A senator concerned that proposed airline
mergers could lessen competition suggested Wednesday that the
Justice Department delay reviewing the deals for nine months so it
can study their effect on prices.
The freeze would not apply to American Airlines' proposed
takeover of bankrupt TWA, which would save jobs and assets, said
Sen. Charles Schumer, D-N.Y. But it would cover United Airlines'
bid to obtain most of US Airways, and affect a Continental
Airlines-Delta Air Lines merger, which reportedly is under
If those combinations go ahead, the new carriers would control
three-fourths of the U.S. market.
"How in God's good name can having three airlines increase
competition?" said Sen. Charles Schumer, D-N.Y., who long has
complained about high airline prices in upstate New York.
At a Senate Judiciary Committee hearing on airline
consolidation, Schumer said he planned to send a letter to the
department's antitrust division asking for a nine-month moratorium
on its review of airline mergers until the department can
investigate their effect on ticket prices and flight schedules.
Several committee members already have asked the department to
study the issue, though they did not seek a moratorium.
One such lawmaker, Sen. Mike DeWine of Ohio, said that during a
hearing last year on the United-US Airways merger, "many of us
noted that the most troubling aspect was the likelihood it would
lead to further consolidation."
"Well, sure enough, here we are again, further proposed
consolidation and other major airlines considering their growth
options. I fear competition in the aviation market is at risk, and
the result of that could be higher ticket prices for consumers,"
said DeWine, Republican chairman of the Judiciary Subcommittee on
Antitrust, Business Rights and Competition.
Delta and Continental say they prefer to stay independent but
would consider a merger or alliance if competitors' combinations
"Approval of the transactions under consideration must be
viewed as tacit approval for those that follow," Delta's chief
executive officer, Leo Mullin, told the committee.
If all the mergers go ahead, the committee's top Democrat said,
the majority of the nation's air travel could be put at risk.
"The industry will be one work stoppage away from closing down
one-fourth to one-third of America's air system," said Sen.
Patrick Leahy of Vermont. "This prospect has become even more
frightening when you read in the papers these days about potential
labor strikes at four major airlines."
United, American and US Airways' chairmen said the mergers would
increase competition by letting them expand their routes.
"So what does United believe the net effect of our proposed
merger and these recent developments will be for consumers and
competition?" said United chairman James Goodwin. "We believe
domestic competition will be enhanced and consumer choice and
connivence will be improved."
Smaller carriers not involved in merger talks spoke against the
consolidations, saying the large airlines already had too much of a
stranglehold on the market.
"Unchecked and unmodified, the pending agreements will stifle
competition, raise fares and condemn hundreds of small and medium
size communities to limited and high-cost air service for years,"
said Joe Leonard, chief executive officer of Air Tran Airways.