The Hill News

The Department of Justice's decision Friday to approve the merger of Continental and United Airlines shows Congress needs more authority over airlines to prevent further consolidation at the expense of consumers, according to House Transportation Committee chairman James Oberstar (D-Minn.).

Oberstar has been a harsh critic of the proposed merger; at a June hearing he accused the companies' executives of hating competition and attempting to dominate the market. In a statement issued Saturday he indicated he will follow through on his promise to seek re-regulation of the airline industry in response to the deal.

"When Congress deregulated the airlines in 1978, we were promised better service, added competition, and more choices for consumers. With the United-Continental merger, our domestic carrier fleet will have shrunk to four network carriers," Oberstar said. "Can a US Airways-American Airlines merger be far behind?"

Oberstar said consolidation in the airline industry usually leads to fewer choices, reduced levels of service and increased prices. He also said lawmakers in 1978 did not foresee a global airline market dominated by three international alliances.

"That runs directly counter to the promise of deregulation. I believe it may be time for Congress to rethink its vote in 1978," Oberstar said.

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