February 7, 2001 Contact: Jeanne Lopatto, 202/224-5225
I am pleased that the Senate Judiciary Committee is holding these hearings on the present state of airline mergers and consolidation of the consumer aviation market. I commend the past and likely future Chairman and the Ranking Member of the Antitrust Subcommittee for their leadership and efforts in organizing and holding these hearings. This is an issue that affects all of us and our constituents.
A robust airline industry helps get us from point to point across the country and around the world cheaper and faster. However, recent reports have indicated that increasingly accessible airline travel creates problems such as conveniences: over booked or delayed flights. Therefore, I think it is important at every stage of antitrust inquiry to question "what is the total effect of the competitive market on consumers?" As many scholars have pointed out, including Robert Bork, and Frank Easterbrook, consumer welfare is the touchstone of proper antitrust inquiry and enforcement. Because airline travel is an integral part of people’s lives, we should be particularly mindful of the effect mergers and consolidation in the market could have on consumers. So I believe it is wholly appropriate for us, as representatives of consumers, to ask probing questions when mergers of this magnitude are contemplated, and when a chain reaction of other mergers may follow, magnifying consolidation in the market.
I think it is fair to ask how mergers of this magnitude impact the parity in the marketplace with respect to other market participants. Will other carriers feel compelled to seek out partners in order to compete – or even survive? Will such a domino effect create anticompetitive consolidation? These are issues that are important for antitrust enforcers to consider and for us as policy makers to examine.
We should be mindful of the full effect of these actions on consumers, notably: whether this is the first in a series of new mergers, and whether the new market will be one of robust competition that will get airline passengers to their destinations quicker, cheaper, and more safely. We need to ask the questions now: how much real competition will there be in large hubs after these mergers, and how much real choice in airline service will be available to smaller cities?
As I have said many times before, effective antitrust enforcement today will prevent the need for stifling regulations tomorrow.
I believe these hearings are a helpful step in working towards an equitable marketplace for the aviation industry and better service to consumers.
Again, I want to thank Senators Dewine and Kohl for their leadership in examining these issues within the Judiciary Committee and look forward to the testimony today.
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