Anti-merger lawsuit is un-American


You might think the attorney general of the United States would have his hands full dealing with the many scandals and assorted embarrassments the Department of Justice has been party to lately – you know, the Fast and Furious gun-running fiasco, the ill-advised seizure of Associated Press phone records, the investigation of Fox News reporter James Rosen … There’s more, but you get the idea. Attorney General Eric Holder and the Justice Department have been really busy, even without spending a lot of time on their actual job, which is upholding and enforcing the laws of the nation. And yet Holder and the DOJ have somehow found time to meddle in America’s free market economic system and disrupt the exceedingly important business affairs of two private companies, American Airlines and US Airways. This meddling comes in the form of a federal lawsuit challenging the airlines’ pending and previously uncontroversial merger – a deal valued at $11 billion and designed to turn two airlines that are fighting for survival in a mercilessly competitive industry into one thriving carrier generating an estimated $40 billion in annual revenue. This blueprint for success is a bad idea, Holder claims, because it could lead to higher ticket prices and fees. This plan to combine and preserve two companies that boast long and proud histories in the air travel business, Holder contends, could bring “substantial harm” to consumers. The exact opposite is true, of course. What would really harm consumers would be for one or both of these airlines to go out of business or retrench so drastically as to be perpetually noncompetitive with other major airlines that have already pooled their resources. If anything, the traveling public will be far better served by a market that includes the proposed world’s biggest airline operating as American Airlines Group Inc., than by a shrinking travel landscape that condemns consumers to the pricing and scheduling whims of the handful of consolidated carriers who would fly on should American and/or US Airways fall by the wayside. It probably shouldn’t surprise us that the business-bashing, profit-stifling Obama administration would deploy its Justice Department in opposition to a business transaction that would bolster the businesses involved as well as the overall economy; regulatory and legislative suppression of the economy has been a hallmark of the Obama era in Washington, D.C. Making matters worse and likely paving the way for the government’s challenge to the airline merger was the Senate’s confirmation in December of a well-known anti-merger lawyer, Bill Baer, to head the Justice Department’s antitrust division. Baer is spearheading the case against American and US Airways. But all that is Washington doing what Washington does. What we’re hard-pressed to understand is Texas Attorney General and would-be governor Greg Abbott’s decision to put Texas on the side of the federal government, five other states and the District of Columbia by signing onto the anti-merger lawsuit. Abbot’s campaign to replace Rick Perry as governor owes at least some of its early rhetoric to the attorney general’s penchant for suing Washington. Now, suddenly, inexplicably, he uses his office not to protect Texans from overreaching federal bureaucrats but to help the feds crush a Texas business that is a vital contributor to the state’s economy. Fort Worth-based American Airlines must be wondering what it’s done to offend the man who wants to succeed relentlessly pro-business Perry as the state’s top elected official. If Abbott is so naive and ill-informed that he believes the American-US Airways merger would be bad for Texans, then he has no business running for governor. If he’s playing politics – trying to portray himself to some segment of the electorate as a defender of beleaguered consumers against the big, bad airlines, then he should be ashamed of himself – and he has no business running for governor. Abbott should withdraw Texas from this preposterous, anti-business lawsuit and apologize to American Airlines for attempting to undermine the company’s future. While he’s at it, he should apologize to the many Texas voters and taxpayers who depend on American Airlines for a long list of direct and indirect economic benefits ranging from jobs to tax payments to all the sales and services that derive from the airline’s daily operations. The Fort Worth Chamber of Commerce has estimated that American Airlines employs more than 20,000 people in the Fort Worth-Dallas Metroplex alone and contributes to the employment of 175,000 more by vendors, contractors and others who do business with the airline. The merger with US Airways is critical to American’s reorganization plan as it emerges from bankruptcy. The lawsuit, no matter its outcome, will delay implementation of that plan. Federal Bankruptcy Judge Sean Lane said during a hearing in New York on Thursday that he was reluctant to approve the plan while the merger is being challenged by the government.. Both airlines have pledged to fight the Justice Department’s intrusion into their business, and some analysts suspect that the government’s main purpose in filing suit is to extract some concessions before allowing the merger to proceed. The feds are said to be particularly concerned about the merger’s potential effect on operations at Washington’s Reagan National Airport. Looking out for themselves? Who would have guessed? Whatever the motivation, the government’s attempt to stop this merger is wrongheaded, not to mention unfair and hypocritical, considering that Washington didn’t lift a finger to prevent earlier mergers involving United and Continental, Northwest Airlines and Delta, and Southwest Airlines and AirTran. Holder, Baer, Abbott, et al. should stop blocking the runway and let this much-needed, highly beneficial merger get off the ground.