PRESS RELEASE
For Immediate Release: February 12,
2014
Contact: Paul Hudson 800-662-1859
AIRLINE PASSENGER GROUP
CALLS FOR TRANSPARENCY
IN AMERICAN-US AIRWAYS MERGER
WITH JUSTICE DEPARTMENT
Washington, DC - FlyersRights.org, the largest airline passenger advocacy organization, has filed comments with the US Department of Justice calling for the release of lobbying, political contribution and negotiating communications that preceded the sudden November settlement of the Obama Administration’s antitrust suit to block the largest airline merger in US history.
Under the
Tunney Act, the US District Court must consider public comments and only give
final approval of the merger settlement if it finds it to be “in the public
interest.”
The law was enacted by
Congress during the Nixon and George W. Bush Administrations to prevent undue
influence by lobbying and political contributions on Department of Justice antitrust
settlements.
FlyersRights.org
President Paul Hudson noted that “The settlement does not meet the basic smell
test as being in the public interest due to massive and secretive lobbying of
the Obama Administration by parties with a financial interest in higher
airfares at the expense of airline passengers.
FlyersRights.org filed a Freedom of Information request which was denied
in its entirety by the Department of Justice.”
“The court
should require full disclosure of the papers leading up to the settlement,
political contributions by those lobbying the Obama Administration to approve
the merger settlement.” (See: Baffling About Face in AA-US Merger -NYT).
The proposed
merger settlement would require sale of some slots at Reagan National Airport
and New York City airports to JetBlue, Southwest and perhaps other airlines, but
would not address or stem concentration of the airline industry.
The merger would create the world’s largest
airline and give four mega airlines (American, United, Delta and Southwest) control over 85% of all domestic flights.
FlyersRights.org
contends, “there is no doubt the proposed settlement
is both unnecessary and will lead to a complete oligopoly in US air
transportation.” It further noted
the airline industry has unique features that make it easy to abuse passengers with
lack of competition including:
1. Exemption
from all state, local and most federal consumer protection laws, due to
court interpretations of the Airline Deregulation Act of 1978.
2. Complete Protection from foreign competition on
domestic routes due to Cold War era national security laws, and with new entrants
not having significant access to foreign capital.
3. Airline
profits at record levels due to prior mergers and lower fuel costs since
2010. American Airlines stock soared an astounding 1,800% for year ending
November 2013 and the average US based airline stock rose 100%. A 50% increase in profits is predicted for
2014 over record 2013 profits, by the International Air Transport Association.
FlyersRights.org concluded:
Competition is the only
protection consumers have against degraded service and higher prices.
Accordingly, the court should require full disclosure of settlement
negotiations and lobbying and hold an evidentiary hearing where passenger
groups can be represented as interveners or amicus parties.
Click here, for Statement on Proposed Merger, by FlyersRights and Aviation Consumer Action Project.
Click here, for comments re: United States v. US Airways Group, Inc. and AMR Corp., No. 1:13-cv-01236 (CKK).
Click here, for FlyersRights' letter to DOJ Antitrust Division.
