- Dec 4, 2006
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Lawmaker won't back Northwest-Delta merger
By Barbara De Lollis, USA TODAY
U.S. House Transportation Committee Chairman James Oberstar said Wednesday that he opposes ongoing merger talks between Minnesota-based Northwest Airlines and Delta Air Lines, saying any merger of major domestic carriers would hurt consumers.
Oberstar, a Minnesota Democrat and a key player in aviation policy, said any airline consolidation would result in a rapid collapse of the industry into two or three megacarriers. "I don't think mergers are in the best public interest, and that includes this one," he said.
Oberstar's comments came during a conference call with reporters in which he confirmed ongoing discussions between executives of Atlanta-based Delta (DAL), the USA's No. 3 airline, and No. 6 Northwest (NWA).
Neither Delta nor Northwest have publicly acknowledged the merger talks, and both declined to comment Wednesday.
Oberstar told reporters he invited Northwest executives to his office on Tuesday to discuss the status of merger talks to avoid operating "on the basis of rumor."
He said the executives confirmed the talks with Delta. The talks are in the early stages, Oberstar said, and the executives told him that they would look for another partner if Delta were to move ahead with No. 2 United Airlines (UAUA) as a merger partner instead of Northwest. Oberstar says he believes Northwest is currently talking only with Delta about a possible merger.
By law, mergers between large airlines must undergo scrutiny by the Department of Justice antitrust unit and the Department of Transportation. But congressional leaders can hold public hearings and exert pressure on regulators and have done so in the past.
Officials at American (AMR), currently the world's largest airline, said Wednesday that a "more rational industry structure" resulting from consolidation could benefit both consumers and the industry. But they stopped short of climbing onto the merger bandwagon.
CFO Tom Horton, in a conference call about American's quarterly financial performance, said the complexity of putting together two airlines makes it difficult to achieve the desired results. Horton said American is watching Delta's search for a possible merger partner closely and contemplating what its competitive response, if any, would be, he said.
U.S. Rep. Jerry Costello, a Democrat from United's headquarters state of Illinois and chairman of the House aviation subcommittee, issued a statement saying, "The history of these (merger) deals is not a positive one for consumers and airline employees." At the same time, Costello said, he'd review any proposed merger on its merits.
By Barbara De Lollis, USA TODAY
U.S. House Transportation Committee Chairman James Oberstar said Wednesday that he opposes ongoing merger talks between Minnesota-based Northwest Airlines and Delta Air Lines, saying any merger of major domestic carriers would hurt consumers.
Oberstar, a Minnesota Democrat and a key player in aviation policy, said any airline consolidation would result in a rapid collapse of the industry into two or three megacarriers. "I don't think mergers are in the best public interest, and that includes this one," he said.
Oberstar's comments came during a conference call with reporters in which he confirmed ongoing discussions between executives of Atlanta-based Delta (DAL), the USA's No. 3 airline, and No. 6 Northwest (NWA).
Neither Delta nor Northwest have publicly acknowledged the merger talks, and both declined to comment Wednesday.
Oberstar told reporters he invited Northwest executives to his office on Tuesday to discuss the status of merger talks to avoid operating "on the basis of rumor."
He said the executives confirmed the talks with Delta. The talks are in the early stages, Oberstar said, and the executives told him that they would look for another partner if Delta were to move ahead with No. 2 United Airlines (UAUA) as a merger partner instead of Northwest. Oberstar says he believes Northwest is currently talking only with Delta about a possible merger.
By law, mergers between large airlines must undergo scrutiny by the Department of Justice antitrust unit and the Department of Transportation. But congressional leaders can hold public hearings and exert pressure on regulators and have done so in the past.
Officials at American (AMR), currently the world's largest airline, said Wednesday that a "more rational industry structure" resulting from consolidation could benefit both consumers and the industry. But they stopped short of climbing onto the merger bandwagon.
CFO Tom Horton, in a conference call about American's quarterly financial performance, said the complexity of putting together two airlines makes it difficult to achieve the desired results. Horton said American is watching Delta's search for a possible merger partner closely and contemplating what its competitive response, if any, would be, he said.
U.S. Rep. Jerry Costello, a Democrat from United's headquarters state of Illinois and chairman of the House aviation subcommittee, issued a statement saying, "The history of these (merger) deals is not a positive one for consumers and airline employees." At the same time, Costello said, he'd review any proposed merger on its merits.
