A proposed merger between the computer-reservation systems of Delta and American airlines may violate federal antitrust laws, Utah Attorney General Paul Van Dam said Tuesday.
Van Dam said he is joining other states nationwide in asking the U.S. Department of Justice to investigate the merger. He said the merger is particularly important for Utahns because Salt Lake City is a hub for Delta Airlines."It is the type of merger that could have a significant impact on our state. Therefore, I have a duty to have the merger analyzed completely," Van Dam said.
Delta officials could not be reached for comment Tuesday.
Delta and American are two of only five computer-reservation systems nationwide. The other three are United, TexasAir and TWA/Northwest. Van Dam said American is the largest reservation center, handling 41.3 percent of the total business available. Delta is the smallest of the five, handling only 5.1 percent of the market.
If one company becomes too powerful, airline fares could rise as the public has fewer choices available, said officials in Van Dam's office. The risks of uncompetitive pricing are particularly high because all reservation systems are owned by airlines. Both companies have filed premerger documents as required by law.
Van Dam said the Justice Department's 1984 merger guidelines prohibit mergers in highly concentrated markets unless extraordinary factors make it necessary or desirable.
Although he said he has no personal opinion as to whether the merger is appropriate, Van Dam said he hopes Justice officials will review the merger in light of changing market conditions, the financial conditions of the two companies and other factors.
Officials did not know how many other states have joined in calling for an investigation. They said Minnesota was the first state to raise the issue.