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Senate committee studies airline competition

WASHINGTON (CNN) -- Decrying proposed airline mergers, representatives of consumer groups and smaller carriers testified before a Senate committee Tuesday in support of a bill that would open up the skies to more competition.

"This legislation could help crack open the dominance of major airlines at hub airports across the country," said Mark Cooper of Consumer Federation of America.

Dubbed the Aviation Competition Restoration Act, the bill "would give the Department of Transportation an increased role in the merger review process and ... ensure that underutilized gates, slots and facilities are available for competitive purposes," said Senate Commerce Committee Chairman John McCain, R-Arizona, a co-sponsor of the bill along with Senator Fritz Hollings, D-South Carolina.

David Neeleman of JetBlue Airways, a small carrier operating out of New York, said competition is the cure for the airlines' customer service problems. "But first," he said, "smaller carries must have the opportunity to compete on a level playing field."

He added, "The answer to many of the problems plaguing the industry is not a reregulation of the industry but rather the capitalist cure known as competition."

Continental Airlines also spoke out in favor of competition.

"Just say no to mergers," said Continental Vice President Glen Hauenstein.

Referring to proposed mergers such as United with US Airways, and American with TWA, Hauenstein said, "These megamergers will be bad for competition and will harm consumers, communities and employees."

He said the two "mega-airlines" created by the mergers would control 60 percent of slots at airports.

"The poor customer service that is characteristic of the current operations of those carriers seeking to merge will look glorious compared to the inevitable service disruptions and even worse customer service that will prevail in the post-merger environment," he said.

In addition to giving more scrutiny to mergers, Cooper said the bill would help promote competition by authorizing the secretary of transportation "to ensure competitive access by eliminating hoarding or underutilizing gates at hub airports."

Senators consider impact of airline mergers
February 7, 2001
Lawmakers: Consumers lose in airline mergers?
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Lawmakers: Airline mergers may harm consumers
February 2, 2001

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4:30pm ET, 4/16

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