Saying he has grave concerns about the Department of Justice’s decision to block a proposed $11 billion merger between American Airlines and US Airways, Rep. Michael C. Burgess, R-Texas, has written a letter to Attorney General Eric Holder expressing support for the deal.
Burgess sees Justice’s decision as needless government intervention in the free market.
“This kind of intrusion is unacceptable and will cause severe harm to two airlines and tens of thousands of their employees,” he wrote in the Sept. 3 letter. “Further, the DOJ’s position is wholly incorrect; the merger does not violate anti-trust laws, and in fact, the merger will create more choices for Americans at a lower cost.”
He goes on to argue that the Justice Department can’t justify blocking a merger between American and US Airways because of two large merger deals completed recently. One of the government’s arguments is that there is too much route overlap between American and US Airways, but Burgess noted that deals between Delta and Northwest and Southwest and AirTran were completed even though there was at least same amount of overlap among the carriers involved.
“The claim by the DOJ that makes the least sense is that American Airlines and US Airways are doing fine without the merger,” he wrote. “In essence, DOJ believes that since entering bankruptcy, American Airlines has adopted a business model that makes them competitive again and therefore, the merger is unnecessary.”
Burgress said this line of thinking changes the rules of the game, and he asked, “Since when is the standard for violating anti-trust laws whether it makes financial sense for the companies to do so?”
He concluded that Justice is butting its head into a business decision that doesn’t concern them or is possibly looking to make up for past anti-trust missteps by making an example out of American Airlines and US Airways.
“The baseless claims by the DOJ give rise to a peculiar and arbitrary challenge to this merger,” he wrote. “It seems that DOJ is trying to remedy past mistakes when it did not challenge former mergers by punishing American Airlines and US Airways for its previous inactions.” – Jon Ross
Texas congressman castigates DOJ for airline merger opposition
