The Regulatory Reform, Commercial and Anti-Trust Law subcommittee of the House Judiciary Committee is holding a hearing on the merger between American Airlines and US Airways on Tuesday.
This hearing will examine the proposed merger's effects on competition and consumers in the airline industry.
Scheduled attendees include:
- Mr. Stephen Johnson, Executive Vice President for Corporate & Government Affairs, US Airways
- Mr. Gary Kennedy, Senior Vice President & General Counsel, American Airlines;
- Mr. Kevin Mitchell, Chairman, Business Travel Coalition, Inc.;
- Professor Christopher L. Sagers, Cleveland-Marshall College of Law; and
- Dr. Clifford Winston, Ph.D., Senior Fellow, Economic Studies, The Brookings Institution
It is the first hearing of the year for the subcommittee.
American Airlines and US Airways sent out a press release announcing the prepared remarks from their representatives. They are included below.
We wanted to let you know that today, Gary Kennedy, Senior Vice President, General Counsel & Chief Compliance Officer, AMR Corporation and American Airlines, and Stephen Johnson, Executive Vice President, Corporate and Government Affairs, US Airways, will be testifying before the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law on why the combination of American Airlines and US Airways represents the best path forward for the stakeholders of both companies. In their testimony, Mr. Kennedy and Mr. Johnson highlight the significant benefits inherent in this merger.
In his prepared remarks, Mr. Kennedy discusses how the merger will create value for all stakeholders:
"This transaction will give us the opportunity to become a stronger competitor, one with a degree of financial stability that we have not experienced in many years. We will be a company that is better positioned to deliver for customers and its people. This transaction is unique in that it is endorsed by all of our labor unions and embraced by the management and boards of both companies."Mr. Johnson's prepared remarks focus on the significant benefits of the merger for customers:
"By providing our customers with a broader network, more choices and better service, the combination of American and US Airways will give passengers a stronger competitive alternative to Delta/Northwest and United/Continental… System wide, American Airlines serves 130 cities not served by US Airways, 48 of which are within the United States. Similarly, US Airways serves 62 cities not served by American Airlines, 48 of which are within the United States. By linking these destinations through our hub airports, the New American Airlines will give passengers new and improved online connecting options to get to the places they want to go, when they want to go. The result will be an airline that will have the most service across the Eastern and Central regions of the United States, and an expanded presence and stronger network in the Western United States… The new network will also enhance oneworld as a competitive alternative to other international airline alliances. By adding US Airways and its depth of service to the oneworld alliance, international travelers will have more options."Mr. Kennedy also highlights how the combined company's expanded network will improve service and position the new American to further invest in new products and services:
"Of the more than 900 domestic routes flown by the two carriers, there are only 12 overlaps… The combination will make our company a much stronger competitor against the other large airlines. Consumers will have three strong, healthy global network carriers from which to choose, as well as a number of low cost carriers… The new American will have the financial strength to invest the resources needed to improve the customer experience, including new aircraft, cutting edge products and services, and the technology and tools designed to help our employees deliver superior service to our customers."Mr. Kennedy's perspective is consistent with a recent report from PwC, which concluded that airline mergers have not caused significant increases in fares or resulted in drastic reductions in competition.
Finally, Mr. Johnson explains what the merger means for employees:
"The financial stability of the combined company will also provide very significant benefits to our employees including better pay and benefits and a path to compensation that is equal to that of their counterparts at Delta and United; more jobs and greatly improved job security; and better opportunities for advancement."
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