[Congressional Record Volume 147, Number 16 (Tuesday, February 6, 2001)]
[Senate]
[Pages S1030-S1031]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      AIRLINE INDUSTRY COMPETITION

  Mr. WYDEN. Mr. President, a key principle of economic competition 
today is that one big merger begets another. Known as copycat mergers, 
these deals are made when the companies that did not merge first felt 
forced to copy the initial merger. If those left behind do not merge, 
then they just can't keep up with the Joneses.
  This morning, I am going to focus for a few minutes on competition in 
the airline industry. I want to begin by saying that when it comes to 
copycat airline mergers, this country has reached the point where there 
are virtually no more cats.
  This weekend, Americans opened their newspapers to learn that Delta 
Airlines, the nation's third largest carrier, and Continental, have 
begun merger discussions. The Associated Press says that Delta and 
Continental don't even really want to merge. But you guessed it--they 
say other major airline mergers might drive them to it.
  The latest round of airline merger reports comes on the heels of the 
proposed United-U.S. Airways merger and American's proposed deals with 
TWA and United.
  In my opinion, if nothing is done in the face of these proposed 
airline mergers, our country is headed down a runway of no return. If 
this lineup of mergers takes off, it will destroy the last remnants of 
competition in the airline history.
  The trend toward concentration in the airline industry did not begin 
in the last few weeks. More than 20 consecutive airline mergers were 
approved in the 1980s.
  I believe much of the problem we are seeing today stems from that 
huge array of airline mergers that took place in the 1980s. In fact, I 
think the merger between TWA and Ozark sets in motion the trend that 
began in the 1980s. I come to the floor this morning to say I believe 
it is time to change course.
  The central problem stems from the fact that the major proponents of 
deregulation have not been willing to simultaneously and vigorously 
enforce the antitrust laws. As a result, our country gets the worst of 
both worlds: dominant companies with a choke hold on the market, and 
nobody setting rules to make sure they don't run

[[Page S1031]]

roughshod over the American consumer--the flying public.
  The Justice Department, which has been run by officials from both 
political parties since concentration in the airline industry 
accelerated, has not fully utilized the antitrust tools at its 
disposal. As a result, I want to make a proposal this morning: Before 
the Justice Department clears one more major airline merger, the 
Federal Trade Commission (FTC) should have to make a public report 
demonstrating that the merger will not have negative long-term 
implications for consumers and the economy. The FTC should dig in, hold 
public hearings to examine these deals, and get to the bottom of the 
long-term consequences of these airline mergers. It is time to make 
sure that these mergers don't strand any more airline passengers with 
too few choices and too many headaches.
  The real question is: Is competition in the airline industry working 
today? In my view, there certainly aren't enough competitive forces in 
the airline industry to force companies to compete now to improve 
service.
  Actually, some of our constituents report to us that they are left 
out on the runway for hours with a glass of water. Is it any wonder 
consumer complaints are at record high levels and some fliers call the 
departure board at our airports the ``delay board''? I think not. I 
think those problems stem from the lack of competition we are seeing in 
the airline sector today. This Congress should not stand idly by while 
a chain reaction of mega-mergers squeezes out whatever competitive 
juices remain in the airline industry. As I make my proposal for 
airline mergers this morning, I want to make clear that I am not one 
who believes that all the mergers taking place in America are bad. Many 
of the mergers our country is watching have not only not been harmful, 
they have been beneficial. They have resulted in more efficient 
companies that ultimately benefit consumers with better service and 
lower prices.

  When it comes to the big airlines, it doesn't look like that's the 
case. These airline mergers seem to permanently reduce competition. So 
I believe it's time for Congress and the executive branch to take a 
time out on airline mergers and assess the long term implications of 
where the airline industry is headed. The shape of the airline industry 
created today is one America will have to live with for a long time, 
and we ought to know what we are getting into. Competition in the 
airline industry is too important to too many people, who fly to 
conduct their business and their personal affairs.
  Slowing up this airline merger frenzy to look at the long-term 
consequences, as I propose this morning, is a modest step that the U.S. 
Congress ought to take now.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Nevada is recognized.
  Mr. REID. I thank the Chair.
  (The remarks of Mr. Reid pertaining to the introduction of S. 249 are 
located in today's Record under ``Statements on Introduced Bills and 
Joint Resolutions.'')
  Mr. REID. Mr. President, I yield the floor and I suggest the absence 
of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I understand we are in morning business 
and I have some time assigned to me; is that correct?
  The PRESIDING OFFICER. The Senator is correct. Under the order, the 
time until 11 a.m. shall be under the control of the Senator from North 
Dakota.

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