US Airways, Delta debate merger benefits in Senate hearings

Last week in Washington, D.C., representatives of the groups for and against US Airways' hostile takeover of Delta made their cases before the Senate Commerce, Science and Transportation Committee hearing on the impact of consolidation on the airline industry.

As reported by TheStreet.com, the Associated Press, and Reuters, the opposing sides each claimed to be acting in the best interests of the majority of their stakeholders.

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Predictably, US Airways chief Doug Parker implored the assembled senators to let the dynamics of free-market capitalism work their magic, inexorably leading to a best-case outcome for all parties, from employees to creditors to consumers.

Which leaves this writer less than mollified. After all, it was the combination of the free market and inept airline management that conspired to bring us the past five years of unparalleled chaos and instability in the commercial aviation sphere. A promise of more of the same is an argument for re-regulation.

Delta's CEO Gerald Grinstein warned that the merger would result in the loss of 10,000 jobs. US Airways' Parker countered that no front-line jobs would be axed.

Delta's pilots, decked out in their natty aviator's uniforms, lined the hearing room, grimly registering their opposition to the merger. Because they anticipate salary and job cuts.

And so it went, with the two sides trading charges and counter-charges, rosy promises and dark predictions. Much of the back-and-forth came across as posturing, obvious attempts to spin narrow self-interest in the guise of the greater good.

But in Grinstein's prepared remarks, he cited a figure that should have given the lawmakers pause: "This merger will create a near monopoly—over 90 percent passenger share—in more than 1,500 markets affecting over 8.5 million passengers."

Assuming Grinstein's figures are accurate, that consolidation would result in higher prices for a substantial number of travelers, in a significant number of markets.

And if our lawmakers are doing their jobs and truly representing the broad interests of the traveling public, that's a concern worth looking into.

So says this taxpayer.

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