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The House of Representatives is considering legislation that would place a one-year moratorium on all major airline deals, including one merger that appears to enjoy widespread support among lawmakers. Rep. Louise Slaughter, D-N.Y., introduced a bill late Tuesday that would freeze deals involving at least two of the nation’s eight largest carriers. Peter DeFazio, D-Ore., another vocal airline critic, is the bill’s only co-sponsor. “We are in the midst of a merger tsunami,” Slaughter said in a statement. “The new administration and Congress need some time to understand the possible impact of these mergers.” Slaughter’s bill comes as the U.S. Department of Transportation prepares to more actively review airline mergers. Transportation Secretary Norman Mineta told state and local transportation officials in a speech Tuesday that his department will review the impact of mergers on hub airports, according to Reuters. Transportation will coordinate the review with antitrust regulators at the Justice Department, he added. If passed, the bill would undermine UAL Corp.’s $11.6 billion bid for US Airways Group Inc., the nation’s sixth-largest airline. Lawmakers have been scathingly critical of that deal, and in her statement, Slaughter presented several issues related to the merger that she wants resolved before lifting the moratorium. The bill would also halt AMR Corp.’s bid to buy Trans World Airlines Inc., the country’s eighth-largest carrier. AMR agreed Jan. 10 to pay up to $3.5 billion for the St. Louis airline, which filed for Chapter 11 bankruptcy protection that day. Lawmakers have widely supported the deal because it would save TWA from liquidation. “What I heard was a lot of skepticism about the [UAL-US Airways] merger and a lot of concern about the impact on jobs in St. Louis,” said Michael Levine, a professor at Harvard Law School who testified at Senate hearings held earlier this month. “That translates to me into a reluctance to inhibit the AMR-TWA transaction.” However, it is unlikely that Slaughter’s bill will make it into law as written. Before the full House votes on the bill, it would have to pass through committee, giving lawmakers a chance to amend the measure to exclude the AMR-TWA deal. Then the Senate would have to adopt a similar measure. Still, it would be better for Congress to pass a moratorium than to look at each deal individually, said Albert Foer, president of the American Antitrust Institute. “One of the problems with our approach is it tends to look at the trees, not the forest,” he said. But Foer agreed that Congress may need to make an exception to the moratorium for an airline, such as TWA, that is truly failing. There is precedent for a merger moratorium. Last year, the Surface Transportation Board ordered a 15-month freeze on railroad deals after Burlington Northern Santa Fe Corp. announced it planned to merge with Canadian National Railway Co. But it may be much tougher for Congress to pass a bill declaring a moratorium because it would increase political pressure on lawmakers to vote for a freeze any time there is a big deal, said William Karas, an aviation lawyer with Steptoe & Johnson. “They would have to vote for a new precedent,” he said. “It’s a slippery slope.” Copyright (c)2001 TDD, LLC. All rights reserved.

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