WASHINGTON – Today, three U.S. Senators joined Senator Herb Kohl (D-WI)
in sending a letter to the CEO of AirTran, Joseph Leonard, opposing his
airline’s takeover attempt of Midwest Airlines. In their letter,
Senators Kit Bond (R-MO), Claire McCaskill (D-MO), Ben Nelson (D-NE) and
Kohl cite growing concerns that the merger will diminish service quality
and competition in their local airline markets. Kohl is the chairman of
the Senate Judiciary Committee’s Antitrust, Competition Policy and
Consumer Rights subcommittee.
In their letter to Leonard the Senators wrote: “We have very serious
concerns that an acquisition of Midwest Airlines by AirTran would appear
to jeopardize the enormous consumer benefits realized by many thousands
of travelers throughout our states from the frequency and efficiency of
the highly competitive service offered by Midwest Airlines serving
travelers throughout Wisconsin, Missouri, Kansas and Nebraska. You can
expect us to oppose any transaction that will risk substantial harm to
the interests of consumers in our home states or harm airline
competition overall.”
The letter notes that Midwest operates major hubs at General Mitchell
International Airport in Milwaukee and Kansas City International Airport
and also provides a critical link from Eppley Air Field in Omaha,
Nebraska, to Washington’s Reagan National Airport.
They added: “Air travelers in Wisconsin, Missouri, Kansas and Nebraska
have to come to rely on frequent, high quality and competitively priced
service to numerous key business and leisure markets throughout the
nation directly from these three airports on Midwest Airlines. This
award-winning level of service would be cast in serious doubt should
Midwest Airlines be acquired by AirTran.”
At a Judiciary Antitrust Subcommittee hearing earlier this month, Thomas
Barnett, the chief antitrust official at the Department of Justice
(DoJ), agreed to conduct a second look at the competitive effects of the
proposed merger should Midwest Airlines’s shareholders accept AirTran’s
bid to acquire Midwest Airlines. Last month, DoJ closed its mandatory
investigation of the AirTran/Midwest deal after only a cursory review
lasting fewer than 30 days.
During the hearing Kohl said that since 2004 AirTran has exited 29
markets it had promised to serve, sometimes returning in a scaled-down
version and sometimes not at all. At Dallas/Ft. Worth, AirTran promised
a mini-hub with 30 flights a day to seven destinations by the end of
2004. AirTran never attained more than 17 flights a day at Dallas/Ft.
Worth and presently has only eight flights a day to two destinations.
Similarly, AirTran has reduced service at Washington Dulles from 16 to
seven daily departures and at Pittsburgh from 13 to six.
Full text of the letter below.
Joseph B. Leonard
Chairman and CEO
AirTran Airways
Dear Mr. Leonard:
We have been reviewing AirTran’s plans to acquire Midwest Airlines and
write to inform you that your proposed acquisition raises very serious
concerns for us.
As you know, Midwest Airlines operates hubs at the airports serving
Milwaukee, Kansas City and Omaha. Many thousands of travelers in our
states have come to rely on these hubs for low-priced, frequent and
convenient service to dozens of cities throughout the nation. Should
AirTran acquire Midwest Airlines, the future of these hubs and the
significant employment that they represent in our states would appear to
be cast into very serious jeopardy.
Overall, Midwest today operates 176 flights a day nationally and
operates major hubs at General Mitchell International Airport in
Milwaukee and Kansas City International Airport. It also provides a
critical link from Eppley Air Field in Omaha, Nebraska, to Washington’s
Reagan National Airport. Midwest Airlines and its wholly owned
subsidiary Midwest Connect together fly to 55 destinations nationwide,
including connecting many smaller communities to the national
transportation network. Air travelers in Wisconsin, Missouri, Kansas and
Nebraska have to come to rely on frequent, high quality and
competitively priced service to numerous key business and leisure
markets throughout the nation directly from these three airports on
Midwest Airlines. This award-winning level of service would be cast
in serious doubt should Midwest Airlines be acquired by AirTran.
In 2006, Midwest Airlines served more than 3,700,000 passengers out of
its Milwaukee hub, more than 580,000 passengers out of Kansas City and
more than 192,000 passengers out of Omaha. Of course, Midwest Airlines
is also a significant employer in all of our states. Any reduction in
service as a result of this acquisition would obviously jeopardize these
jobs.
In considering AirTran’s proposed acquisition of Midwest Airlines, our
first priority is to ensure that this deal does not harm consumers, lead
to higher prices, degrade quality of service, or cause a loss of
competitive choices. We have very serious concerns that an acquisition
of Midwest Airlines by AirTran would appear to jeopardize the enormous
consumer benefits realized by many thousands of travelers throughout our
states from the frequency and efficiency of the highly competitive
service offered by Midwest Airlines serving travelers throughout
Wisconsin, Missouri, Kansas and Nebraska. You can expect us to oppose
any transaction that will risk substantial harm to the interests of
consumers in our home states or harm airline competition overall.
Sincerely,
Herb Kohl (D-WI)
Kit Bond (R-MO)
Claire McCaskill (D-MO)
Ben Nelson (D-NE)
