a very short period of time, two or three major global carriers," he said.

Delta has opened talks with both United and Northwest about a potential merger, but those talks are in the early stages.

Oberstar said he opposes any mergers in the airline industry because, he claimed, they will reduce consumer choices, raise fare prices, and result in less service to remote areas. In the hub-and-spoke system of today's airlines, he said, "the communities at the furthest end of the spokes are the ones that are left out and left behind."

Rep. Jerry Costello, D-Ill., who chairs the Aviation subcommittee of the House Transportation and Infrastructure Committee, said he will hold hearings to " examine the terms and agreements of any merger" if such a deal develops "beyond the rumor and discussion stage.

Costello also said his panel will hold a hearing early this year on improving runway safety, in the wake of recent runway incursions.

money.cnn.com

House panel chairman vows to fight airline mergers, hold hearings



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