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US Department of Transportation pledges to thoroughly investigate US Airways/United Airlines deal.

AIRLINE INDUSTRY INFORMATION-(C)1997-2000 M2 COMMUNICATIONS LTD

The US Transportation Secretary Rodney Slater has issued a statement regarding the congressional hearings conducted into the proposed acquisition of US Airways by United Airlines' parent company, UAL Corp.

Slater indicated that the Department of Transportation (DOT) would be thoroughly examining the deal 'with the goal of protecting consumers and preserving competition in the airline industry around the country.' The findings will be handed over to the Justice Department, which enforces antitrust laws.

The DOT's review will also look at the new spin-off airline DC Air to ensure the carrier meets the department's standards for economic fitness and safety.

In related news, the leaders of the Senate Judiciary Committee antitrust panel have sent a letter to the Justice Department asking that the merger plan be thoroughly examined because they believe it will 'likely cause anticompetitive problems' in the airline industry.

Senators Mike DeWine and Herb Kohl sent the letter on 14 June and recommended that the federal organisation look not only at the details of the merger itself, but also the ramifications for the whole of the airline industry, particularly the possibility of further mergers between US carriers according to Dow Jones News.

Already American Airlines has indicated that it is interested in merging with either Northwest Airlines or Delta Air Lines, and the Senators believe that such a trend towards industry consolidation could leave the USA with as few as three major carriers.

Meanwhile, the heads of UAL Corp and US Airways have argued at the congressional hearings that the deal is 'pro-competitive under anti-trust laws' and that 'the merger's network synergies will lead to consumer benefits and increased competition.'

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Publication:Airline Industry Information
Date:Jun 15, 2000
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