Washington, DC – U.S. Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT) today called for a thorough review of recent airline mergers as part of the examination of the proposed American Airlines-US Airways merger. In a letter to Attorney General Eric Holder and Secretary of Transportation Ray LaHood, Klobuchar and Lee urge the Department of Justice (DOJ) and Department of Transportation (DOT) to assess how past airline mergers have affected prices, service, fees, and mileage programs and to examine whether the merged airlines have realized the efficiencies they promised to both agencies. Klobuchar, the chair of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, and Lee, the ranking member on the subcommittee, will hold a hearing to examine the American Airlines-US Airways merger on March 19th.
“As chair of the Senate Antitrust Subcommittee, I know how important competition in the airline industry is to help keep prices low for consumers without making cuts to service,” said Klobuchar. “That’s why I’m calling for a thorough review of the impact past mergers have had on the industry and I look forward to examining the merger at our hearing in the coming weeks.”
“As our Subcommittee reviews the proposed merger between American Airlines and US Airways, we have the benefit of learning how consumers fared in other, recent airline mergers,”said Lee. “I look forward to reviewing these past transactions as we assess the likely effect of this merger on airline service and prices.”
The full text of the letter is below:
February 26, 2013
The Honorable Eric Holder
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, D.C. 20530
The Honorable Ray LaHood
United States Department of Transportation
1200 New Jersey Avenue, SE
Washington, D.C. 20590
Dear Attorney General Holder and Secretary LaHood:
As you review the proposed merger between American Airlines and US Airways, we write to highlight the importance of thoroughly analyzing the impact of recent airline mergers approved by your departments on prices, service and competition in the airline industry. We ask that you provide our Subcommittee with information you learn regarding the impact of these previous mergers.
As you know, over the past few years, we have seen significant consolidation in the airline industry. Mergers between Delta and Northwest and United and Continental have reduced the number of legacy carriers from six to four. In addition, two of the largest low-cost carriers – Southwest and AirTran – merged in 2011. We urge you to examine the proposed American/US Airways merger in light of this significant consolidation, including a robust analysis of the impact those mergers have had on airline competition. Specifically, it will be important to determine how these mergers affected consumer prices, baggage and other fees, frequent flier programs, and airline service. It will likewise be critical to determine whether the airlines have realized the efficiencies they claimed as the basis for the mergers.
As we begin the discussion of this merger in our Subcommittee, we share a common goal of ensuring that consumers benefit from vibrant competition. Such competition promotes low prices and quality air service, both of which are so essential to our country’s economic growth.