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Senate panel hears debate on American and US Airways merger

March 19, 2013|By Hugo Martin
  • A merger between US Airways and American Airlines would lead to higher fairs, critics of the proposed deal say. Proponents say it would improve service and protect jobs.
A merger between US Airways and American Airlines would lead to higher fairs,… (Jim Watson / AFP / Getty Images )

The proposed merger of American Airlines and US Airways will reduce competition and lead to higher fares, critics of the union argued before a U.S. Senate panel Tuesday.

But supporters of the merger said the creation of the nation's largest airline will improve service and protect the jobs of hundreds of airlines workers.

The testimony came Tuesday before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights.

The merger, which was announced last month, must still get approval of the U.S. Department of Justice and the judge overseeing the bankruptcy proceeding of AMR Corp., the parent company of American Airlines.

Sen. Mike Lee (R-Utah), the ranking member of the panel, noted that the newly merged airline would control nearly 70% of the passenger gates at Ronald Reagan Washington National Airport.

“With each mega-merger in the airline industry, we’ve been told competition will be enhanced and consumers will be better served, and each time this has not happened,” said William J. McGee, travel and aviation consultant for Consumers Union, the advocacy arm for Consumer Reports.

Thomas Horton, chief executive of American Airlines, and Doug Parker, chief executive of US Airways, said the new airline will offer passengers better service with more travel options.

"By combining American and US Airways, the new American Airlines will build the network that passengers have told us they want, one that will compete more effectively with the other networks airlines, as well as low-cost carriers," Parker told the committee.

Officials from the two airlines have not predicted how long it would take to complete the merger but previous airline mergers have taken several years.

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