Copyright 2000 Journal of Commerce, Inc.
Journal of
Commerce - JoC Online
December 20, 2000
SECTION: AIR COMMERCE; Pg.WP
LENGTH: 324 words
HEADLINE:
GAO slams proposed United-USAirways merger
BYLINE: BY
WILLIAM ARMBRUSTER - JOC ONLINE
BODY:
A new report
by the Government Accounting Office said the proposed merger of United
Airlines and US Airways would reduce choices for millions of travelers
and likely lead to further mergers among other air carriers."If
the merger proceeds as proposed, it would significantly alter the current state
of competition in the domestic airline industry," GAO said in the study, which
was released Wednesday by Reps. James Oberstar (D-Minn.), and Louise Slaughter
(D-N.Y.)
"I believe that, if the proposed merger were to be approved,
the remaining large airlines would feel compelled to merge to retain their
shares of the overall market. We would soon be reduced to an industry of three
major competitors, resulting in a devastating loss of competition for
consumers," said Oberstar, the ranking Democrat on the House Transportation and
Infrastructure Committee. Slaughter said the report underscores what she has
said all along - "that this proposed merger would be the beginning of the end of
the aviation industry as we know it."
United and US Airways announced
plans to merge last spring. The Justice Department must approve the deal for it
to go through.
The report did not examine the impact of the merger on
cargo. When the deal was announced, freight forwarders' opinions were split, as
they noted that there is little direct competition between United and US
Airways. However, they, too, expressed concern that the deal would prompt
American and Delta to forge deals with Continental and Northwest, leaving the
nation with just three big airlines.
Oberstar said the deal would result
in "a devastating loss of competition for consumers."
Slaughter added
that communities would be at the mercy of three carriers dominating the entire
country. "Deregulation was never intended to facilitate the creation of de facto
monopolies controlling which communities live or die depending upon their access
to air service.," she said.
LOAD-DATE: December 21,
2000 
