Md. opposes United's bid for USAir

State fears effects on BWI airport of proposed merger

Loss of competition

Concerns are raised with Justice Dept., state's congressmen

December 09, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

Citing a potential loss of service and decreased competition at Baltimore-Washington International Airport, the state has begun a campaign against United Airlines' proposed takeover of US Airways.

John D. Porcari, the state's transportation secretary, met with antitrust officials at the Justice Department last month urging them to block the acquisition. Annapolis also has enlisted the help of the state's congressional delegation.

Should the merger go through, United has said it would reduce the number of US Airways' Baltimore flights. US Airways is the second-biggest user of BWI, after Southwest Airlines.

"Every air traveler from Philadelphia to Richmond is going to feel the impact of the proposed merger with higher fares and fewer choices," Porcari said in an interview yesterday. "We don't feel it's in the region's best interest."

Officials at the Justice Department did not return calls seeking reaction to the state's position.

"It's not what Maryland's position is, per se, it's the legal and antitrust arguments that are more important," Porcari said. "We have some very compelling antitrust arguments."

In May, shortly after the tentative merger was announced, United said the merged airline would end nonstop service from BWI to eight cities: Cleveland; New Orleans; Providence, R.I.; Manchester, N.H.; Miami; and Fort Lauderdale, Jacksonville and West Palm Beach, Fla.

In a position paper, the state spelled out several ways the merger of United, the world's No. 1 airline, and No. 6 US Airways could hurt the region:

Nine cities now served by two carriers from BWI would be reduced to service by only one.

Five of BWI's top origin-and-destination markets would become monopolies.

BWI would go from being the most competitive Washington-area airport to the least competitive

BWI passengers would be forced to use higher-fare, nearby airports dominated by United, which has a hub at Dulles International Airport in Vir- ginia.

Susana Leyva, a United spokeswoman, said the airline would continue working with state officials, and she added that the merger was proposed with the idea of increasing service, not cutting it.

A US Airways spokesman said the airline had no comment on the state's opposition to the merger between its parent, US Airways Group Inc., and UAL Corp., United's parent.

Several state agencies have come together to form a "Maryland merger team" to build opposition to the merger, Porcari said.

"United's proposed acquisition of US Airways is clearly anti-competitive, and thus represents a fundamentally flawed commercial transaction which is at odds with the broad public interest," Porcari wrote in a letter to Maryland's members of Congress. "As part of our proposed public strategy, we are respectfully requesting that the delegation use various public forums to support this position."

Calls to Maryland's two Democratic senators, Paul S. Sarbanes and Barbara A. Mikulski, were not returned yesterday.

Rep. Benjamin L. Cardin said he supports the state's position and thinks the delegation in general will back it.

"We're not interested in blocking the merger just for the sake of blocking it," said the Baltimore Democrat. "We understand that consolidation is going to happen in the airlines, but we think we have legitimate concerns and those legitimate concerns should be addressed.

"Quite frankly, there will be concessions made during the merger and we just want to make sure BWI will be treated fairly," Cardin said.

A spokesman for Rep. Wayne T. Gilchrest, a Republican who represents the 1st District, said he was studying the state's request.

"Given everything else that's going on right now, it's not high on the list of priorities. But we're looking at it," said Eric Webster, legislative director for Gilchrest, who is a member of the House Transportation and Infrastructure Committee.

If the merger is allowed to proceed, authorities must ensure competition, Porcari said in his letter to lawmakers.

Porcari wrote that the antitrust concerns of "the proposed transaction can be affirmatively addressed only if Justice were to impose conditions, including a divestiture by the combined carrier of US Airways' facilities and services now at BWI to another major U.S. airline, so as to preserve and promote competition."

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