US Airways chairman Doug Parker may well be glad that the Senate doesn't get to decide airline mergers, given the buzz-saw of hostility that Parker ran into in defending his $10-billion unsolicited bid for Delta Air Lines. It's easy to stack a congressional panel for or against whatever pleases or displeases a committee chair, given the prerogatives of power, but the Senate Commerce Committee's Delta defence and 'love-in' should also carries a serious warning: rural and small town America, hurt more by airline service cutbacks than it can bear, is against this or any merger. All of which would be the stuff of jokes, along the lines of "Ma and Pa Kettle can't get to the big city no more", but for a serious fact: farm states and rural states have senators and members of Congress, and they tend to have the same senators and representatives for years and years, giving the much-derided 'flyover country' of Mid-America unusual seniority and clout.
So Parker was listening closely when Senator Byron Dorgan, the North Dakota Democrat, denounced the proposed merger as the first domino to fall in a chain reaction that would starve farm states like his. "Inevitably, what's going to happen is the other network carriers are going to decide, 'we've got to merge'." Dorgan is the chairman of the powerful appropriations subcommittee that sets the Transportation Department's budget, and even though DoT does not have the final say in mergers, its findings carry great weight with the decider, the antitrust and competition regulators at Justice.
Even though Parker tried repeatedly to assuage senators, other senior Democrats including Jay Rockefeller of West Virginia said that this or indeed almost any merger would reduce service to small and rural communities. Rockefeller's worries matter: he now chairs the committee's aviation subcommittee. You can listen to the entire Senate Commerce Committee hearing here, click on hearings.
Parker got cold comfort from Republicans, who are supposed to be pro-business. The gentle-lady from Maine, Olympia Snowe, was downright outraged that some of the major towns in her rural state would be "down to one carrier" after a merger. And Mississippi's Trent Lott, now the Senate's number two Republican, said, "This merger causes me concerns and I just want to get that on the record". Noting that Delta is based in Atlanta, Lott told Parker, "you're an aggressive suitor, but the lady from the South doesn't want to be forced into this shotgun wedding". Delta chief executive Jerry Grinstein played up this fear, telling the committee that small communities would be "the major losers in this proposed takeover". Grinstein was in his element in the hearing room, having served as the chief of staff and lawyer for the committee's legendary deal-making, power-wielding chairman, Sen. Warren Magnusson of Washington, back in the 1960s.
The only DoT representative at the hearing, assistant secretary for aviation and transportation affairs Andrew Steinberg, offered some hope for the folks down home , saying the new generation of very light jets such as the Eclipse and the planned 'air-taxi' services they have spurred would fill in the lacunae. He said he could "envisage at some time in the future a much more vibrant market of on-demand service that can be operated profitably". But Steinberg conceded that airline deregulation and mergers since 1978 had hit rural routes the hardest and that subsidised service had not made up the difference.