Restoring financial regulation of the airline industry will be put before Congress if the Justice Department approves a proposed merger of United and Continental airlines, two key House members said Wednesday.
At a hearing on the merger, Reps. James L. Oberstar, Minnesota Democrat and chairman of the House Transportation and Infrastructure Committee, and Jerry F. Costello, Illinois Democrat and chairman of the panel’s aviation subcommittee, expressed concern about the impact the proposed deal could have on consumers and airline workers.
Deregulation has been credited with making airline travel affordable for the average American. But Mr. Oberstar pointed to the $2.7 billion the airlines earned in baggage fees in 2009 as evidence that consumers are no longer benefiting from the system. He said he thinks there is support in the House for reregulation.
“Hardly a day passes where I don’t walk out on the [House] floor that someone asks me, ’When are we going to reregulate the airlines?’ ” Mr. Oberstar told reporters after the hearing.
The legislation would impose federal regulation of airline pricing and re-establish a government gatekeeper role similar to that played by the old Civil Aeronautics Board prior to deregulation in 1978, Mr. Oberstar said. The board set standards for companies trying to enter the airline market and decided on a case-by-case basis which companies should be granted permission to fly passengers.
The CEOs of United and Continental, who testified at the hearing, complained that competing against a steady influx of low-cost carriers that drive prices artificially low and then go bankrupt has weakened the airline industry.
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