FOR IMMEDIATE RELEASE: CONTACT: Meredith Kelly
March 19, 2013 202.224.7433
In Senate Judiciary Anti-Trust Hearing on the U.S. Airways & American Airline Merger…
SCHUMER SECURES FIRM COMMITMENT FROM US AIRWAYS CEO THAT UPSTATE NEW YORK REGIONAL SERVICE & JOBS WILL NOT SUFFER AS RESULT OF AIRLINE MERGER
With Merger Deal Pending Between US Airways & American Airlines, Senator Questions How Potential Takeover Would Affect Upstate Service, Ticket Prices & Local Jobs from Buffalo to Albany to Binghamton – U.S. Air CEO Committed That There Are No Plans to Cut Upstate Service or Jobs
Schumer Pressed U.S. Airways CEO Further & Stated that As Merger Negotiations Continue to Unfold, Competition Cannot Mean Sacrifice to Regional Air Service in New York
Schumer: Merger Should Only Be Cleared for Take-off if Airfare, Service, and Jobs Are Protected
U.S. Senator Charles E. Schumer, a member of the Senate Judiciary Committee, secured a commitment from U.S. Airways CEO Doug Parker to uphold Upstate New York regional service and preserve jobs in its regional airports: Buffalo, Albany, Rochester, Syracuse, Binghamton, Newburgh, Watertown, Westchester, Elmira and Ithaca. Specifically, at the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing – “The American Airlines/US Airways Merger: Consolidation, Competition, and Consumers” – U.S. Airways CEO Doug Parker’s committed to Schumer that the merger would not put New York jobs, routes and affordable airfare at risk. Schumer pressed further and urged that as merger negotiations continue to unfold, regional air service in Upstate New York not be sacrificed to achieve other objectives.
In April of 2012, US Airways filed an 8-K form with the Securities and Exchange Commission (SEC) to begin the process of a takeover of American Airlines, which is currently in bankruptcy, and hopes to emerge from bankruptcy as a stand-alone carrier. In addition, US Airways made an agreement with American’s three labor unions, which are important first steps in what could be a takeover of American Airlines. In light of this potential takeover, Schumer raised important questions with U.S. Airways CEO Doug Parker regarding the preservation of low-cost service in Upstate New York.
“The merger between US Airways and American should only be cleared for take-off if we are sure it will not mean higher airfares, less service, or a reduction in New York jobs,” said Schumer. “Today’s commitment from U.S. Airways CEO Parker demonstrates the company’s strong commitment to Upstate New York air-routes and jobs. However, actions speak louder than words, and I will fight to ensure that regular, affordable and reliable air service to and from regional airports, like Buffalo, Albany, Rochester, Binghamton, Watertown or Westchester, are not sacrificed as the merger negotiations move forward.”
Schumer noted that a primary factor in an increase in fares is a decrease in competition among airlines in a given market. US Airways and American Airlines are major carriers in Upstate New York, and have had significant presences at most upstate airports for decades. Several markets throughout New York are serviced largely by both US Airways and American Airlines. For instance, US Airways flies from Buffalo, Rochester, Syracuse and Albany to Boston, Charlotte, LaGuardia, Washington D.C. and Philadelphia. US Airways also flies from Ithaca to LaGuardia and Philadelphia, Elmira, Binghamton, Newburgh and Westchester to Philadelphia, and from Islip to Philadelphia and Washington D.C. American Airlines has a hub at JFK and a so-called ‘Focus City’ at LaGuardia, and flies from Chicago to Buffalo, Rochester, Syracuse, Watertown, and Westchester. American Airlines also flies from JFK Airport and LaGuardia to many other destinations.
In response to the news of this potential merger, Schumer questioned US Airways CEO Douglas Parker at a Judiciary Subcommittee hearing and laid out his concerns that the merger could adversely affect air fares and service upstate. Schumer underscored that when one air carrier dominates a market, fares can quickly become unaffordable, and that several carriers in a market gives the flying public more options of when and where to fly and can lower ticket prices. Schumer also noted that the airline industry is a large employer in New York and any merger should maintain the tens of thousands of workers that the two airlines employ.
During the hearing, Schumer spelled out specific questions for Parker that relate to upstate air service including:
• Will you commit to maintaining the New York jobs of both US Air and American Airlines?
• Will you commit to maintaining service at all the locations across the state which are currently serviced by your two airlines?
Parker responded yes to both of these questions.
Schumer has long led the effort – which has utterly transformed upstate air travel for businesses, tourists and local residents alike – to bring new, low-cost carriers like Jet Blue and Southwest to Upstate New York. In 2001, Schumer led the fight to block the merger of US Airways and United Airlines citing the deleterious effect it would have on competition in the upstate air service market. In 2003, Schumer helped to pave the way for new low-fare service to Upstate New York by convincing the Justice Department to block a hostile takeover of Independence Airline by Mesa Airlines.