Lawmakers urge bidding for gates in airline merger
DALLAS — Four key members of Congress say that all airlines — not just low-fare carriers — should be able to bid on gates and landing rights that American Airlines and US Airways will give up after their merger.
The leaders of the House and Senate transportation committees say they’re worried that unless the big airlines can bid, service between Washington and some smaller cities may be lost.
The lawmakers made their concerns public Friday as consumer advocates prepared to ask a federal judge to force the airlines into deeper concessions in exchange for approving a merger that will create the world’s biggest airline.
The U.S. Justice Department sued to block the merger but settled this month after American and US Airways agreed to give up gates and landing rights at several big airports, notably Washington’s Reagan National Airport. Officials said those assets would go to low-cost airlines because the big, so-called legacy airlines — the biggest being United and Delta — had stifled competition.
Top Democrats and Republicans on the transportation committees released a letter that they sent to Attorney General Eric Holder urging that bidding be open to all airlines. They said that low-cost carriers don’t generally fly to smaller cities, so freezing out the big airlines won’t help consumers in those places.
The settlement was widely viewed as likely to benefit Southwest Airlines and JetBlue Airways, two self-avowed low-cost carriers that have indicated interest in getting some of the American and US Airways landing rights at Reagan National.
However, Delta had also expressed interest in picking up landing rights at Reagan National and two gates that American agreed to surrender at Dallas Love Field. “We do believe that all airlines should have an opportunity to bid on the divested assets,” Delta spokesman Trebor Banstetter said Friday.
Southwest spokesman Brad Hawkins responded that legacy airlines already dominate Reagan and New York’s LaGuardia airports. Letting them bid on American and US Airways gates and slots “defeats the very purpose of the divestiture — to create lower fares, more competition, and better flight options for consumers,” he said.
By settling the Justice Department lawsuit, American and US Airways removed the last major hurdle to merging. A federal law called the Tunney Act lets a court review government decisions on mergers and gives the public 60 days to make comments to the Justice Department, but the airlines are so confident in the outcome that they plan to complete their deal in early December.
Judges have rarely tinkered with antitrust agreements. In 1995, a federal judge rejected a government agreement to settle antitrust charges that Microsoft Corp. had unfairly competed against rivals. An appeals court overruled the judge.
Charlie Leocha, director of the Consumer Travel Alliance, said he will ask the Justice Department and the court to require American and US Airways to give up additional airport gates beyond the ones they’ve agreed to divest in Los Angeles, Chicago, Boston, Dallas and Miami.
Albert Foer, president of the American Antitrust Institute, an early foe of the American-US Airways merger, said his group also would file a protest under the Tunney Act, but added, “Normally we don’t bother because it’s not an effective law.” He believes the Justice Department would have killed the merger if it had taken its lawsuit all the way to trial.
But Herbert Hovenkamp, an antitrust expert and law professor at the University of Iowa, said he thinks the Justice Department got a better deal than critics realize by gaining new gates and slots for low-cost airlines.
“This settlement is a compromise,” he said. “The Justice Department might have gotten more” by going to trial, “but it might have lost everything.”