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via: foxbaltimore.com

Bipartisan letter from Congress warns airlines against merging, report says

A progressive senator and her conservative colleague have reportedly raised concerns about a potential merger of two of the country’s biggest airlines.

Senator Elizabeth Warren, the Massachusetts Democrat, and Utah Republican Mike Lee said in a recent letter to American and United that their potential union could lead to higher airfares and fewer flights, according to The Wall Street Journal. Multiple outlets have reported that United CEO Scott Kirby pitched a merger to the Trump administration earlier this year.

“A combined United-American air carrier would be able to exploit its market power to harm consumers in a number of ways,” the lawmakers wrote.

The National News Desk requested comment from both of the senators and airlines. Only United, which declined, has responded.

Bloomberg reported last week that Kirby told administration officials in February about potentially combining United and American, an account also published by Reuters.

It’s unclear whether the airlines would receive approval from the government, even one with a business-friendly executive branch. There would likely be strong opposition from several groups of stakeholders, including other companies, federal officials and unions. The potential rise in airfare prices may also concern the White House, which is struggling to compete with Democrats’ affordability messaging ahead of the midterm elections.

“It is highly unlikely that this transaction would be approved by regulators,” Les Alexander, a University of Virginia professor with expertise in mergers, said last week. “While the current administration appears to be more accepting of larger business combinations, this would still be a difficult deal for the regulators to approve, given the size and market presence of these large players.”

American also said in a statement on Friday that it wasn’t engaged or even interested in talk about merging with United. Combining the airlines would harm the industry and its customers, American explained.

“While changes in the broader airline marketplace may be necessary, a combination with United would be negative for competition and for consumers, and therefore inconsistent with our understanding of the Administration’s philosophy toward the industry and principles of antitrust law,” American said. “Our focus will remain on executing on our strategic objectives and positioning American to win for the long term.”

Warren and Lee reportedly asked both of the airlines to provide information about discussions they’ve had on a merger by May 3. The senators also requested the companies give them analyses of the potential union's effects on airfares, routes and employees.