The Honorable Eric Holder
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, D.C. 20530
The Honorably Ray LaHood
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.
Health Care Service Corporation
Sun Chemical Corporation
UCB Pharma (Belgium)
Redfern Travel (UK)
Cresta World Travel (UK)
Corporate Travel Partners Limited (UK)
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.
Beckmill Research, LLC
RW & Associates, Inc.
Teamsters Local Union No. 783
Sun Travel, Inc.
Blue Ribbon Travel
Advent Travel Leaders
Ad Hoc Committee
The Abraham Lincoln - Wyndham Hotel
Caldwell Travel, Inc.
Pro Travel International, Inc.
JTM General Contractors
LXR Travel LLC
Howes Travel Inc.
Travel Leaders/Happy Holidays Travel
CCRA Travel Solutions
Professional Travel, Inc.
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
- 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