Justice Opposes Merger of Northwest, Republic Lines

The Justice Department, in a rare showing of trust-busting, today told the Transportation Department that a proposed merger between Northwest and Republic Airlines would be anti-competitive and should be disapproved.

The Justice Department, which has allowed an unprecedented number of mergers since President Reagan took office, opposed the proposed acquisition of Republic by Northwest “because there is a significant probability that it will substantially reduce competition in a number of non-stop passenger airline markets in violation” of federal law.

The two airlines, which proposed merging earlier this year, now provide a large share of the competing non-stop service in 42 markets, the department said. All but four of those markets are routes emanating from Minneapolis and Detroit.

In 26 of the 42 markets, Justice said, the merger would consolidate the only two airlines providing non-stop service, “thereby eliminating all present competition.”

The merger also would limit the ability of other firms to enter or expand their routes, it said.

“In sum, Northwest and Republic are each other’s principal competitor, providing overlapping service on numerous city pairs. Their proposed merger has clear and immediate competitive costs and offers no apparent efficiencies that are not otherwise obtainable. . . . DOT should therefore disapprove it,” the brief said.

Critics claim that the merger would have been difficult to justify.