Senior lawmaker to fight air mergers

By John Crawley

WASHINGTON (Reuters) - A senior House of Representatives Democrat influential on aviation matters said on Wednesday he plans to build a strong case against airline mergers if one or more consolidation proposals materializes.

Rep. James Oberstar of Minnesota, chairman of the Transportation Committee, also told the Reuters Regulation Summit here that he is preparing to give regulators and antitrust officials the "long view" on congressional concerns and what a series of mergers could do to service, fares and consumer choice.

"I am concerned the (Transportation Department) will not raise its voice here and they should. And for the Justice Department, I think we have to give them the longer view while they consider (one) proposal," Oberstar said.

Oberstar previously confirmed Minnesota-based Northwest Airlines NWA.N was in talks with Delta Air Lines (DAL.N), but said that he had no information on the progress of those discussions.

Industry experts have suggested the two may be nearing a deal and the Wall Street Journal reported late on Wednesday a proposal could be made as early as next week. The Journal also said that preliminary talks between United Airlines (UAUA.O) and Continental Airlines (CAL.N) have grown more serious.

Oberstar is convinced that if Delta and Northwest move forward, others will follow.

"If we allow the creation of a global mega-carrier, the others cannot stand still to defend their market share, to defend their market interests. They too will have to undertake merger talks and ventures," Oberstar said.

Only the Justice Department can block a merger over competition concerns, but Congress can pressure antitrust officials, regulators and the companies themselves if lawmakers do not favor a deal. Congress did just that in 2001 when United's bid for US Airways (LCC.N) fell through and last year when Delta fended off a hostile attempt by US Airways.

"We can build a pretty strong case. We did that in previous unconsummated merger proposals. I don't have all that data together yet but I think we'll be in a good position," Oberstar said.

Thomas Barnett, the Justice Department's assistant attorney general for antitrust, would not discuss specific scenarios at the Reuters summit but promised a thorough review of one or more airline proposals.

Barnett said he does not prejudge the potential competitive impact of merger bids and would not estimate how long it would take to reach a decision with 11 months remaining in the Bush administration.

He did say, however, that the Justice Department would "handle whatever is put before us" in the time that remains before the Bush administration ends its term in January -- even multiple airline proposals.

"If you have more than one transaction pending in the same industry there are some synergies and efficiencies. Issues can overlap, information can overlap," Barnett said.

"We're committed to reviewing mergers as quickly as we can. We'll shift resources and do what's necessary to get it done."

(For summit blog: summitnotebook.reuters.com/)

(Reporting by John Crawley, editing by Richard Chang)