| By Jon Hilkevitch | A leading congressional force on aviation issues came out Thursday against the proposed merger between United Airlines and Continental Airlines.
U.S. Rep. James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, said the proposed $3 billion merger announced this week would accelerate the consolidation of the airline industry and lead to higher fares, downgraded service and fewer choices for travelers. |
See also • Oberstar’s letter objecting to the merger.
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Oberstar, who opposed the merger of Delta Air Lines and Northwest Airlines almost two years ago for the same reasons, sent a letter expressing his concerns to the anti-trust division of the Justice Department.
“This was not what I voted for in 1978 when Congress voted to deregulate the airline industry,” he said in Washington during a phone conference call with reporters. “We expected that leaving the market place to the competitive forces would increase competition and increase the number of new entrants.”
Initially, that is what happened. But today, almost all of the fledgling airlines that began service after deregulation have disappeared, he noted, and the industry is moving toward domination by three “mega-carriers” — a reference to Delta, American Airlines and United.
Oberstar said the “fears that I expressed in Northwest-Delta are now fully realized.”
“The airspace is the common heritage of all Americans. It is not the private domain of corporate executives…in the airline sector,” he added.
Government approval of the United-Continental merger would lead to reductions in flight capacity overall and cuts in service to city pairs, especially involving smaller markets, he warned.
“These carriers rarely compete head-to-head on serving smaller markets,” Oberstar said.
“This transaction fundamentally alters the nature of competition…and it must be stopped,” he said. “This is wrong and it is bad for competition” nationally and internationally. “Bigger doesn’t mean cheaper or less cost. It means you accumulate more debt,” he said.
Justice Department officials offered no immediate response to Oberstar. Last year, the department objected to a proposal by United and Continental to cooperate on international routes within the Star Alliance of airlines. The department recommended a more limited trans-Atlantic agreement instead.
I suspect a large campaign contribution is forthcoming for Congressman Obestar from United and Continental very soon.
No, not until they auction off some of the slots at their strong holds such as ORD, Houston and ERW. For Chicago, put the Western New Terminal on the prerequisite list.
He may not have received an envelope!
At 76 years old the Congressman needs to retire. The vote to deregulate and the lack of oversight by the feds was a classic example of Washington incompetence.
How many airlines have gone through bankruptcies? How many start-ups failed due to lack of resources? How many airports forced the big guys to share the gate space with the start ups? How many bankrupt airlines’ pension funds are the taxpayers paying? Where has he been in the 1980’s or 90’s??
Retire, and let someone out for the taxpayer in!
The odds of anyone listening to Oberstar’s mea culpa about voting for the transportation deregulation bill 32 years ago are about as high as the Tribune doing anything about the Chinese spammers, who, after totally defacing the main site, have moved over here.
It isn’t up to the Justice Department to rule in a way contrary to the law. If Oberstar is is aggrieved, he should move a bill to repeal the act. After all, he is in Congress, we are not. Maybe he’ll get Senator Al Franken to go along.
The fact that this buffoon has been around since 1978 should tell you how corrupt he is.
Another reason why there should be term limits for Senators and Congressmen. He was there to vote for the transportation deregualtion 32 years ago and is still in that post today.
This is not uncommon with Congress. I applaud the fact that he wants to serve the public, if in fact that is why he is in this seat, but how many other people could have stepped in with fresh ideas.
He may be a great man and he may be a bad example for me to use for term limits, but that is a bit ridiculous. The former senior Senator for Massachusetts would have been the ideal poster boy for term limits.
U.S. Rep. James Oberstar,
You seem to have forgot about all the LLC carriers out there. The fact the Southwest carries more domestic passengers than any other airlines should show that Deregulation has created new entrants. You also have JetBlue, Airtran, and Frontier.
Juan
Jimmy W | May 6, 2010 12:01 PM | Reply
No, not until they auction off some of the slots at their strong holds such as ORD, Houston and ERW. For Chicago, put the Western New Terminal on the prerequisite list.
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They probably want touch United’s ORD gates since it is considered a competitive airport. American Airlines has about 35% of the traffic with United having 50%. They will also see that Midway has it 2nd largest Hub in the Chicago area.
They probably won’t touch EWR because the NYC market also has JFK with American, Delta, and JetBlue. The metro area has plenty of competition.
If was wants to get involved he should pass a bill that force LCC(Southwest, Airtran, etc..) to fly to rural areas to access to better gates.
“”This was not what I voted for in 1978 when Congress voted to deregulate the airline industry,” he said in Washington during a phone conference call with reporters. “We expected that leaving the market place to the competitive forces would increase competition and increase the number of new entrants.”
Initially, that is what happened.”
Yeah, initially until the government STEPPED IN AGAIN to “secure” the air flight industry.
Stupid, stupid government officials.
The reason people aren’t flying is because of the overzealous regulations, and that leads to a loss of business.
It was a survival tactic, either combine or both lose.