I thank the Chairman for holding this hearing this morning and giving me the opportunity to speak and ask questions on this subject. As you know, I've been following airline competition issues closely for several years because their importance to my state of Iowa. Iowa air travelers and businesses have long been vocal about the lack of competition in air service and high air fares out of Iowa cities. On many occasions I've noted that competitive air service is directly related to the economic futures of these communities.
Because of this, I've been concerned about possible predatory pricing and other anti-competitive practices in the airline industry. I've also been concerned about airline mergers, particularly how mergers between the larger carriers can reduce competition and result in higher fares throughout the country. Moreover, I've been concerned that mergers between the larger carriers could trigger other large airlines to merge, resulting in just a handful of airlines controlling the lion's share of the United States market. That unquestionably appears to be the case today.
Right now, a number of transactions are being considered. United and US Airways, American and TWA, and the latest reports are that Delta and Continental are in preliminary discussions about a possible merger. Now, I want to distinguish the American acquisition of TWA as unique. This transaction may be the only the solution in terms of saving thousands of jobs and sustaining crucial flights into and out of Iowa. I've gotten assurances from American Chief Executive Don Carty that American will not reduce flights into Des Moines, Cedar Rapids or other points in Iowa. So, I believe that this particular asset buy, because of the dire straits in which TWA finds itself, may be the only way to maintain competition and air service to these rural communities. The alternative, TWA going out of business, could be far worse.
Nonetheless, all this talk of mergers fuels my general concerns about continuing consolidation in the airline industry. If the largest carriers control the majority of the markets, hubs, gates and networks, won't they also have the pricing power to restrict the entry of start up airlines? How will these mergers help air travelers? How will these mergers help competition?
We must also understand how the existing regional airlines, such as Great Lakes, Corporate Air, Chatauqua, Allegheny, Piedmont, and PSA, will be treated under these mergers and acquisitions. They help to provide service to smaller, underserved communities that the larger brands do not serve, though sometimes under a name directly affiliated with the larger brand. In many cases, they are the "essential air service" that all of us talk about. Media reports raise doubts about some of their futures.
In the past, I've urged both the Justice and Transportation Departments to make sure they are doing everything under their statutory authority to investigate and take enforcement action for antitrust violations by the airlines. I've pushed the Justice Department to closely review all airline mergers, alliances and other contractual arrangements that might violate the antitrust laws.
I still believe that the free market is the best system by which to solve the air service problems of Des Moines and other cities in Iowa. But if there is anti-competitive behavior, the free market system cannot work. If anti-competitive mergers go through, the free market system cannot work. I want to ensure that rural communities like those in Iowa do not experience higher airfares, fewer flights and fewer connections because there is no more competition among airlines. The Justice and Transportation Departments should enforce the antitrust laws. I want to make sure they do that. And we here in Congress have a significant role to play in terms of oversight of the competitiveness of the United States airline industry. So, I'm pleased that the Judiciary Committee will be reviewing the possible negative implications of excessive consolidation in the airline market.