Baldacci opposes airline merger Plan to blend United, U.S. Airways ‘bad for businesses in Maine’

BANGOR – Voicing concern about the possible negative impact the proposed merger between United Airlines and U.S. Airways could have on Maine and other rural states, U.S. Rep. John Baldacci Friday called the proposal “bad for consumers and bad for businesses in Maine.”

At a press conference in Bangor, Baldacci, D-Bangor, outlined several steps he has taken to oppose the merger idea, which became news last May. Baldacci’s position received muted support from Bangor officials, who are unsure of the impact the merger would have on Bangor International Airport.

In strong words, Baldacci said merging the two airlines into the nation’s largest public carrier “will result in higher fares, less competition and a lower level of service.” An attitude of “merger mania” is developing which “will hurt our efforts to maintain and attract jobs in the state,” Baldacci said.

Attending the Friday afternoon press conference was Lee Umphrey, director of community and government relations for the city of Bangor. Umphrey handed out a press release that expressed muted support for Baldacci’s stand on the merger issue. Questioned about the understated press release,

Umphrey later said his presence at the press conference signaled the city’s support for the “larger issues” discussed by Baldacci.

The gigantic merger proposal would create an airline in control of more than 25 percent of the marketplace, according to information from Baldacci. Approved by shareholders last fall, the deal is before the U.S. Department of Justice for consideration. While the proposal has stalled at the federal government level out of concerns about a monopoly and negative effects on smaller areas, the idea has garnered support.

City Manager Ed Barrett later said in a telephone interview that Bangor had actually discussed the merger of United Airlines and U.S. Airways as an opportunity to get the flight service to come into Bangor International Airport.

Barrett said the city “hasn’t fully analyzed” the implications of the merger, though Bangor supports broad competition in the airline marketplace. Despite conflicting ideas in his home city, Baldacci is forging on with his mission. He said he has written to Attorney General John Ashcroft urging him to oppose the proposed merger.

“I am greatly concerned that the merger will substantially reduce competition, particularly in the Northeast,” Baldacci wrote in an April 4 letter to Ashcroft. Baldacci wrote, “we seem to be headed down a road to ‘merger mania’ which will ultimately leave us with only a handful of megaairlines, leading to an anti-competitive … market.”

Stressing the need to carefully review all such proposals, Baldacci said he also is co-sponsoring a bill calling for a one-year moratorium on airline mergers. In addition, he is calling for another round of hearings to evaluate the impact mergers would have on under-served markets.

“I am asking to meet with the representatives of all the airlines to see what we as Maine citizens can do to work together to improve service to Maine,” Baldacci said.

The $11.4 billion merger proposal would operate out of Reagan National Airport in Washington, D.C., and would have megahubs in Chicago, Philadelphia, Dulles and Charlotte, N.C. “Such a high concentration of hubs serving the east coast will likely lead to one being eliminated. The purpose of this merger is to reduce costs – the best way to do that is to get rid of a hub,” Baldacci said. The Maine representative also expressed concern the merger would eventually result in higher airfares.

“At the precise time when airline service is deteriorating, with more delayed and canceled flights, more lost luggage, more passengers being denied seats and passenger complaints at an all time high, more mergers are not the answer,” Baldacci said.

While he is not calling for re-regulation of the airline industry he is calling for “good, old-fashioned competition” to solve airline-public service problems, Baldacci said.

The city of Bangor “joins with Rep. John Baldacci in his concerns over the quality and availability of air service in Maine and in Bangor,” Umphrey said in his press release. “The city has worked with Baldacci and Sens. Olympia Snowe and Susan Collins to improve air service to Bangor with the result that Pan American Airways has come to Bangor International Airport and service has been expanded by U.S. Airways and American Airlines,” Umphrey stated.

The proposed merger apparently would have little immediate impact on Bangor. United Airlines currently does not serve the River City and U.S. Airways runs small express carriers to and from BIA.

The merger might provide Bangor passengers with access to the nationwide United Airlines route system and might provide some domestic travel improvements locally, but “we appreciate and understand the larger concerns” expressed by Baldacci “and fully support the maximum possible level of airline competition,”” Umphrey said.