Senators annoyed at the erosion of air service to small communities, floated the idea of re-regulation at hearings before the Senate concerning the latest consolidation moves by the major carriers. Ironically, the idea was voiced by Republicans.

Senator Ted Steven, R-Alaska, said conservatives there are asking for re-regulation citing the lack of service. CNN also reported that Sen. Olympia Snowe, R-Maine, and Sen. Jay Rockefeller, D-W.Va., also argued that smaller communities have been hurt by industry consolidation and voiced concerns over whether passengers would face higher fares in their states. "I don't think it has to come down to that [re-regulation] but I think it is something in that order," said Rockefeller in the CNN story.

Sen. Byron Dorgan, D-N.D., concurred that deregulation has been bad for smaller markets, saying it costs twice as much to fly to his home state from Washington than it does to fly to Los Angeles, which is twice as far.

"I think the market system is best way of allocating goods and services but I think it needs a referee," he said. "It's quite possible the market would say that air service only exists between the major cities."

Delta (DALRQ) CEO Gerald Grinstein indicated that further consolidation would hurt small community air service. "Small communities will certainly suffer," he said. "With less competition, fares will increase." But USAirways (LCC) Chief Executive Officer Doug Parker said consolidation would not raise fares, arguing that consolidation increases efficiencies and reduces costs so reasonable fares could be had at small communities.

"For those [senators] who have small communities, which the low-cost carriers will never serve, you should be very concerned about the health of the network carriers," Parker said. "We need to encourage an industry that allows network carriers the opportunity to be profitable and not have us in the continual cycle of coming back to you every five or six years to ask for help."

Assistant Secretary for the Department of Transportation Andrew Steinberg argued against re-regulation, calling it unworkable. "History shows that most, though not all, mergers are not successful," he said. "I do believe size and scope in the airline industry are important, though. Contrary to what some have suggested, having fewer, healthier network carriers could end up with more service to those [smaller] communities."