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Senators urge scrutiny of American Airlines and US Airways merger

June 18, 2013|By Hugo Martin
  • A merger between US Airways and American Airlines would cut competition on 12 non-stop routes and on 1,665 other routes with at least one stop, the U.S. Government Accountability Office said.
A merger between US Airways and American Airlines would cut competition… (Jim Watson / AFP/Getty Images )

On the eve of a Senate hearing on airline mergers, two senators are urging the Obama administration to carefully scrutinize the proposed merger of American Airlines and US Airways.

The merger, expected to close by September, would unite the third and fifth largest carriers, creating the country's biggest airline by total passengers served.

Once completed, the nation's four largest airlines would control about 70% of the national market.

In a letter to Atty. Gen. Eric H. Holder Jr. and Transportation Secretary Ray LaHood, Sens. Amy Klobuchar (D-Minn.) and Mike Lee (R-Utah) urged the administration to make sure that the proposed merger does not rob consumers of reasonable fares and plenty of choices in airlines.

"Consolidation within the airline industry carries with it risks to consumer welfare that must be carefully considered," according to the letter.

On Wednesday, the Senate Commerce Committee will hold a hearing on airline consolidation issues.

Klobuchar is the chair of the Judiciary Antitrust Subcommittee, and Lee is the ranking member.

"We need to make sure consumers have as many choices as possible at the lowest prices, and that no airline or small group of airlines has a stranglehold on the market,” Klobuchar said in a statement.

American Airlines' parent company, AMR Corp., filed for bankruptcy in 2011 and now plans to emerge from its financial dilemma by joining forces with US Airways.

In the letter, the senators also point out that after the merger, the combined airline would control 70% of the passenger gates at Ronald Reagan Washington National Airport.

They suggest that the Department of Justice and the Department of Transportation consider making the newly merged airline give up some of its gates at Reagan National as a condition of federal antitrust approval.

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