Impact of Airline Mergers Must Be Carefully Weighed

Merger discussions within the airline industry may be sound and fury signifying nothing or the dying gasps of 30 years of airline deregulation in the United States.

Airline deregulation was never intended to create “megacarriers.” Yet under the most likely merger scenarios currently being discussed--United-US Air, American-Northwest, Delta-Continental--three giant carriers will control 85% of the domestic air market.

Reducing the number of carriers effectively grants the surviving airlines even greater control of hub cities than currently exists. For consumers, particularly business travelers, consolidation diminishes choice and increases prospects of higher fares and fewer flights from small markets. Smaller airlines and start-up carriers are left struggling to survive.

Airline mergers present special challenges to pilots because of the need to seamlessly integrate different pilot seniority systems. Seniority determines pilot pay, the equipment he or she flies, and the routes and schedules flown. Pilots’ futures are inextricably linked to the company’s long-term success. That’s why I’ve appointed a task force of pilots, financial analysts, lawyers and other experts to prepare an in-depth report on the impact of mergers to our profession.

Delta’s 9,600 pilots want our company to grow and prosper. But, before Delta embarks on a growth-through-acquisition strategy, Delta should reach agreement with its pilots on a new contract that rewards and respects pilots’ investment in the company. In 1996, pilots granted Delta concessions worth more than $1 billion. Today, the company enjoys outstanding profitability, which our investment helped bring about.

Congress, the Justice Department, and the Department of Transportation must carefully examine each proposed airline merger. Too much is at stake to do otherwise.

Capt. CHARLES S. GIAMBUSSO

Chairman, Delta Master Executive Council, Air Line Pilots Assn.

Atlanta