Copyright 2000 The Baltimore Sun Company
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The Baltimore Sun
December 9, 2000 Saturday FINAL EDITION
SECTION: BUSINESS, Pg. 10C
LENGTH: 722 words
HEADLINE:
Md. opposes United's bid for USAir;
State fears effects on BWI airport of
proposed merger;
Loss of competition;
Concerns are raised with Justice
Dept., state's congressmen
BYLINE: Kristine Henry
SOURCE: SUN STAFF
BODY:
Citing a potential loss of service and decreased competition at
Baltimore-Washington International Airport, the state has begun a campaign
against United Airlines' proposed takeover of US Airways.
John D.
Porcari, the state's transportation secretary, met with antitrust officials at
the Justice Department last month urging them to block the acquisition.
Annapolis also has enlisted the help of the state's congressional delegation.
Should the merger go through, United has said it would reduce the number
of US Airways' Baltimore flights. US Airways is the second-biggest user of BWI,
after Southwest Airlines. "Every air traveler from Philadelphia to Richmond is
going to feel the impact of the proposed merger with higher fares and fewer
choices," Porcari said in an interview yesterday. "We don't feel it's in the
region's best interest."
Officials at the Justice Department did not
return calls seeking reaction to the state's position.
"It's not what
Maryland's position is, per se, it's the legal and antitrust arguments that are
more important," Porcari said. "We have some very compelling antitrust
arguments."
In May, shortly after the tentative merger was announced,
United said the merged airline would end nonstop service from BWI to eight
cities: Cleveland; New Orleans; Providence, R.I.; Manchester, N.H.; Miami; and
Fort Lauderdale, Jacksonville and West Palm Beach, Fla.
In a position
paper, the state spelled out several ways the merger of United, the world's No.
1 airline, and No. 6 US Airways could hurt the region:
Nine cities now
served by two carriers from BWI would be reduced to service by only one.
Five of BWI's top origin-and-destination markets would become
monopolies.
BWI would go from being the most competitive Washington-area
airport to the least competitive
BWI passengers would be forced to use
higher-fare, nearby airports dominated by United, which has a hub at Dulles
International Airport in Vir- ginia.
Susana Leyva, a United spokeswoman,
said the airline would continue working with state officials, and she added that
the merger was proposed with the idea of increasing service, not cutting it.
A US Airways spokesman said the airline had no comment on the state's
opposition to the merger between its parent, US Airways Group Inc., and UAL
Corp., United's parent.
Several state agencies have come together to
form a "Maryland merger team" to build opposition to the merger, Porcari said.
"United's proposed acquisition of US Airways is clearly
anti-competitive, and thus represents a fundamentally flawed commercial
transaction which is at odds with the broad public interest," Porcari wrote in a
letter to Maryland's members of Congress. "As part of our proposed public
strategy, we are respectfully requesting that the delegation use various public
forums to support this position."
Calls to Maryland's two Democratic
senators, Paul S. Sarbanes and Barbara A. Mikulski, were not returned yesterday.
Rep. Benjamin L. Cardin said he supports the state's position and thinks
the delegation in general will back it.
"We're not interested in
blocking the merger just for the sake of blocking it," said the Baltimore
Democrat. "We understand that consolidation is going to happen in the airlines,
but we think we have legitimate concerns and those legitimate concerns should be
addressed.
"Quite frankly, there will be concessions made during the
merger and we just want to make sure BWI will be treated fairly," Cardin said.
A spokesman for Rep. Wayne T. Gilchrest, a Republican who represents the
1st District, said he was studying the state's request.
"Given
everything else that's going on right now, it's not high on the list of
priorities. But we're looking at it," said Eric Webster, legislative director
for Gilchrest, who is a member of the House Transportation and Infrastructure
Committee.
If the merger is allowed to proceed, authorities must ensure
competition, Porcari said in his letter to lawmakers.
Porcari wrote that
the antitrust concerns of "the proposed transaction can be affirmatively
addressed only if Justice were to impose conditions, including a divestiture by
the combined carrier of US Airways' facilities and services now at BWI to
another major U.S. airline, so as to preserve and promote competition."
GRAPHIC: Photo(s), Fares affected?
United Airlines' proposed merger with US,
Airways would lead to higher fares for BWI users and fewer flight,
options, the state claims., 1997 FILE PHOTO
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