Congress grills Delta & NWA CEOs
Yesterday, Delta and Northwest Airlines’ CEOs had to answer tough questions before members of Congress only a day after announcing more than $10 billion in combined losses last quarter.
The CEOs’ answers didn’t seem to sway anyone’s opinion about the proposed merger. With lots of questions still unanswered and no clear rationale for the merger other the enrichment of lawyers and the airline executives, this merger may have rough going.
Delta CEO Richard Anderson and Northwest CEO Doug Steenland cited fuel costs as the driving force behind this airline union, however, neither suggested that the merger would change jet fuel pricing in any way shape or form.
It seems that consolidation of the airline industry would, in the minds of the executives, allow airlines to raise prices more easily because of lessened competition. That ability to raise prices is what this merger seems to afford Delta and Northwest.
And we passengers know that they will do it. Case in point — Delta’s hub in Cincinnati that has some of the highest airfares in the nation. When competition declines, the remaining airlines stick it to passengers as soon as as much as possible.
Congress is actually the odd man out in this affair since the executive branch’s justice department is where all of the real decisions about this merger will be made and approved. However, Congress can stage a strong public opposition to the merger that will be hard for the executive branch to ignore.
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