JUSTICE URGED NOT TO COMPROMISE OVER UNITED-U.S. AIRWAYS MERGER

JUSTICE URGED NOT TO COMPROMISE OVER UNITED-U.S. AIRWAYS MERGER    Rep. James Oberstar, the ranking Democrat on the House Transportation and Infrastructure Committee, urged the U.S. Department of Justice to refrain from taking a compromise approach to the proposed United Airlines-U.S. Airways merger.
   Oberstar referred to speculation that Justice’s antitrust division is considering a compromise under which the department would not object to the merger if the proposal were changed to require divestitures of additional assets and/or to impose limitations on post merger operations. “I strongly urge you not to take this approach,” Oberstar said in a letter sent to acting assistant attorney general Doug Melamed.
   Such a compromise would not remove a major problem, namely, that such a large merger would trigger other airline mergers in the United States, and reduce the airline industry to three mega-carriers with worldwide networks, Oberstar said.
   American Airlines and Delta would be threatened to such an extent that they would feel impelled to expand their own operations under a merger, Oberstar said.
   If U.S. Airways' network were added to United’s the post-merger carrier would have 65 percent revenue than American, Oberstar said. “I would note that United is already the nation’s largest carrier with systems revenues of almost $2 billion a year more than American,” Oberstar said.
   Oberstar urged the Justice Department to follow the example set by the U.S. Surface Transportation Board when it declared a moratorium on additional rail road mergers so that the agency could form a new policy that will take into consideration the downstream effects mergers would have on the U.S. rail industry.