SCRUTINIZE AIRLINE TAKEOVER

A higher bid this week from US Airways Group for Delta Air Lines Inc. will be tempting for Delta’s creditors, but it is a bad deal for passengers, especially those who depend on medium or small airports. The Senate’s Commerce Committee has a hearing planned later this month to review the state of the airline industry. It’s a perfect time for Congress to look hard at the likely effects of this deal and to raise concerns with the Departments of Justice and Transportation.

The new offer from US Airways reportedly would increase its bid by almost 20 percent to $10.4 billion. Delta itself last month outlined a five-year plan to emerge from Chapter 11 bankruptcy that could be worth approximately what US Airways is offering, but the Delta plan rests on good intentions; the US Airways plan is cash. That might sound good to creditors, who could get 70 percent of allowed claims, but it should worry anyone who depends on airports such as Bangor’s.

Someone has to pay for this takeover, and the more it costs, the more that must be made up. Any reductions in service can be expected to come at the expense of the least-profitable routes, and that’s from airports flying less-than-full planes to hubs.

The Commerce Committee, which includes Sen. Olympia Snowe, should have an even broader concern. As the number of major airlines falls, those remaining may obtain near-monopoly status in some states. Of six airports in Maine with air-carrier service, four rely solely on US Airways and, after a takeover, the remaining two, in Portland and Bangor, would be dominated by US Airways. Congress approved airline deregulation in 1978 to promote head-to-head competition at major hubs. When the Government Accountability Office looked at this a couple of years ago, it found instead the major airlines have divvied up the hubs, then used their clout to keep upstart carriers at bay.

Back then, when US Airways was discussing a similar merger with United Airlines, Sen. Snowe said that “changes in the industry must be scrutinized through the prism of the impact deregulation has had thus far on service to rural areas, like Maine, and the impact so-called ‘megamergers’ may have in the future.” That hasn’t changed since, except that trying to attract service to small airports has grown even more difficult.

Another element of deregulation often forgotten is that it was supposed to come with increased scrutiny by Justice and Transportation. The Senate committee should ask both to look at the proposal carefully to ensure that it maintains competition and avoids harming airports through loss of service. An aggressive review may be this region’s best chance of retaining its current level of air service.