[Congressional Record Volume 147, Number 33 (Tuesday, March 13, 2001)]
[Senate]
[Pages S2221-S2222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DeWINE (for himself, Mr. Kohl, Mr. Grassley, and Mr. 
        Reid):
  S. 520. A bill to amend the Clayton Act, and for other purposes; to 
the Committee on the Judiciary.
  Mr. DeWINE. Mr. President, I rise today to introduce a bill, along 
with my friend and colleagues Mr. Kohl, Mr. Grassley, and Mr. Reid of 
Nevada, called the ``High-Density Airport Competition Act of 2001.'' We 
are introducing this legislation in an effort to increase and maintain 
competition in the domestic aviation industry. If the traveling public 
is to have access to affordable, quality air service, real competition 
is essential.
  The need for this legislation stems from our belief that the recent 
surge in proposed mergers among our nation's major airlines is a threat 
to competition. Let me explain. Less than a year ago, United Airlines 
and US Airways announced their plans to merge, creating an airline that 
would be nearly 50 percent larger than its next closest competitor and 
a network significantly more extensive than other carriers. Most 
industry observers believed at that time that if the United/US Airways 
merger were allowed to go forward, those airlines would gain a dominant 
position at several key airports throughout the country, including 
airports such as New York LaGuardia and Reagan National airport here in 
Washington.
  At the time the merger was announced, I expressed my concern that 
this merger would provoke further airline consolidation and potentially 
could leave the country with as few as three large domestic carriers. I 
continue to be concerned about additional mergers, and for good reason.
  In early January of this year, American Airlines announced that it 
was joining in the United/US Airways deal by acquiring certain assets 
from US Airways and also by entering into agreements with United, 
including an agreement to jointly operate the lucrative Washington/New 
York/Boston shuttle. So, if the deal is successful, instead of having 
one dominant carrier, our country would face the prospect of having two 
airlines that are significantly larger than their competitors.
  Quite frankly, American Airlines saw the writing on the wall. Its 
leaders understood how difficult it would be to compete effectively in 
an industry where one airline was so much larger and so dominant in 
certain key business markets. As a result, American decided that, in 
order to survive, it had to join the deal and grow much bigger, as 
well.
  If these deals are allowed to go forward, I am certain we will see 
even more consolidations. As policy-makers, we are faced with a 
daunting question: Will the airline industry remain sufficiently 
competitive in the wake of the proposed United and American deals? We 
have concluded that unless action is taken, competition very likely 
will be harmed.
  But we cannot just sit idly by and let competition in this critical 
industry waste away. It is vital that other airlines have the 
opportunity to compete, and a big part of that is having access to 
airports that are essential in a network business, such as the aviation 
industry. Two of these key airports, Reagan National and LaGuardia, are 
subject to government slot controls, which limit the number of take-off 
and landing slots during a day. If the United and American deals are 
permitted, those two airlines will control roughly 65 percent of the 
slots at Reagan National and New York LaGuardia. These are key 
resources that other airlines need reasonable access to if competition 
is to be maintained.
  Simply put, competition is not served if we allow two airlines to 
dominate these airports. More important, consumer interests are not 
served if any airline is permitted to gain such a position through 
mergers. That's why my colleagues and I are introducing the ``High-
Density Airport Competition Act.'' This bill represents one way to 
maintain a competitive environment in the airline industry.
  Specifically, our bill would limit the percentage of slots that large 
national carriers can control at Reagan National and New York LaGuardia 
airports. The legislation would ensure that no single airline gains an 
anticompetitive advantage at these slot controlled airports. It would 
do so by prohibiting any large airline from controlling more than 20 
percent of the slots over any 2-hour period. If such an airline did 
have more than 20 percent of the slots, that airline would be required 
within 60 days to either return the slots to the Department of 
Transportation or sell the slots in a blind auction. This procedure 
would preserve competition by giving all airlines equal opportunity to 
bid for the slots and gain access to these airports.
  Again, our overriding concern is the welfare of the traveling public. 
We have seen, first-hand, the frustration of many travelers about 
service, delays, and high air fares. The answer to those and other 
challenges is not more consolidation. The answer is effective 
competition. We are concerned the airline industry is moving in the 
wrong direction, toward a consolidated industry, away from a truly 
competitive, consumer-friendly environment. That's not good for the 
industry. And, that's certainly not good for consumers. That is why I 
hope my colleagues will join us in support of our legislation. We need 
to move back to real competition in our domestic aviation industry, an 
industry that we all recognize plays a vital role in our Nation and our 
economy.

[[Page S2222]]

  Mr. KOHL. Mr. President, I rise today, with my colleagues Senators 
DeWine, Grassley, and Reid, to introduce the ``High Density Airport 
Competition Act of 2001.'' This legislation is a small but important 
step to promote airline competition during this time of massive 
consolidation in the airline industry. This legislation will prevent 
any large national carrier from gaining a dominant share of takeoff and 
landing slots at either Washington Reagan National or New York 
LaGuardia airports.
  During the last year, we have all witnessed a tremendous 
consolidation in the airline industry. First, last May, United 
announced its planned deal to acquire US Airways. More recently, in 
January, airline consolidation took another great leap forward as 
American announced its plan to acquire TWA, and also its deal with 
United to acquire 20 percent of the US Airways assets. If all of these 
combinations and acquisitions are approved, the result will be that 
American and United will become the nation's dominant airlines, 
controlling about half of the national market. And many believe we are 
not done yet, with press reports that Delta is soon expected to 
announce an acquisition of its own. That would mean three large 
national airlines would dominate 75 percent of the market.
  The problem of airline consolidation is especially acute at the two 
of the nation's four slot-controlled airports, Washington Reagan 
National and New York LaGuardia. At these two vital airports, if all 
these mergers go through as planned, American, United and their 
affiliated and partner carriers will together control nearly two-thirds 
of the slots, leaving little room for competitors.
  Gaining access to slots at these airports is essential for smaller 
and start-up airlines if they are to compete with the giant mega-
carriers, especially after these mergers are completed. Without slots, 
airlines cannot take off or land at these two airports. And access to 
these key airports in New York and Washington, D.C. is essential for 
smaller airlines to build national networks to compete with the large 
carriers. Without that access for smaller airlines, large airlines will 
dominate the nation, grow larger and larger, and bar effective and 
robust competition. To show the importance of just one of these 
airports to the nation's entire air transportation system, the FAA 
recently reported that more than one quarter of the nation's entire 
congestion related flight delays resulted from delays at LaGuardia 
airport alone.
  Our legislation is a simple and effective measure to prevent large 
airlines from gaining a stranglehold on the slots at these two 
airports. It provides that, for any airline with at least a 15 percent 
share of the national market, that airline, and its affiliates, cannot 
control more than 20 percent of the slots at either Washington Reagan 
National or New York LaGuardia in any two hour period. If an airline 
exceeds these limits, it must take one of two steps, either return the 
excess slots to the FAA or sell them in a blind auction to its 
competitors. This blind auction provision will prevent airlines from 
disposing of their excess slots by engaging in ``sweetheart'' deals.
  Our legislation does not reach the other two-slot controlled 
airports, Chicago O'Hare or New York JFK. Slot controls are scheduled 
to be lifted at Chicago O'Hare in June of next year, and are in place 
at New York JFK only from 3 to 8 p.m.
  In sum, our legislation is a carefully crafted and narrowly tailored 
provision which will break the dominance that the large national 
carriers will have at two vital slot-controlled airports, particularly 
if the currently pending mergers are completed as planned. It will 
enable smaller and new carriers to have a fair shot at gaining access 
to these airports, and thus help bring real competition both to 
consumers who travel to and from New York and Washington and to the 
nation's skies as a whole. I urge my colleagues to support this bill.
                                 ______