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ASTA Calls on DOJ To Reject United/US Air Merger Based on GAO Findings

Alexandria, Va., Dec. 21, 2000   -   In light of a newly released report by the General Accounting Office (GAO), the American Society of Travel Agents (ASTA) again called upon the Department of Justice to reject the proposed merger between United Airlines and US Airways. The GAO report identifies a host of negative results of the merger, including a significant loss of competition in 290 of the most heavily traveled air markets and the domino effect of further consolidation in an industry that is already characterized by too few dominant players and a serious lack of competition.

ASTA applauded statements by Rep. James L. Oberstar (D-MN) and Rep. Louise M. Slaughter (D-NY) that the merger would hurt millions of air travelers and lead to fewer choices, higher fares and a deterioration in service.

“It’s as clear as day that this merger is not good for the American people; it’s only good for the stockholders of these two airlines,” said ASTA President and CEO Richard M. Copland, CTC. “This is not about improved service or lower fares, this is about Big Air getting bigger. ASTA has one question: Where are the benefits of this merger to the American public? They are not outlined in this GAO report.”

In a news conference on Capitol Hill, Oberstar stated, “Fewer choices, higher fares and a deterioration in service is not what Congress contemplated when it deregulated the airline industry. Yet, that is the likely result if a United-US Airways merger is approved by the Department of Justice…I strongly urge the DOJ to take heed of the GAO’s analysis of the merger’s impact on competition and consumers, and reject this proposed merger.”

Slaughter echoed Oberstar’s remarks: “This report underscores what I have said all along—that this proposed merger would be the beginning of the end of the aviation industry as we know it…Deregulation was never intended to facilitate the creation of de facto monopolies controlling which communities live or die depending on their access to air service.”

The GAO report said that the new United would dominate 1,156 of the 5,000 most heavily traveled markets, affecting 61.1 million passengers. The GAO concluded that if the merger were approved, the “new United would so alter the existing balance in the domestic market that, for the other major U.S. airlines to compete successfully, they would have little choice but to consolidate as well.”

Said Slaughter, “If you think airline travel has become a grueling experience in recent months, just wait until you contend with a lack of flights, smaller planes and fewer choices.”

“Think about the implications of a labor action on our national air transportation system if this merger were to go through,” said Copland. “The GAO says that the new United would have over 25 percent of the total market. This airline would have the power to cripple the entire aviation system if its employees were to strike or even slowdown.”

“Moreover, the report found that DC Air’s service would not be up to snuff, its quality of service would be inferior and its ability to compete questionable,” Copland said.

The report is available online at www.gao.gov.

The mission of the American Society of Travel Agents and its affiliated organizations is to enhance the professionalism and profitability of members worldwide through effective representation in industry and government affairs, education and training, and by identifying and meeting the needs of the traveling public. The Society is the world's largest and most influential travel trade association with over 26,000 members in more than 170 countries.

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