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Some in Congress seek scrutiny of Mesa Air bid
Mon November 10, 2003 08:10 PM ET
By John Crawley
WASHINGTON, Nov 10 (Reuters) - A handful of U.S. House and Senate lawmakers have asked the Bush administration to closely examine Mesa Air's proposed hostile takeover of Atlantic Coast Airlines Holdings Inc. (ACAI.O: Quote, Profile, Research) , raising potential competition concerns.
Reps. Joe Wilson, a South Carolina Republican and assistant majority whip, and Sen. Gordon Smith, an Oregon Republican and Commerce Committee member, are among the lawmakers who have expressed concern recently in letters to senior officials about Mesa's plans.
"I respectfully request that you investigate Mesa Airlines' hostile takeover of Atlantic Coast Airlines," Wilson wrote to Transportation Secretary Norman Mineta.
Wilson said he was concerned Mesa Air Group Inc. (MESA.O: Quote, Profile, Research) will derail Atlantic Coast's plan to offer low-fare service from Washington D.C.'s Dulles airport in competition with United Airlines.
Lawmakers have also contacted Transportation Department Inspector General Kenneth Mead, an agency and industry watchdog who is conducting a separate review of competition on regional airline routes.
Atlantic Coast said in July it planned to end long-standing ties to UAL Corp.'s United Airlines (UALAQ.OB: Quote, Profile, Research) to start a low-fare carrier based at Dulles. Analysts have called the plan risky.
Mesa has launched a takeover bid, which would create the nation's largest regional airline. The carriers have sued each other over the takeover proposal.
A spokesman for Mineta said the agency was monitoring the situation and would not comment further. A spokesman for Mead said that he was also reviewing the correspondence and would not comment.
Justice Department antitrust enforcers and transportation regulators are expected to review any potential impact of any merger on domestic routes, ticket pricing and service to small communities.
But a source close to the matter said it was "a stretch" at this point to say that the Bush administration had any immediate concerns as some have claimed.
Atlantic Coast has said that Mesa's bid would prevent it from establishing an "economically viable" low-cost airline.
A representative from Mesa had no immediate comment.
Many members of Congress, especially those from rural areas, are sensitive to the impact that airline mergers have on service to their communities.
Fierce congressional lobbying, mainly over competition concerns in the eastern U.S., helped to derail United's plans to buy US Airways (UAIR.O: Quote, Profile, Research) in 2001.
© Reuters 2003. All Rights Reserved.
Mon November 10, 2003 08:10 PM ET
By John Crawley
WASHINGTON, Nov 10 (Reuters) - A handful of U.S. House and Senate lawmakers have asked the Bush administration to closely examine Mesa Air's proposed hostile takeover of Atlantic Coast Airlines Holdings Inc. (ACAI.O: Quote, Profile, Research) , raising potential competition concerns.
Reps. Joe Wilson, a South Carolina Republican and assistant majority whip, and Sen. Gordon Smith, an Oregon Republican and Commerce Committee member, are among the lawmakers who have expressed concern recently in letters to senior officials about Mesa's plans.
"I respectfully request that you investigate Mesa Airlines' hostile takeover of Atlantic Coast Airlines," Wilson wrote to Transportation Secretary Norman Mineta.
Wilson said he was concerned Mesa Air Group Inc. (MESA.O: Quote, Profile, Research) will derail Atlantic Coast's plan to offer low-fare service from Washington D.C.'s Dulles airport in competition with United Airlines.
Lawmakers have also contacted Transportation Department Inspector General Kenneth Mead, an agency and industry watchdog who is conducting a separate review of competition on regional airline routes.
Atlantic Coast said in July it planned to end long-standing ties to UAL Corp.'s United Airlines (UALAQ.OB: Quote, Profile, Research) to start a low-fare carrier based at Dulles. Analysts have called the plan risky.
Mesa has launched a takeover bid, which would create the nation's largest regional airline. The carriers have sued each other over the takeover proposal.
A spokesman for Mineta said the agency was monitoring the situation and would not comment further. A spokesman for Mead said that he was also reviewing the correspondence and would not comment.
Justice Department antitrust enforcers and transportation regulators are expected to review any potential impact of any merger on domestic routes, ticket pricing and service to small communities.
But a source close to the matter said it was "a stretch" at this point to say that the Bush administration had any immediate concerns as some have claimed.
Atlantic Coast has said that Mesa's bid would prevent it from establishing an "economically viable" low-cost airline.
A representative from Mesa had no immediate comment.
Many members of Congress, especially those from rural areas, are sensitive to the impact that airline mergers have on service to their communities.
Fierce congressional lobbying, mainly over competition concerns in the eastern U.S., helped to derail United's plans to buy US Airways (UAIR.O: Quote, Profile, Research) in 2001.
© Reuters 2003. All Rights Reserved.
