March 19 - Industry Signatory Letter To DOJ, DOT Regarding Proposed AA-US Merger


The Honorable Eric Holder

Attorney General

United States Department of Justice

950 Pennsylvania Avenue, NW

Washington, D.C. 20530

 

The Honorably Ray LaHood

Secretary

United States Department of Transportation

1200 New Jersey Avenue, SE

Washington, D.C. 20590

 

Dear Attorney General Holder and Secretary LaHood:

The undersigned members of the Business Travel Coalition write to you regarding the proposed merger between American Airlines and US Airways. We are not advocating blocking the merger, at this time. Rather, in reducing from 6 major network airlines to possibly three, over a brief period of airline industry history, it is imperative to broaden and deepen the antitrust review beyond relevant markets and overlapping routes.

There is a unique opportunity and need to conduct a thorough forensic postmortem evaluation of the supportive analyses, projections and promises regarding the then proposed Delta-Northwest and Continental-United mergers consummated in 2008 and 2010 respectively. A study should also assess the competitive structural impact arising from removal from the market of low-fare maverick AirTran by Southwest Airlines.

Such an analysis would provide visibility to the actual outcomes versus the projected efficiency gains of those two mega mergers. Forward-looking insight would thereby be acquired with respect to claimed efficiencies in this current merger proposal that would be required to offset negative competitive and consumer impacts. Moreover, a merger-approval decision would be informed by understandings gained regarding prospective coordinated effects, monopsony power, pricing opacity and the lessoning efficacy of low cost carriers as marketplace discipliners as well as required structural remedies, were it determined that the proposed American-US Airways should be approved.

We attach for your perusals a White Paper on this proposed American-US Airways merger jointly produced by Business Travel Coalition (BTC) and the American Antitrust Institute as well as BTC testimony before the U.S. House Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial and Antitrust Law. There is one legislative remedy in the White Paper that we seek to call your attention to and that we would ask you to consider in your reviews.

In order to address an increasing imbalance in market power between airlines and consumers, and to address the complete absence of any private right of legal action at the state or federal levels, you might consider recommending or supporting Congressional legislation containing a minimum set of national consumer protections, enforceable at the state level. This would offer modernized structural consumer protections against substantially reduced competition while avoiding burdening airlines with a patchwork of state consumer protection laws. These protections would be designed not to replace but to compliment DOT’s existing authority in this area.

Sincerely,

Willamette University

GlaxoSmithKline

Health Care Service Corporation

International SOS

Sun Chemical Corporation

Stantec

TravelStore, Inc.

HealthCare California

UCB Pharma (Belgium)

Redfern Travel (UK)

Cresta World Travel (UK)

Corporate Travel Partners Limited (UK)

Megatours (Ecuador)

The Travel Company Edinburgh (Scotland)

Scottish Passenger Agents Association (Scotland)

Association for Airline Passenger Rights

Business Travel Coalition

Lumbermens Merchandising Corp

The Travel Team, Inc.

Valerie Wilson Travel, Inc.

LilyGild LTD

Sterling Jewelers

Beckmill Research, LLC

RW & Associates, Inc.

Purcell Systems

Teamsters Local Union No. 783

CI Travel

Hess Travel

Sun Travel, Inc.

Blue Ribbon Travel

Airplanners LLC

ChangingPlanes

Advent Travel Leaders

Ad Hoc Committee

The Abraham Lincoln - Wyndham Hotel

Caldwell Travel, Inc.

STA Travel

Weatherford

Topsource

Atlas Travel

Solidworks Corporation

TCP, Inc.

Pro Travel International, Inc.

JTM General Contractors

Colwick Travel

LXR Travel LLC

Howes Travel Inc.

Discount Travel

Travelwise International

MAPA Group

TravelStore, Inc.

Travel Leaders/Happy Holidays Travel

Geraci Travel

LCP

CCRA Travel Solutions

Professional Travel, Inc.

Courtesy Travel

Fare Buzz

A & I Travel Management, Inc.

Alexander Anolik, APLC

Cool Current Consulting

Travel Leaders-MSP Travel Group

Tanger Outlet Centers

Breton Village Travel Services, Inc.

MSW Travel Group

Frosch-GlobalPoint LLC

 

Attachments

- BTC / American Antitrust Institute White Paper regarding American-US Airways merger

- BTC testimony before the U.S. House Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial and Antitrust Law

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