Majority Statement

• John D. Rockefeller, IV

  Senator
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  Majority Statement

  John D. Rockefeller, IV

  Over the last five years, the commercial airline industry has undergone a brutal restructuring that cost hundreds of thousands of airline employees their jobs and their pensions, eliminated and or reduced service to countless small and rural communities, and changed the very nature of the industry. 

   

  Just last year, we thought the commercial airline industry had rebounded sufficiently and had undertaken enough structural reforms to weather the next economic downturn.  We were wrong. 

   

  The impact of the rising cost of oil barrel threatens the very viability of every airline in this country.   Six carriers have already been pushed into bankruptcy and more teeter on the edge of financial collapse.   

   

  I know that many of my colleagues will want to focus exclusively on the pending merger between Delta Air Lines and Northwest Airlines.  But, I do not want us to miss the primary point of this hearing – the financial health of the U.S. aviation industry. 

   

  I spoke at great length last week on this issue.  A healthy airline industry is critical to our entire economic future.  And, frankly, too few of us seem not to care.  We are losing our global leadership in aviation – from aerospace research, to air traffic control system development, to market share.  U.S. airlines are fast becoming second tier carriers in the global marketplace. 

   

  Over the last two years, I have heard a lot of airline CEOs tell me that they believe the airlines must consolidate to achieve long-term financial viability. 

   

  I am not unilaterally opposed to consolidation, as I understand that some consolidation may be necessary to make sure the United States has a financially stable commercial aviation industry.

   

  Although consolidation may be necessary to make sure we have a healthy airline industry, I am not convinced that consolidation is sufficient to solve the long-term challenges of the airlines.      

   

  Our hearing today will allow us to examine the current financial state of the industry, the steps that the industry and policy makers must take to achieve financial stability in the industry, and the potential impact another round of industry consolidation would have on the industry and the communities and consumers they serve. 

Minority Statement

• Ted Stevens

  Senator
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  Minority Statement

  Ted Stevens

  In the past 10 years, this Committee has witnessed dramatic ‘ups and downs’ in the airline industry.  For a state like Alaska, which depends on aviation more than any other mode of transportation, the seemingly constant state of turmoil and uncertainty is very concerning.

   

   

   

  Over the last week and a half, Congress has debated the need to modernize the nation’s aviation infrastructure.  This modernization has important implications for both our busiest cities and rural areas, like Alaska.  Unfortunately, other issues made this impossible.  I hope that Congress will continue to work to modernize our aviation infrastructure.

   

   

   

  Today, we turn to the financial state of the airlines.  On Monday of this week, crude oil rose to over $120 a barrel.  Already, many of the airlines and their employees have gone through difficult bankruptcy proceedings and restructuring.  If the price of oil continues to increase, or even remains stagnant at over $100 a barrel, sustainability of U.S. air carriers is going to be significantly impacted and we may see consolidation through elimination instead of mergers. 

   

   

   

  Obviously, one solution to the crude oil problem is increased domestic production, but that is an issue for another hearing. 

Testimony

• Mr. Richard Anderson

  Chief Executive Officer

  Delta Air Lines
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• Mr. Mark N. Cooper

  Director of Research

  Consumer Federation of America
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• Ms. Patricia Friend

  International President

  Association of Flight Attendants - CWA, AFL-CIO
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• Mr. Ray Neidl

  Analyst

  Calyon Securities
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• Mr. Patrick Murphy

  Principal

  Gerchick-Murphy Associates, LLC
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• Mr. Doug Steenland

  President and Chief Executive Officer

  Northwest Airlines
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• Robert Roach Jr.

  General Vice President - Transportation

  The International Association of Machinists and Aerospace Workers
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