Opening Statement of Senator Jean Carnahan
Senate Committee on the Judiciary
Hearing on Airline Consolidation
February 7, 2001

Mr. Chairman, thank you for convening these hearings today.

Like many of you, I have very serious concerns about the potentially adverse impact that consolidation in the airline industry, may have on consumers. Reduced competition may lead to fewer travel options, higher fares and lower levels of service. As such, I think that the recently proposed mergers warrant careful examination for potential antitrust implications.

I also believe, however, while we may be initially inclined to view all of the current airline mergers in the same light, we must recognize a fundamental difference between the American/TWA transaction and the other airline mergers that are currently under consideration. The primary difference with the American/TWA deal is that TWA is a financially distressed firm and cannot be saved or revived without intervention like that proposed by American Airlines.

American Airlines’ acquisition of TWA ought to be considered independently of the other proposed mergers. Absent an offer to purchase substantially all of TWA’s assets --as American has proposed -- the airline would be forced to enter into a piecemeal sale of its assets. Such a scenario would almost certainly result in the loss of more than 20,000 jobs – over 12,000 of them in Missouri

And let me be clear: to me, this is about saving the jobs of over 12,000 Missourians.

I have met with officials of American Airlines and they have assured me that their proposal would mean continued employment opportunities for virtually all of TWA’s employees -- including those employed at TWA’s Kansas City based maintenance facility. American has also committed to continuing to provide retirement benefits to currently retired TWA employees -- including travel benefits. Moreover, American has said that they plan to continue operating a hub in St. Louis -- that hub is critical to maintaining the economic vitality of the region.

TWA remains in a precarious economic situation, in fact, were it not for the $200 million of debtor-in-possession financing that American provided, TWA would not even be operating today. The potentially adverse impact that the loss of jobs and hub service would have on the region underscores the immediacy of the situation. It is critical that this transaction be dealt with swiftly.

Mr. Chairman, as I have said, American Airlines’ proposed acquisition of TWA is wholly separate and unique from the other mergers that are pending. The difference lies in the impact on real people. Many TWA employees are extremely concerned they will lose their jobs if this deal is ultimately disapproved. I will continue to work to promote a solution to TWA’s financial difficulties that will protect the 20,000 employees and their families. At this time, American’s proposal represents the best way to achieve this goal.

I urge the members of this committee to consider these circumstances when evaluating the more general problem of airline consolidation.

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