Judiciary Hearing on Airline Consolidation
Thank you Chairman DeWine and Ranking Member Kohl for allowing me to speak today on an issue that is very important to me. As you may know, I have introduced two pieces of legislation specifically to protect the American air traveler. I look forward to work with the committee so that we may give the consumers a choice of an airline and decent airfares.
I am here today because I am deeply concerned with the increase in airline merger proposals. Many have predicted that if the mergers continue, we will soon have an industry dominated by three, two and essentially one carrier.
Since deregulation, more than fifty airlines have been acquired or merged. For instance, in my own state of Nevada, the Reno-Tahoe International Airport lost flights when Reno Air was purchased by another airline. Flights were then reduced significantly and now it is harder for people to fly in and out of the Reno and Lake Tahoe areas.
If this merger frenzy continues, we could end up with only three airlines in America. That could drive prices "sky high" and cut the number of available flights, to the detriment of the American consumer. The purpose of deregulation was to ENCOURAGE competition. Evidence seems to suggest a reduction in competition.
On January 29th I introduced the "Airline Competition Preservation Act "(S. 199) to address airline consolidation and the "Air Travelers Fair Treatment Act’(S. 200) to address the common problems of air travel such as flight delays, right to exit aircraft, right to in-flight medical care. We must protect the American air traveler by safeguarding a competitive airline industry. We should take our time and look into these airline deals thoroughly, and determine their long term impact. We must maintain as much competition as possible in the airline industry.
Mr. Chairman, my bill will take effect and give the transportation secretary authority to step in if a consolidation or merger occurs between two or more of the top seven airline carriers, or if three or fewer of those air carriers control more than 70% of domestic revenue passenger miles.
Highlights of my Airline Competition Preservation bill are as follows:
• Protects against unreasonably high airfares.
• Prevents unfair practices against new entrants.
• Encourages increased competition at hubs.
We are at a critical juncture for the future of a competitive airline industry. The inescapable lesson of 22 years of deregulation is that mergers and a reduction in competition often lead to higher fares for the American traveling public. We cannot stand idly by and allow the benefits of deregulation to be derailed by a wave of mergers.
No one wants the federal government to micro manage private industry. But our airways are not just a private industry - they are a public trust. People need to be able to fly across our vast nation – to do business, to see family members, and to enjoy their lives. If these mergers proceed without the competitive protections I am proposing, then the ultimate irony of deregulation will be that we will have traded government concern for the public interest, for private monopoly control in the interests of the industry.