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Thu, Apr 17, 2008

Minnesota Lawmaker Opposes Delta/Northwest Merger Deal

But Others Say Consolidation Could Help Industry

One lawmaker concerned about the effects of a proposed Delta/Northwest merger on his home district happens to be -- unfortunately for merger proponents -- the chairman of the House Transportation and Infrastructure Committee.

Minnesota Congressman James Oberstar said Tuesday he'll try to persuade the Justice Department's Antitrust Division to kill the deal, saying it would crush competition.

Apparently not at all shy about using hyperbole, he calls the merger "the worst development in aviation history," stating the formation of a mega-airline would result in an environment in which "the so-called low-fare carriers will not be able to compete."

Oberstar's state includes Northwest's current headquarters in Minneapolis. The combined carrier would be headquartered in Atlanta, GA. If he's trying to claim that shift makes this "the worst development in aviation history," he may not get much backup from his colleagues.

Cox News Service reports Georgia Senator Johnny Isakson -- who, perhaps not surprisingly, strongly supports the merger -- predicted that despite local concerns about job losses, most members of Congress will support the merger because they fear spreading bankruptcies.

"The aviation industry is under huge stress," Isakson said, adding consolidation could ease pressure. That view was generally echoed by the likes of Pennsylvania Arlen Specter, who said upcoming anti-trust decisions on the merger "will depend on the underlying economic facts" of the airline business.

"This is a troubled industry," he added.

One of Oberstar's colleagues from Minnesota, Senator Amy Klobuchar, plans a hearing in the immediate future with Delta CEO Richard Anderson, and Northwest CEO Doug Steenland. "I will hold their feet to the fire to live up to their commitments and show that any merger is, in fact, in the best interest of Main Street and not just Wall Street," she said.

It appears the looming debate among lawmakers will pit provincial interests such as Oberstar's against a much larger faction... which does not want to face pressures to bail out the aviation industry with taxpayer money in years to come.

FMI: www.newglobalairline.com, www.house.gov/oberstar/

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