Washington, D.C. - U.S. Senators Craig Thomas and Mike Enzi, both R-Wyo., are examining closely a proposed merger between two major airlines which may be harmful to Wyoming.
Thomas, Enzi and other senators sent a letter this week to Attorney General John Ashcroft urging the U.S. Department of Justice to conduct a thorough analysis of a pending proposal by United Airlines to acquire US Airways.
The proposed merger, as well as numerous delays and cancellations over the past year on United flights between Denver and several Wyoming cities, has raised many concerns on how consumers, competition and economic growth in Wyoming would be impacted.
"I think it is important to take the time to study whether more consolidation in the airline industry is a good thing for rural customers," Thomas said. "For any plan to receive my support, it must include some expectation that service in areas like Wyoming is going to continue or in fact improve. I'm not convinced yet that it would."
"Wyoming is struggling to stabilize its air service. Dependable and safe air travel is an economic lifeline in our state," said Enzi. "I don't want an airline mega-merger to shut the door on competition that could be good for Wyoming."
The merger has sparked consumer fears that the shrinking number of major airlines will result in higher airfares, poor customer service and decreased competition.
In the upcoming months, the U.S. Department of Justice will examine the proposed merger, conduct a market-by-market review and determine whether the merger is likely to cause a significant reduction in competition in relevant markets. If the study finds that the merger may reduce competition, the government could sue the airlines in federal court to block the merger.
The text of the letter is included below.
June 20, 2001
The Honorable John D. Ashcroft
Attorney General of the United States
Department of Justice
Tenth Street and Constitution Ave., N.W.
Washington, D.C. 20530
Dear Mr. Attorney General:
We are writing to express our serious reservations about the pending proposal by United to acquire US Airways and to sell assets to American Airlines. As you know, Congress has held a number of hearings on the proposals over the past few months. These hearings have raised serious questions regarding the impact of this merger proposal on consumers and on competition, particularly for small communities across our nation. Many witnesses have indicated that, if this merger is approved, further airline consolidation is inevitable. This proposed merger may well be transforming even for airline industry competition. Obviously, this causes serious concern here in Washington and around the country.
We know that the Department of Justice is currently engaged in a thorough examination of the adverse effects of the current mega-merger proposal on competition, consumers and service. We hope that your Department will proceed cautiously as you conduct your analysis of this transaction. We urge the Department of Justice to take the time necessary to determine the appropriate action to protect competition in the airline industry.