* Fewer flights to smaller cities possible -CEO
* CEO says "doesn't mean to sound threatening"
By Diane Bartz
WASHINGTON, June 19 Forcing a combined American
Airlines and US Airways Group to surrender
slots at Reagan National Airport would risk fewer flights to
small and medium-sized cities, US Airways CEO Doug Parker told
lawmakers on Wednesday.
Parker was testifying to a Senate subcommittee on the impact
of the proposed merger of the two airlines.
Servicing larger cities is more profitable and thus the
airlines, which together have two-thirds of the take-off and
landing slots at Reagan National, near Washington D.C., would
cut service to smaller cities if the Justice Department or
Transportation Department required divestitures as a condition
of the deal, he said.
"This doesn't mean to sound threatening. We want to fly to
these communities," Parker told the Senate Commerce Committee's
subcommittee on Aviation Operations, Safety and Security.
US Airways announced on Feb. 14 that it planned to buy the
struggling carrier to create an $11 billion airline that would
be the largest in the United States. The companies hope to
complete the deal by the end of September.
Antitrust experts have said the Justice Department could
request divestitures of some slots at Reagan National and a
small number of other airports. Outside these hubs, the carriers
fly different routes, for the most part.
The nonpartisan U.S. Government Accountability Office said
in a report issued on Wednesday that the two airlines overlapped
on 12 non-stop domestic U.S. flights, and that there were no
competitors on seven of them.
At Reagan National, the new airline would have 68 percent of
slots, far above Delta Airlines with 12 percent, United
Airlines with 9 percent and the 11 percent held by other
airlines, the GAO said.
Senators Maria Cantwell of Washington state, Democratic
chair of the subcommittee, and New Hampshire's Kelly Ayotte, the
top Republican, worried about the loss of service to smaller
cities. Cantwell noted possible follow-on economic losses for
those cities and surrounding communities if flights are cut.
West Virginia Senator Jay Rockefeller, chair of the full
Commerce Committee, also expressed concern.
"Other airline CEOs have repeatedly promised that merging
their airlines would lead to more choices for travelers in small
and rural communities. I have found that not to be the case, at
least in West Virginia," he said in a statement.
In late May, more than 100 members of Congress asked U.S.
regulators to allow the new American to keep all the slots at
Reagan National. The airport is used by many members of Congress
to travel to and from their home districts.
The U.S. airline industry has seen five years of rapid
consolidation. Delta acquired Northwest Airlines in 2008, United
merged with Continental in 2010 and Southwest Airlines
bought discount rival AirTran in 2011.
With fewer carriers competing, ticket prices have risen. The
average fare rose about 8 percent to $375 in the third quarter
of 2012, compared with $346 in 2008, according to the U.S.
Bureau of Transportation Statistics.
AMR filed for bankruptcy in 2011 and initially opposed a
merger, but agreed to explore one under pressure from creditors