Copyright 2000 P.G. Publishing Co.
Pittsburgh
Post-Gazette
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July 18, 2000, Tuesday, SOONER EDITION
SECTION: BUSINESS, Pg. E-1
LENGTH: 1003 words
HEADLINE:
SHUSTER BACKS AIRLINE MERGER;
COMMENTS COME AT RESUMPTION OF NONSTOP TO
LONDON
BYLINE: FRANK REEVES, POST-GAZETTE STAFF WRITER
BODY:
U.S. Rep. Bud Shuster, one of Capitol
Hill's most powerful lawmakers, yesterday said he supports the proposed
merger of US Airways and United Airlines, warning that unless
the pact is approved, US Airways is likely to face a bleak
future on its own.
Shuster, chairman of the House Transportation and
Infrastructure Committee, is the first major Pennsylvania political leader to
endorse the $ 11.6 billion merger announced by the two airlines in May.
His committee oversees major transportation bills -- from highway
construction to airport modernization -- that are considered by Congress. These
bills often contain money for projects that are vitally important to lawmakers
and their constituents. Last month, the House Transportation Committee was one
of several congressional panels to hold hearings on the proposed merger.
"I started out [before the hearings] thinking this may be a good deal.
But I've come to the conclusion that this is an extremely good deal for
Pittsburgh, Western Pennsylvania and the mid-Atlantic region," said Shuster in
Pittsburgh for a ribbon-cutting ceremony marking the resumption of direct
flights between Pittsburgh and London's Gatwick Airport.
"I worry about
the long-term viability of US Airways. I believe the merger is a way of saving
this airline," Shuster said, noting that during the second half of 1999 and the
first quarter of this year, the airline lost over $ 300 million.
US
Airways, the nation's sixth largest airline, faces increased competition from
low-cost airlines such as Southwest and JetBlue in the Northeast, where US
Airways has long been the dominant carrier.
The U.S. Justice Department
is reviewing the proposed merger and could sue to block it if it believes the
merger would violate antitrust laws.
Shuster acknowledged that if the
merger is approved, it will probably lead to a consolidation of the U.S. airline
industry, reducing the number of major carriers from six to three.
This
doesn't mean an end to competition, Shuster said. He said with fewer major
carriers, there could be a proliferation of smaller, low-fare carriers that will
"tend to keep the big boys honest."
Shuster said while he is
enthusiastic about the proposed merger, there are some conditions that United
and US Airways must meet before he can give it his complete endorsement.
He said he would have to be assured that Pittsburgh and Philadelphia
will remain hub cities after the merger. And that United, following the merger,
would agree to expand the maintenance facility in Pittsburgh.
But
Shuster said he had little doubt that these conditions would be met.
US
Airways Chairman Stephen M. Wolf, who like Shuster was on hand at Pittsburgh
International Airport for ribbon-cutting ceremonies marking the resumption of
nonstop Pittsburgh-London service, said the airline has been discussing the
issue with his counterparts at United and that United is close to a decision.
Wolf said United, with its 600-plane fleet, and US Airways, with 400 aircraft,
need an expanded maintenance facility.
Shuster offered his assessment of
US Airways on a day when the airline's future seemed brimming with hope.
Pittsburgh has been without direct service to London since October, when
British Airways abandoned a route that for 14 years linked Pittsburgh to London.
As the Boeing 767-200 aircraft, with 200 passengers on board, pulled
away from the gate at Pittsburgh International Airport around 5:30 p.m., it
passed under an arc of water. Fire trucks shot the water into the air, a
traditional salute for airlines departing on the maiden run of a new route.
"I'm just excited. It more exciting than a 'N Sync concert," said
16-year-old Andrea Riden of Hollidaysburg, one of 41 students from Hollidaysburg
Area Senior High who were off to London and Paris for a 9-day trip.
Sue
Adams of Greensburg was sitting in the waiting area, with her mother, Mary Diehl
of Towanda.
"This is a retirement present from my children," said Diehl,
who recently retired from the DuPont plant in Towanda.
On hand for the
ribbon-cutting ceremony were US Airways officials, including Wolf, and federal
and state officials who'd been key in getting the United Kingdom to agree to the
resumption of the flights. These included Shuster, U.S. Department of
Transportation Secretary Rodney Slater, Allegheny County Executive Jim Roddey
and Mayor Murphy.
Shuster and Slater -- appearing at times to work as a
"bad cop, good cop" duo in bringing pressure to bear on the British government,
were given the lion's share of credit for securing British agreement to allow
for resumption of the flights.
"I am convinced that without the strong
hand of Bud Shuster, we wouldn't be here today," Roddey said.
Roddey
said the flight would be an economic boon to the region, generating anywhere
from $ 20 to $ 40 million a year into the local economy. He also said the flight
would make it easier to attract companies to locate in the Pittsburgh region as
well as keep companies here.
Yesterday's flight symbolized an end -- or
at least truce -- in a long simmering dispute between United States and Great
Britain over aviation rights.
So acrimonious had relations become that
Shuster introduced legislation that would have imposed sanctions against British
airlines unless the British government agreed to talks to revise Bermuda II, the
aviation treaty between the countries, and allow the resumption of direct
flights between London and Pittsburgh.
In June and again on July 5, U.S.
and British negotiators began comprehensive talks aimed at revising the aviation
treaty between Britain and the United States.
Slater said he was
"cautiously optimistic" that the two countries could reach an agreement on a new
aviation treaty by the end of the year.
Shuster, characteristically, was
less optimistic, saying he believed the British would hang tough before agreeing
to revise a treaty, which in his view, gives British carriers advantages over
U.S. airlines.
GRAPHIC: PHOTO, Photo: Bud Shuster,
R-Everett
LOAD-DATE: July 19, 2000
