<B>WashingtonWire</B>
By Barbara Cook
<B>Merger Screening</B>
The proposed United-US Airways merger faced its first federal screening in mid-June as House and Senate committees lined up panels of industry and government officials to gauge the transaction's likely effect on airline competition and ticket prices. While Congress has no authority over whether the merger may take place, it can be a significant ally or opponent of the deal during the review process at the U.S. Department of Justice, which holds authority over antitrust issues, and at the U.S. Department of Transportation. DOT works with Justice in an advisory capacity in merger cases and retains the ability to approve the transfer of international routes.
Two issues emerged during the congressional hearings as focal points of concern over the proposed $4.3 billion carrier combination: Will it set in motion a domino-like series of mega-mergers that will result in a loss of competition and increase in fares, and will DC Air, as a spinoff of US Airways' Reagan Washington National Airport operations, be a viable company. At one point during the House Transportation and Infrastructure Committee hearing, Rep. Ray LaHood (R-Ill.) told United chief executive James Goodwin and US Airways chairman Stephen Wolf that the merger may be a "win-win deal for you gentlemen, your stockholders and probably half the lobbyists in Washington, D.C., but I don't necessarily think it's a win-win for the customer. As a matter of fact, I think it might be lose-lose for the customer." Rep. James Oberstar (D-Minn.), the ranking minority member of the Transportation and Infrastructure Committee, said, "Most of us would not have voted for (airline) deregulation if we had known it meant the possibility of narrowing the industry to three carriers."
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ATC Delays Decreased</B>
Air traffic control delays were down 7.5 percent in May compared with the same month a year ago, said Federal Aviation Administration administrator Jane Garvey. However, agency spokesman Bill Schumann cautioned that it's too soon to claim this improvement resulted from the Spring-Summer 2000 Air Traffic Control initiative the agency announced in March. The initiative is a cooperative effort among FAA, airlines and airports to find ways to cut down the growing number of ATC-related delays during the coming months. Schumann noted that delays are tied to weather conditions, as well as to ATC operations.
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Amtrak Delays High-Speed Train</B>
Amtrak has suspended test runs of its high-speed Acela Express trains due to a newly discovered problem with cracked or missing bolts in several wheel sets, the company said. While engineers troubleshoot the problem, Amtrak officials said the startup of Washington-Boston Acela service will be delayed from July until at least mid-August. A spokesperson for Amtrak said, "We think we have the fix" for the mechanical problem and testing should soon resume. The implementation of Northeast Corridor high-speed rail service and the expansion of Amtrak's express service are the cornerstones of the company's plans to eliminate federal operating subsidies by the end of 2002. The General Accounting Office, in a just-released report to Congress, said Amtrak "will continue to have difficulty controlling its costs and meeting capital needs" unless the company implements measures of labor productivity for its lines of business. "Because future cost increases can be expected, it will be critical for Amtrak to achieve the revenue projections for such things as its high-speed rail program on the Northeast Corridor," GAO said.