Airline CEOs defend merger before Senate panelPosted: Updated:
The CEOs of American Airlines and US Airways reassured a Senate panel Tuesday that their merger would not lead to fewer flights or lost jobs in the lawmakers' states.
The merger would create the world's biggest airline and provide more competition for United and Delta, the CEOs said.
But consumer advocates told the Senate antitrust subcommittee that the merger would lead to higher fares and less service to midsize cities.
Diana Moss of the American Antitrust Institute said American and US Airways want to compete with giant global airlines. "I understand that - that's where the business is going and that's where the dollars are," she said. "But we have to find a way not to sacrifice U.S. consumers on the altar of global competition."
Regulators allowed mergers of Delta and Northwest, United and Continental, and Southwest and AirTran, and most analysts expect the American-US Airways deal also will be approved. Reflecting that sense of inevitability, the senators focused their questions on how the deal would affect constituents back home.
Sen. Charles Schumer, D-N.Y., extracted promises that airline jobs in New York would be safe. Sen. Richard Blumenthal, D-Conn., asked if the airlines would continue flying to Bradley International and Tweed New Haven airports in his state.
US Airways Group Inc. CEO Doug Parker, who will lead the combined airline after the merger, assured Blumenthal that flights would continue to Connecticut, but he acknowledged that other airline executives have not always honored similar promises in the past.
Parker also left himself some wiggle room - service could be cut back "because of market conditions" or an increase in jet fuel prices. But that would be true even without a merger, he added.
Together American and US Airways would control a majority of takeoff and landing slots at Washington's Reagan National Airport, the hometown airport for members of Congress. Parker said, however, that the airlines should not be forced to give up any of those slots. If they are, he said, they'll have to drop service from Washington to some other cities.
Parker was joined at the hearing by Tom Horton, CEO of American Airlines parent AMR Corp.
American, the nation's third-biggest airline, and US Airways, the fifth-biggest, announced their proposed merger last month. The combined company would keep the American Airlines name and Fort Worth, Texas, headquarters. The deal is subject to approval by the Justice Department, the judge overseeing AMR's bankruptcy case, and shareholders of both companies.
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