Oberstar voices concerns about Southwest acquisition of AirTran
U.S. Rep. Jim Oberstar (D-Minn.), chairman of the House transportation and infrastructure committee, wrote a memo to the U.S. Justice Department asking its antitrust division to "subject the proposal by Southwest Airlines to acquire AirTran Airways to the most rigorous scrutiny."
Southwest on Sept. 27 announced its proposed deal to acquire AirTran. Oberstar, who also voiced opposition to the Delta Air Lines-Northwest Airlines merger of 2008, said he believes that with the Southwest-AirTran deal, "the U.S. airline industry will be continuing down the path of consolidation, which, I strongly believe, will lead to less service, higher prices, and fewer choices for consumers."
Oberstar's memo added that Southwest's acquisition of AirTran "presents the Antitrust Division with new but important questions about the future role of low-cost carriers in promoting competition," adding that Southwest is by far the dominant low-cost carrier. He urged the antitrust division to "take all available action, including the pursuit of injunctive relief, to remedy any anticompetitive effects that may flow from Southwest's acquisition of AirTran."
Southwest in its announcement of the AirTran deal said it believes that the addition of its service in Atlanta as part of the acquisition could stimulate more than $200 million in consumer savings annually. Orlando-based AirTran has its largest hub in Atlanta.
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