Airline mergers to face scrutiny

A U.S. airline merger plan would get a "long" review by U.S. lawmakers concerned the industry may consolidate to as few as two major carriers, the House aviation subcommittee chairman said.

"This is going to be a long process," Rep. Jerry Costello, an Illinois Democrat, said in a Bloomberg Television interview Thursday. "Just because two airlines reach an agreement doesn't mean that overnight they can merge."

Costello expressed concerns a day after media reports said Delta Air Lines Inc. and Northwest Airlines Corp. could announce a merger plan as early as next week to become the world's largest carrier. Reports have also said Chicago-based UAL Corp.'s United Airlines is in serious talks with Continental Airlines.

"Congress does need to take a look at it on behalf of the consumer," said Rep. John Mica of Florida, the top Republican on the House Transportation and Infrastructure Committee, in the same interview. "What good would it be to have one or two major airlines and very little competition?"

The comments preview challenges airline executives would face as they promote a merger in Washington. Rep. James Oberstar, chairman of the House transportation committee, said Jan. 29 he will try to block any proposed airline mergers.

The ability of Oberstar or any lawmaker to influence whether a merger gets approved is "very limited," James Burnley, who was transportation secretary in Republican administrations from 1987 to 1989, said after Oberstar's comments.

The U.S. Justice Department's antitrust division decides mergers, leaving lawmakers such as Oberstar mainly with the "bully pulpit" to try to influence public opinion, said Burnley, a partner at law firm Venable LLP.