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National Journal blog poses pointed questions about Oberstar airline views

WASHINGTON, D.C. — National Journal today poses some pointed questions about Minnesota’s 8th District congressman’s views on its transportation blog:

“Given the recession and continuing economic woes of the airline industry, is House Transportation and Infrastructure Committee Chairman James Oberstar, D-Minn., going in the wrong direction as he seeks to tighten foreign ownership limits and increase antitrust scrutiny of global airline alliances? Or can the airline industry be profitable and serve the interests of the traveling public without greater government intervention?”

As of late, Oberstar has ruffled a few industry feathers with his plans.

James C. May, the president and CEO of Air Transport Association, responded to National Journal’s questions thusly.

“HR 831’s approach to antitrust immunity is absolutely the wrong way to go. It will harm airline service, consumers and employees, as well as cause a negative ripple across the travel and tourism industry at a time when the U.S. economy is already suffering.”

Of course, not everyone agrees. Robert L. Crandall, retired chairman and CEO of AMR and American Airlines, countered with this observation: “No, I do not think Chairman Oberstar is going the wrong way on either Alliances or Foreign Ownership, although many in the industry will doubtless disagree.”

“In my view, an objective observer would have to look very hard to find a way in which alliances have benefited consumers. In the major markets now dominated by alliances — U. S./Paris and U.S./Frankfurt for example — there is far less competition now than there was in pre-alliance days. And that is exactly as one would expect, since any non-alliance carrier serving those markets can offer far fewer origin-destination markets than the alliance carriers with which they compete.”

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