June 18, 2013 / 11:30 PM / in 7 years

U.S. lawmakers urge careful review of American-US Airways deal

WASHINGTON (Reuters) - Two U.S. lawmakers with antitrust oversight have urged the Obama administration to carefully review a planned merger of American Airlines AAMRQ.PK and US Airways Group LCC.N to ensure that it will not lead to higher prices for air travelers.

An American Airlines passenger jet taxis to a runway as a Southwest Airlines jet (rear) lands at San Francisco International Airport in San Francisco, California April 22, 2013. REUTERS/Robert Galbraith

US Airways announced on February 14 that it planned to buy American Airlines parent AMR Corp, which is restructuring in bankruptcy court. The airlines are looking to complete the deal by the end of September.

Senator Amy Klobuchar, who chairs the Senate Judiciary Committee’s antitrust subcommittee, and Mike Lee, the top Republican on the panel, said the deal would mean the top four U.S. airlines would control nearly 90 percent of the U.S. market.

The pair acknowledged in the letter, dated Tuesday, that there could be efficiencies associated with the deal but also noted concern that flight costs could go up or customer service could deteriorate.

“We anticipate that your analysis will include, as it should, a careful examination of whether divestiture of slots at Reagan National (Airport) is necessary to ensure that consumers continue to benefit from robust competition at this airport,” the lawmakers added.

The letter was addressed to Attorney General Eric Holder and Transportation Secretary Ray LaHood. Both the Justice and Transportation Departments must approve the proposed deal.

Antitrust experts have said the Justice Department could request divestitures of some of slots at Reagan National and a small number of other airports. Outside these hubs the carriers fly different routes for the most part.

In late May, more than 100 members of Congress asked U.S. regulators to allow a combined American Airlines and US Airways Group to keep all their airport slots at Reagan National near Washington D.C. if the merger is approved.

Representatives Mike Michaud, a Maine Democrat, John Duncan, a Tennessee Republican, and over 100 bipartisan colleagues argued that slot sales would cut service to smaller cities.

Reagan National is used regularly by many members of Congress to fly to and from their home districts.

Reporting by Diane Bartz; Editing by Tim Dobbyn

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