BTC members urged to back calls for airline merger analysis

The Business Travel Coalition is urging members to back its call for more detailed analysis of US airline mergers.

The lobbying body says it is not opposing the American Airlines-US Airways merger but it feels the move from six major network airlines to possibly three needs to be properly evaluated.

It also says any study should assess the competitive structural impact arising from removal from the market of low-fare maverick Air Tran by Southwest Airlines.

The BTC is asking for more signatories for its letter to U.S. Attorney General Eric Holder and Transportation Secretary Ray LaHood.

The letter, detailed below, will be given to regulators later today in time for a hearing on the merger conducted by US Senate on the Judiciary, Antitrust, Competition Policy and Consumer Rights Sub committee.

THE BTC says the public-policy deliberation has implications for corporate, university and government travel managers, TMCs and other industry participants in and outside of the US.

A number of major companies have already signed the letter including International SOS, GlaxoSmithKline, Association for Airline Passenger Rights, Amadeus IT Holding SA, Cresta World Travel, STA Travel, Atlas Travel, Pro Travel International, Inc., A & I Travel Management, Inc.

Members are asked to register their support here.

The letter reads: "Dear Attorney General Holder and Secretary LaHood:

"The undersigned members of the Business Travel Coalition write to you regarding the proposed merger between American Airlines and US Airways. We are not advocating blocking the merger, at this time.

"Rather, in reducing from 6 major network airlines to possibly three, over a brief period of airline industry history, it is imperative to broaden and deepen the antitrust review beyond relevant markets and overlapping routes.

"There is a unique opportunity and need to conduct a thorough forensic postmortem evaluation of the supportive analyses, projections and promises regarding the then proposed Delta-Northwest and Continental-United mergers consummated in 2008 and 2010 respectively.

"A study should also assess the competitive structural impact arising from removal from the market of low-fare maverick AirTran by Southwest Airlines.

"Such an analysis would provide visibility to the actual outcomes versus the projected efficiency gains of those two mega mergers. Forward-looking insight would thereby be acquired with respect to claimed efficiencies in this current merger proposal that would be required to offset negative competitive and consumer impacts.

"Moreover, a merger-approval decision would be informed by understandings gained regarding prospective coordinated effects, monopsony power, pricing opacity and the lessoning efficacy of low cost carriers as marketplace discipliners as well as required structural remedies, were it determined that the proposed American-US Airways should be approved.

"We attach for your perusals a White Paper on this proposed American-US Airways merger jointly produced by Business Travel Coalition and the American Antitrust Institute, see here. There is one legislative remedy in the White Paper that we seek to call your attention to and that we would ask you to consider in your reviews.

"In order to address an increasing imbalance in market power between airlines and consumers, and to address the complete absence of any private right of legal action at the state or federal levels, you might consider recommending or supporting Congressional legislation containing a minimum set of national consumer protections, enforceable at the state level.

"This would offer modernized structural consumer protections against substantially reduced competition while avoiding burdening airlines with a patchwork of state consumer protection laws. These protections would be designed not to replace but to compliment DOT’s existing authority in this area."