House Chairman Insists He'd Fight Any Airline Merger

WASHINGTON — "Hell no!"

With that outburst, House Transportation Committee Chairman James Oberstar on Tuesday bluntly reiterated his opposition to any attempt by Delta Air Lines Inc. to merge with either Northwest or United airlines.

The Minnesota Democrat has been saying for weeks that he opposes major airline mergers. But at a press conference on Capitol Hill, the powerful chairman of the House committee with jurisdiction over civil aviation made it clear that he would not waver — even if his home state stood to gain the headquarters of one of the world's largest airlines.

He would fight "any merger," because any carrier combination would touch off a wave of consolidation, resulting in higher fares and less service for many communities, he said.

Congress did not enact airline deregulation in 1978 "in order to create golden parachute opportunities for airline executives, and that's what results from mergers," he said.

Ever since word began spreading on Wall Street this month that Delta was considering a merger with Northwest or United, Oberstar has been making his opposition clear. When he met with reporters Tuesday to lay out his committee's 2008 agenda, he promised to make fighting mergers a top priority.

He said he has not gotten any new information about the proposed merger, but knows how he would proceed if one were announced.

First, he would try to influence the Justice Department to block it on antitrust grounds. Then he would "vigorously" pressure the Transportation Department to recommend that the Justice Department stop the deal.

Only the Bush Justice Department has the direct power to veto mergers to prevent antitrust conflicts. In general, the White House has been open to mergers in all industries.

With jet fuel prices rising to record levels and a weakening economy threatening to reduce travel spending, airlines may use consolidation as a way to reduce seat capacity and strengthen their pricing power. Some airline analysts believe Bush officials would rather see the industry shore itself up through a wave of mergers than another round of bankruptcies.

But Oberstar said he would use congressional hearings to stir up public opposition on the grounds that any one merger would lead to a domino effect, with one merger following another. In that scenario, he said, smaller markets could get "left out and left behind."

"We could have in a very short period of time, two or three major global carriers," he said.