Re-Regulation Possibility with Consolidation

Twice during last week’s Senate Aviation Subcommittee hearing into the merger between Delta and Northwest, re-regulation was mentioned; once by no less than Subcommittee Chair John D. Rockefeller IV, (D-W.V.) who said, “I don’t discount myself entirely from consideration of re-regulation of the airline industry.” The comment was followed by support from union leaders and Mark Cooper, director of research at the Consumer Federation of America, who also testified during the hearing. Perhaps most interestingly, Former AMR Chief Robert Crandall, who never favored deregulation but went on to take full advantage of it, also supports the idea as illustrated by his recent op-ed piece. Cooper indicated that consolidation would lead to less competition and higher prices in addition to worse service, but admitted they would likely come even without mergers. Senator Kay Bailey Hutchison, (R-TX) opposed the idea of new regulations saying it was not Congress’s role to impart policies on airlines, at least with respect to mergers. The discussions came on the heels of attempts by the Hawaiian legislature to re-regulate the inter-island market in the wake of Aloha's liquidation. Its aim was to regulator prices.. Related Story