Congress Scrutizes Delta-Northwest Merger
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The merger “will be probably the worst development in aviation” since airlines were deregulated in 1978, the chairman of the House Transportation and Infrastructure Committee, James Oberstar, a Minnesota Democrat, said yesterday at a Washington news conference. He vowed that it will undergo “rigorous scrutiny.”
The day after the companies announced their merger, lawmakers said they would hold hearings, supply information to the American Justice Department and ask tough questions of the airlines’ executives. A House task force was the first to schedule a hearing on the combination, for April 24.
The Justice Department will decide whether to approve the agreement by Delta, the third-largest American carrier, to buy Northwest, the fifth biggest, in a $3.63 billion stock deal. Members of Congress plan to use their offices to weigh in.
The Delta-Northwest announcement is a “watershed moment” for aviation, and federal agencies must dig into the details before signing off on it, Senator Rockefeller, the West Virginia Democrat who chairs the Senate aviation subcommittee, said. “Any final agreement must meet the needs of the American people,” he said.
Senator Klobuchar, a Democrat from Northwest’s home state of Minnesota, said she’s “very concerned” that the plan will remove the carrier’s Northwest name and its Eagan headquarters from her state. “I don’t like it,” she said.
“They are looking out for Wall Street and their bottom line,” Ms. Klobuchar said of the two carriers in an interview. “Someone here has to look out for Main Street.” Mr. Oberstar said his panel’s aviation subcommittee may hold multiple hearings on the merger, which he said would spur more consolidation and lead to only three “mega global carriers.”
“There will be more monopoly power at hubs,” Mr. Oberstar said. Low-fare airlines “will not be able to compete,” he said.