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March 8, 2001
ROCKEFELLER PRESSES FOR UNITED-US AIRWAYS MERGER TO GO FORWARD
Senator Makes Case to Secretary of Transportation
WASHINGTON – Recognizing the benefits to small states, U.S. Senator Jay Rockefeller (D-WV) today pressed Transportation Secretary Norman Y. Mineta to support the United-US Airways merger saying that the deal was imperative to the economy of West Virginia and other smaller, rural states.
Rockefeller made his case to the Secretary as he was being lobbied by other members of Congress to delay approving the merger.
Following their conversation, Rockefeller sent a letter to Secretary Mineta outlining the reasons why the merger should go forward expeditiously.
The 2-page letter is attached.
March 8, 2001
The Honorable Norman Y. Mineta
United States Secretary of Transportation
400 7th St., SW
Washington, DC 20590
Dear Mr. Secretary,
I enjoyed our discussion today and wanted briefly to reiterate some of the most important points from our conversation about the proposed United-US Airways merger.
As you know, there is a wide disparity of views on the merger among my colleagues in the Congress. I count myself firmly among the supporter’s of this merger because of the opportunity it offers the people and the economy of my home state of West Virginia, and other rural states and small communities across the nation.
In my view, the proposed merger is important to small states for four simple reasons:
• Gradual failure at US Airways will mean a slow death for small community air service. US Airways and various independent analysts have said clearly that this carrier cannot grow in its current structure. US Airways is considered by many to be a vestige of another era in aviation, with the cost structure of a major airline but the route and fleet structure of a regional carrier. I appreciate that US Airways stayed in West Virginia and other small communities in the East after airline deregulation, when nearly every other carrier abandoned us, but their poor, unreliable service and high fares have been depressing rural markets for many years. If US Airways is not permitted to merge with another carrier and instead slowly deteriorates toward bankruptcy, air service in these communities will go from bad to worse. We’ll lose a flight here and a small city there, and when it comes time for this next airline bankruptcy, we won’t have anything left to salvage.
• The smallest of the small cities get more competition. Competition in this merger must be considered on a market-by-market basis, and while competition at the hubs certainly has far-reaching effects, the factors for and against competition in rural areas are too often overlooked. In West Virginia, for example, the cities now served by US Airways will affirmatively gain competition. With DCAir/American flying to Reagan National, and United picking up Pittsburgh, Philadelphia, and Charlotte, very small West Virginia cities will now have two carriers instead of one, or three instead of two. In a small city with limited air service this kind of opportunity comes along very, very rarely, and can be an important economic engine.
• Small cities are guaranteed to receive continued service during a period of industry turmoil. As part of the merger proposal, United has committed to keep all small city service for at least two years, and DC Air has committed continued service for that period and beyond. While there are no guarantees in the very long-term, these two-plus years are far more than US Airways can either promise or fulfill under the status quo. Service guarantees give us a fighting chance to make it through the difficult parts of the now unavoidable transition from turbo-props to regional jets in tough rural markets.
• DC Air offers small cities both regional jets and focused marketing. DC Air is committed to bringing regional jets to all of its markets within just a few years and is truly focused on building a highly successful regional carrier. Such direct attention and marketing may sound silly or basic to those representing the bigger airports, but in rural areas we know what a difference it can make to work with a company that will act as our partner. Moreover, without DC Air’s guarantee of continued service to all cities now served by US Airways, any auctioning of slots at Reagan National Airport will have one plain result – cutting off some rural cities from the nation’s capitol.
Finally, I would add with regard to proposed merger legislation my basic belief that Congress should not be changing the rules at this late stage of the game – and that the case has not yet been made that the airline industry should be subject to a unique or higher merger standard than any other critical industry. The Department of Justice and the Department of Transportation have the experts and the legal authority to review this merger, approve or disapprove it, put conditions on it or not. Congress should let the Department of Justice do what it does best – enforce and apply the anti-trust laws – and focus on what we are charged to do – develop policies and incentives to address any resulting problems in the marketplace.
We must work on the continuing problems of rural air service and for new and better ways to facilitate start-ups and regional carriers. But let’s leave complex airline mergers and anti-trust rulings at the Departments of Justice and Transportation, where by law they belong.
Norm, this is an enormously important issue to my state and to the nation. I thank you again for giving it your full attention. As always, best wishes.
Sincerely,
John D. Rockefeller IV
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