Copyright 2000 eMediaMillWorks, Inc.
(f/k/a Federal
Document Clearing House, Inc.)
Federal Document Clearing House
Congressional Testimony
July 10, 2000, Monday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 2200 words
COMMITTEE:
SENATE JUDICIARY
SUBCOMMITTEE:
ANTITRUST, BUSINESS RIGHTS AND COMPETITION
HEADLINE:
TESTIMONY UNITED AIRLINES--U.S. AIRWAYS MERGER
TESTIMONY-BY: TONY FRATTO , VICE PRESIDENT, GOVERNMENT
AFFAIRS
AFFILIATION: PITTSBURGH REGIONAL ALLIANCE
BODY:
July 10, 2000 Statement Of Tony Fratto Vice
President, Government Affairs Pittsburgh Regional Alliance Before the Committee
on the Judiciary Subcommittee on Antitrust, Business Rights, and Competition
United States Senate (Field Hearing) Allegheny County Courthouse Pittsburgh, PA
Good Afternoon Chairman Specter and Senator Santorum. My name is Tony Fratto and
I am the Vice-President of Government Affairs for the Pittsburgh Regional
Alliance. Thank you for giving me this opportunity today to address concerns
related to the proposed merger of US Airways and United
Airlines. I also would like to thank you both for your sincere and
persistent attention to economic development issues affecting our region.
Whether there is a crisis or an opportunity, we have never had to knock on your
doors, because your doors have always been open to us. Also, the leadership of
Allegheny County Chief Executive Jim Roddey has been instrumental in dealing
with this issue. We could not be more pleased with his energetic and thoughtful
representation of our interests and we stand enthusiastically with him. As you
know, I represent the Pittsburgh Regional Alliance - the prime business
attraction and marketing group in the Pittsburgh region; the Greater Pittsburgh
Chamber of Commerce - our chief business advocacy group; the Pittsburgh
Technology Council - the largest regional technology trade group in the nation;
and the Allegheny Conference on Community Development - the leading corporate
civic group in our region. By extension I also represent other pro-business,
economic development groups in Southwestern Pennsylvania. In fact, as a shared
employee of these groups, I am in a unique position to outline the concerns of
the business community and the greater economic development community in our
region. The health of Pittsburgh International Airport is vital to the business
and economic development interests of Southwestern Pennsylvania. The airport
provides important links for our business community and jobs for thousands of
families. For hundreds of thousands of air passengers every year, the airport
provides the first - and often the only - window into this wonderful region of
ours. Clearly, for the business and economic development communities of
Southwestern Pennsylvania, I should be clear in noting that no group I represent
has taken a formal position either in support or in opposition to the proposed
merger of these airlines. However, as you can imagine, news of
the merger has sparked significant discussion and debate. At
this time, each group is in the process of gathering information, educating
boards and membership, and analyzing key data. These groups can be expected to
take formal positions in the near future. However, in discussions of the
merger, agreement is clear on certain significant points that I
am pleased to outline for you today: The prospect of increasing the number of
direct and one-stop flights to domestic and international destinations from
Pittsburgh International Airport presents a significant opportunity for our
region. Even in the "New Economy" there is no substitute for efficient person to
person contact in the business world. Our business community places great value
on the ability to fly to key destinations. Our recent prolonged, but successful,
fight to reinstate a direct Pittsburgh to London route is an excellent example
of the importance we place on flight access. The proposed
merger is expected to result in significant new flight
opportunities - including destinations of high interest to the high tech
community like San Jose, CA; Portland, OR; and Asia. We strongly support
increased destinations and encourage our political leaders not to ignore the
tangible benefits of these assets. The maintenance and expansion of "hub" status
for Pittsburgh International Airport is essential to our economic development
efforts. While there are costs as well as benefits associated with hub airports,
we all agree that the benefits outweigh the costs and stand strongly in support
of retaining this status for Pittsburgh. United Airlines has
publicly stated that they intend to expand and grow Pittsburgh International as
a hub airport. We are hopeful that United is sincere. Increased flights and the
preservation of jobs across the board are directly tied our status as a hub
airport. The costs associated with hub status have mainly to do with pricing,
and I will address that issue later. Each of our groups strongly encourages
United Airlines to build a maintenance facility to accommodate
the new Airbus jets at Pittsburgh International Airport. Without question, no
other issue has been addressed with more concern or less information. Our local,
state and federal political leaders, as well as labor and community leaders have
all joined in unanimity in attempts to get this deal done. United
Airlines is currently studying their options. We join with you, Senator
Specter and Senator Santorum, our congressional delegation, Governor Ridge and
Chief Executive Roddey, and all concerned parties in voicing our strong support
for a positive decision on this issue. Speaking personally, as a resident of
western Allegheny County all my life, I know what the economic impact of losing
these maintenance jobs will mean to the viability of communities in that region.
We must all be supremely diligent and persistent in affecting a positive outcome
on this decision. I earlier mentioned pricing as a cost which mitigates the
benefits of being a hub airport. Within the Pittsburgh business community no
issue is certain to elicit more testimonials of outrage than the cost of flying
from Pittsburgh International Airport. In the interest of decorum I have omitted
some of the more colorful remarks in relation to this issue, but such
descriptive adjectives as "outlandish...... outrageous" and "usurious" are among
the more frequent. We all recognize that higher ticket prices on certain routes
is the price we pay for maintaining flight access. And the business community is
willing to pay a premium for that benefit. As an advocate for business I am put
in the curious position of objecting to a private company's right to charge what
the market will bear. But clearly some effort must be made to reduce the size of
the premium local flyers are forced carry. Finally, any assessment of this
merger must include an analysis of US Airways'
future prospects as a healthy and successful enterprise in the absence of
joining with United Airlines. It has been no secret that
US Airways has struggled to be consistently profitable due to a
wide range of factors - not the least of which is the high operating costs of
Pittsburgh International Airport. An objective conclusion could be reached that
US Airways' ability to compete on its own in the current
airline industry is precarious. If this airline were to collapse, the negative
economic impact to the, region would be catastrophic and far-reaching.
Speculation as to the benefits or detriments associated with the proposed
merger might require a necessary leap of faith when viewed in
this light. Business and economic development groups in Southwestern
Pennsylvania cooperate to an extensive degree - especially when issues of such
overarching importance as this proposed merger arise. I can
assure you that we will continue to fight to see that the region's interests are
advanced. Senator Specter and Senator Santorum, thank you again for holding this
important hearing and for giving me the opportunity to address these issues. At
this time, I am available to answer any questions you may have.
LOAD-DATE: August 22, 2000, Tuesday
