Congressmen James Oberstar and Jerry Costello said at a hearing, Wednesday, that if the proposed United and Continental merger is approved, they’ll be pushing to restore financial regulation of the airline industry. Oberstar, chairman of the House Transportation and Infrastructure Committee, and Costello, chairman of the panel’s aviation subcommittee, say that if the merger is approved, they’ll put the issue before Congress. Federal regulation of airline pricing would re-establish the government in a position to set pricing for consumers and decide which companies would be fit to fly passengers. Deregulation of the airline industry came about in 1978 and has been cited by proponents for initiating a new era of competition and affordable air travel. Oberstar says that era is over and consumers are now suffering under a new fee-based system that would only get worse with the creation of a United/Continental mega-carrier.
Oberstar voted for deregulation, which opened the industry to new low-cost carriers that competed with larger established carriers, some of which have since gone out of business. He now says that the proposed merger and the current economic environment suggest regulation is now what’s needed to preserve competition. United and Continental feel their merger will make them internationally competitive with large foreign carriers without the need to raise fees. In this country, their merger would create the nation’s largest airline.
