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Senate Commerce Committee Chairman John McCain elicited support Tuesday for a bill that would let the Department of Transportation reject airline mergers, the clearest sign yet that the Arizona Republican plans to make the measure a priority this year. Testifying in favor of the Aviation Competition Restoration Act, or S-415, were executives for three airlines, the General Accounting Office (GAO), a consumer group and Iowa Attorney General Thomas J. Miller. No witnesses opposed the legislation, which was originally crafted by Sen. Ernest Hollings, D-SC, who is the Commerce Committee’s ranking member. “Competition is a necessary, integral piece of our aviation system,” McCain said. “This bill will take steps to improve this situation.” The legislation would require DOT to stop a merger that gives a carrier more than 10 percent of total “enplanements,” or traveler boardings, nationwide if the agency finds the deal would substantially lessen competition or permit an airline to unreasonably raise prices at a large hub airport. DOT could exempt a deal from the test if it finds the merger is in the public interest. The measure also would block deals that enable a carrier to dominate a major hub airport, and requires the DOT to evaluate whether gates and slots at big airports should be redistributed. “The legislation could help to crack open the dominance of major airlines at fortress hubs and expand consumer protection by restoring real competition in the industry,” said Mark N. Cooper, director of research at the Consumer Federation of America. In his testimony, Glen W. Hauenstein, senior vice president at Continental Airlines Inc., called for “swift” passage of the bill. “Continental supports the thrust of this legislation,” he said. “We agree that DOT should have an expanded role.” David Neelman, CEO of JetBlue Airways Corp., called the bill a “moderate” response to airline industry consolidation that will ensure new entrants have a chance to compete. “The real intent of this legislation is to direct the DOT to take a more active, affirmative role,” said Jay�tta Z. Hecker, GAO’s director of physical infrastructure issues. While supporting the bill, Hecker did question whether it was necessary to require the sale of gates and slots, noting that might do little to improve competition. The lone voice of opposition was Sen. Kay Bailey Hutchison, R-Texas, who said it is too late to try to stop airline consolidation. Instead, she vowed to introduce a bill to increase airport capacity by expediting construction of runways. Copyright (c)2001 TDD, LLC. All rights reserved.

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