[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. Res. 344 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
S. RES. 344

 Expressing the sense of the Senate that the proposed merger of United 
 Airlines and US Airways is inconsistent with the public interest and 
 public convenience and necessity policy set forth in section 40101 of 
                     title 49, United States Code.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 26, 2000

    Mr. McCain (for himself and Mr. Gorton) submitted the following 
 resolution; which was referred to the Committee on Commerce, Science, 
                           and Transportation

_______________________________________________________________________

                               RESOLUTION


 
 Expressing the sense of the Senate that the proposed merger of United 
 Airlines and US Airways is inconsistent with the public interest and 
 public convenience and necessity policy set forth in section 40101 of 
                     title 49, United States Code.

Whereas, in 1999, the 6 largest hub-and-spoke airlines in the United States 
        accounted for nearly 80 percent of the revenue passenger miles flown by 
        domestic airlines;
Whereas, according to Department of Transportation statistics, a combined United 
        Airlines and US Airways would result in at least 20 airline hub airports 
        in the United States where a single airline and its affiliate air 
        carriers would carry more than 50 percent of the passenger traffic;
Whereas the Department of Transportation and the General Accounting Office have 
        documented that air fares are relatively higher at those airline hub 
        airports where a single airline carries more than 50 percent of the 
        passenger traffic;
Whereas a combined United Airlines and US Airways would hold approximately 40 
        percent of the air carrier takeoff and landing slots at the 4 high 
        density airports, even taking into account the parties' planned 
        divestiture of slots at Ronald Reagan Washington National Airport;
Whereas most analysts agree that a United Airlines-US Airways merger would lead 
        to other mergers in the airline industry, likely resulting in 
        combinations that would reduce the 6 largest domestic hub-and-spoke 
        airlines to 3 airlines;
Whereas media reports indicate that American Airlines has made a tangible offer 
        to purchase Northwest Airlines and that Delta Air Lines and Continental 
        Airlines have engaged in merger negotiations;
Whereas it would be difficult for the Department of Transportation and other 
        responsible Federal agencies of jurisdiction to disapprove subsequent 
airline merger proposals if the government allows the largest domestic 
airline, in terms of total operating revenue and revenue passenger 
miles flown in 1999, United Airlines, to merge with the sixth largest 
airline, US Airways, making United Airlines substantially bigger than 
its next largest competitor;
Whereas 3 larger domestic airlines will have substantially increased market 
        power, and would have the ability to use that market power to drive low 
        fare competitors out of direct competition and to thwart new airline 
        entry into the marketplace;
Whereas the Department of Transportation credits nearly all of the benefits of 
        deregulation (a reported $6.3 billion in annual savings to airline 
        passengers) to the entry and existence of low fare airline competitors 
        in the marketplace;
Whereas a combined United Airlines and US Airways, including their commuter 
        airline partners, would be the only carrier offering nonstop flights 
        between at least 26 domestic airports in 12 States;
Whereas, in 1999, United Airlines and US Airways enplaned 22 percent of all 
        revenue passengers flown by domestic airlines;
Whereas the transition from 6 major airlines to 3 would likely result in less 
        competition and higher fares, giving consumers fewer choices and 
        decreased customer service;
Whereas it is the role of the Senate Committee on Commerce, Science, and 
        Transportation and, more specifically the Subcommittee on Aviation, to 
        conduct over-sight of the aviation industry and to promote consumers' 
        receiving a basic level of airline customer service;
Whereas the Air Transport Association member air carriers agreed to an Airline 
        Customer Service Commitment to improve the current level of customer 
        service in the airline industry;
Whereas, in an interim oversight report, the Department of Transportation 
        Inspector General recently concluded that the results are mixed with 
        respect to the effectiveness of the efforts of the major airlines to 
        implement their Airline Customer Service Commitment;
Whereas the combination of 2 entities as large as United Airlines and US Airways 
        could cause at least short-term disruptions in service; and
Whereas, according to the Department of Transportation statistics for the month 
        of May 2000, for the 10 major airlines, a combined United Airlines and 
        US Airways would have had the lowest percentage of on-time flight 
        arrivals, the highest percentage of flight operations canceled, the 
        second highest rate of consumer complaints, and the second highest rate 
        of mishandled baggage: Now, therefore, be it
    Resolved, That--
            (1) The Senate expresses concern about the proposed United 
        Airlines-US Airways merger because of its potential to leave 
        consumers with fewer travel options, higher fares, and lowered 
        levels of service; and
            (2) it is the sense of the Senate that the potential 
        consumer detriments from the proposed United Airlines-US 
        Airways merger outweigh the potential consumer benefits.
                                 <all>