Airline merger draws Hill scrutiny

The top lawmakers on the Senate committee responsible for preventing antitrust violations are promising to take a careful look at the merger announced Thursday between U.S. Airways and American Airlines.

The proposed $11 billion merger between the airlines, which has been in the works for more than year, will require approval from the Federal Aviation Administration (FAA) and the Department of Justice.

Lawmakers say they will conduct a thorough review of their own to assess the impact of the merger on the industry and consumers.

“During my time in the Senate I have worked hard to keep the airline industry competitive to make sure companies retain jobs, maintain service levels and keep prices low for travelers,” Sen. Amy Klobuchar (D-Minn.) said in a statement. “As chair of the Senate Antitrust Subcommittee I plan to hold a hearing to thoroughly review the proposed merger and examine its impact on competition and consumers.”

The ranking Republican on the antitrust panel, Sen. Mike Lee (R-Utah), agreed with the need for a hearing, though he noted that he generally favors consolidation in the airline industry.

{mosads}”Mergers are an essential element of our rapidly changing economy, often creating significant efficiencies and helping ensure that resources are put to their most productive use,” Lee said in a statement. 

“Absent evidence that a transaction will substantially reduce competition and thereby harm consumers, I believe government intervention is usually unjustified.”

Klobuchar and Lee are the highest ranking lawmakers on the Senate Judiciary Committee’s Antitrust, Competition Policy, and Consumer Rights subcommittee.

Sen. Jay Rockefeller (D-W.Va.), the chairman of the chairman of the Senate Commerce, Science and Transportation Committee, also has concerns about the merger and plans to review it “very closely.”

“Industry consolidation has created stronger and more financially viable airlines, which are necessary for our country’s long-term economic growth. But, it has also resulted in fewer choices for consumers, higher air fares, and reduced air service to small and medium sized communities,” Rockefeller said in a statement.

“Any further airline merger must be carefully evaluated to make sure it is in the best interest of the travelling public by creating more competition, more options, and lower fares.”

Lee expressed optimism that the agreement “has potential to benefit the air travel industry as well as consumers,” but acknowledged that the recent trend of airline consolidation has reduced the amount of companies competing for passengers.

“Antitrust officials must ensure that an additional merger of this magnitude would not lead to higher passenger fares, result in diminished service to regional markets, or allow for coordinated conduct among rivals.”

Lee said he looked forward to working with Klobuchar to conduct “a thorough review of this transaction and providing oversight of antitrust regulators, as they do the same.”

-This story originally posted at 10:49 a.m. and it was last updated with new information at 12:31 p.m.