The proposed buyout of US Airways by United Airlines' parent UAL Corp. may be a good thing for consumers, and then again, it may not. That's why we think it's prudent the air merger faces intense inspection by the Justice Department.
Some congressmen, travelers' advocates and industry analysts are afraid the deal could set off a wave of mergers among other major airlines that would inhibit competition, weaken service and result in higher fares for passengers.
For example, Sen. Mike DeWine, R-Ohio, chairman of the Senate antitrust subcommittee, and Herb Kohl, D-Wis., penned a letter to Justice that said the sale could lead to "decreasing competition" and potentially higher fares if the sale was approved.
United's planned $11.6 billion purchase of U.S. Airways has spawned several hearings on Capitol Hill. We think this proposal needs plenty of oversight by congressional committees and we think labor unions also should be wary of the proposal. United's own pilots are opposed to the merger. Their union says the airline hasn't properly assured its members of job security should the deal be approved.
Sen. Rick Santorum, R.-Pa., saw some positive indicators in the sale, but wanted a commitment from United that 2,270 maintenance jobs at Pittsburgh International Airport wouldn't be shifted to United's maintenance facility in Indianapolis. And other legislators are likely concerned about the economic effects at other U.S. Airways hubs.
However, we think the impact on smaller, regional airports needs to be the prime focus of any hearings on the matter. If the sale results in less competition, cutbacks in service, or even steeper prices for passengers who fly out of facilities such as Benedum Airport, we hope the deal is sent to the scrap heap.
Big business often ignores the small guy when planning mergers for the sake of efficiency and higher corporate earnings. Sometimes legislation is needed to protect the consumer and sometimes buyouts simply need not be approved.
Today's editorial is a reflection of the opinion of the Exponent editorial board, which is comprised of James G. Logue, Kevin S. Courtney, Patrick M. Martin, Matt Harvey, Nora Edinger and J. Cecil Jarvis.