Oberstar ready for merger battle

01/19/2008

The Minnesota Democrat and committee head plans hearings to help see that Delta and Northwest stay put.


By MARILYN GEEWAX,
Cox News Service
January 18, 2008


WASHINGTON - House Transportation Committee Chairman Jim Oberstar doesn't have veto power over a possible Delta-Northwest airline merger. But on Friday, the powerful Minnesota Democrat said he would use all of his considerable political clout to pressure the Justice Department to block it.

"I would and I will and I am fighting this merger," said Oberstar, who has long opposed airline industry consolidation. "Mergers are bad for aviation."

He said he does not expect to get into a battle with Atlanta-based Delta Air Lines over whether a merged airline should be based in Georgia or in his home state, where Northwest Airlines has its headquarters.

Both Georgians and Minnesotans "ought to be on the same page" fighting airline mergers, he said, because they cost jobs and harm consumers.

If Delta and Northwest were to join forces, "what you would have is a cascade of consolidation," Oberstar said. "The other airlines would have to defend themselves by creating entities as large or even larger" than Delta-Northwest.

One analyst said a riled-up Oberstar could indeed have enough political weight to affect the deal.

"Technically, he does not have veto power, but actually, he does, because he can put a lot of pressure on the dealmakers," said Michael Boyd, president of the Boyd Group Inc., an aviation consulting firm in Colorado.

Political leaders from Georgia have said they would fight hard to make sure the surviving company's top executives work in Atlanta.

But Oberstar, whose committee has jurisdiction over civil aviation, plans to hold high-profile hearings to drum up broad political support to ensure that Delta and Northwest stay right where they are now.

While the Department of Justice alone has the power to review the antitrust implications of corporate mergers, Oberstar said that his committee could create intense political pressure by pointing out how a merger might cost jobs in cities such as Cincinnati, where Delta has a hub, or might help push airfares higher.