U.S. Antitrust Chief Pledges Scrutiny of Airline Mergers

The U.S. government’s chief antitrust official Thursday pledged “careful scrutiny” of a wave of airline industry consolidations that UAL Corp.’s proposed purchase of US Airways Group Inc. is likely to ignite.

“This is an industry in which one needs to pay careful attention to the competitive issues,” U.S. Justice Department antitrust chief Joel Klein said. “We’ve now developed a situation where there is a great deal of hub dominance by individual carriers, and I think it raises significant competitive concerns.”

Already, Congress has planned at least four hearings on airline concentration, infusing the usually technical antitrust analysis with a populist flavor. Besides the Justice Department’s antitrust division, which takes the lead in approving airline mergers, the U.S. Transportation Department reviews transfers of international routes.

Meanwhile, several state attorneys general--fearing higher fares--say they are reviewing the proposal. Individual states can seek to persuade a federal court to block a merger even if the Justice Department doesn’t sue.

The announcement two weeks ago that UAL, No. 1 air carrier United Airlines’ parent, would buy US Airways has competitors scurrying to find their own merger partners.

AMR Corp.’s American Airlines and Delta Air Lines Inc., and British Airways and KLM Royal Dutch Airlines have discussed combinations. Meanwhile, AMR has separately approached Northwest Airlines Corp. and some analysts speculate that Delta may court Continental Airlines.