Congressional Transportation Leaders Question DOJ Proposed Airline Merger Settlement

November 22, 2013

WASHINGTON, D.C. — Chairman John D. (Jay) Rockefeller IV (D-WV) and Ranking Member John Thune (R-SD) of the Senate Commerce, Science, and Transportation Committee, along with Chairman Bill Shuster (R-Penn) and Ranking Member Nick J. Rahall, II (D-WV) of the House Transportation and Infrastructure Committee, sent a letter to Attorney General Eric Holder today expressing concern over the proposed settlement agreement with US Airways and American Airlines. The bipartisan leaders of the authorizing committees in the House and Senate, which are responsible for oversight of the U.S. aviation system, believe that service to small communities and rural states will suffer if the Department of Justice (DOJ) limits the allocation of divested slots and gates to only low cost airlines.

The Congressional leaders want to ensure that the DOJ considers both the need to promote competition in the airline industry and the need to preserve small community air service during the process of divesting a record number of slots and gates under the proposed US Airways and American Airlines settlement agreement. A copy of the letter was also sent to Transportation Secretary Anthony Foxx.

The chairmen and ranking members from the House and Senate noted that, "we fully anticipate that many of the slots and gates will ultimately be awarded to LCCs [low cost carriers]; we just believe the process should be open to all carriers.

"While LCCs may increase competition on commercial air service to larger markets, they do not generally provide service to smaller communities or rural areas, as only legacy air carriers have networks that encompass these areas.”

The bipartisan, bicameral letter highlights this fact based on the DOJ’s Amended Complaint to the U.S. District Court, which notes that “‘[i]n many relevant markets, these airlines do not offer any service at all.’ Accordingly, the implicit or explicit preclusion regarding which carriers can bid on the slots and gates to be divested by the newly constituted airline eliminates almost any chance in the short or long-term that overall network service to smaller communities and less populated states and regions will see direct benefits from these historically significant gate and slot divestitures."

The full letter can be found here.