The Justice Department's antitrust chief is promising tougher enforcement of laws to preserve competition in the airlines industry.
Assistant Attorney General Charles F. Rule said in a speech Tuesday that the antitrust division would take a harder look at mergers than did the Transportation Department, which gave up its authority to review airline deals at the end of 1988."Perhaps somewhat overlooked by DOT in the course of deregulating the airline industry, the antitrust laws have a valuable role to play to ensure that a competitive environment does not sow the seeds of its own demise," Rule told the International Aviation Club.
"The antitrust division intends to use its new-found authority - as well as preexisting authority - to apply those laws with appropriate care in order to ensure that U.S. airline markets remain competitive in the years to come," Rule said.
"We will ask whether the merger will result in increased prices to consumers by creating, enhancing, or facilitating the exercise of market power without generating offsetting efficiencies," he said.
Rule said that an unanticipated result of airline deregulation has been that carriers have become entrenched in regions even though the changes "have generally benefited consumers by dramatically increasing the efficiency of airline service."
He cited computerized reservation systems, which give their owners an upper hand in getting bookings despite Transportation Department rules. "Whether or not this advantage represents an efficiency, it does place new entrants at a disadvantage," he said.
Rule did not say what position the department would take on the proposal to merge the computerized reservation systems of American and Delta airlines.