By David Ingram
WASHINGTON, Feb 27 (Reuters) - U.S. Representative Steve
Cohen recalled the golden days of air travel in Memphis,
Tennessee. Northwest Airlines operated a hub there, and the
airport had 240 outbound flights a day including a prized
international route to Amsterdam.
That was before the 2008 merger between Northwest and Delta
Air Lines Inc toppled Memphis from its perch, helping to push
flights down to 96 a day as of December, Cohen said at a
congressional hearing on Tuesday.
"It would not surprise me to see further cuts, and on
Saturdays it looks like Dodge City," said Cohen, a Democrat.
U.S. cities take pride in the symbolic importance and
economic benefits of hosting a major airline hub, so the
possibility of yet two more big carriers merging had Cohen and
other lawmakers worrying that the woes of the Memphis airport
could befall other cities.
Representative Keith Rothfus, a Republican from
Pennsylvania, said the Pittsburgh airport faced similar
difficulties after US Airways cut it as a hub.
The hearing before the U.S. House's antitrust subcommittee
was the first congressional look at the proposed deal between
AMR Corp's American Airlines and US Airways Group. The deal is
undergoing U.S. Justice Department review.
The two carriers combined have eight mainland U.S. hubs, the
same as Delta. United Air Lines Inc says it has nine.
"As we consider the merits of this merger, we ought to look
back though at the effects of mergers that were similar in the
past," Cohen said. "The merger of Northwest and Delta has
indelibly shaped my image of airline mergers."
Delta still considers Memphis one of its eight hubs,
although it does not dispute the reduction in flights there
since before the Northwest merger. The direct flight to
Amsterdam stopped running last year.
Delta spokesman Anthony Black said on Tuesday that three
factors would account for a reduction in flights: the price of
fuel, consumer demand and the type of aircraft involved.
EIGHT HUBS TOO MANY?
Several cities are potential candidates for change.
US Airways hubs in Charlotte, Philadelphia and Phoenix could
see an impact "because of the geography of adjacent hubs," Kevin
Mitchell, chairman of the Business Travel Coalition, said in
subcommittee testimony. Mitchell's group represents corporate
Miami, one of five American Airlines hubs, wants to make
sure it remains a hub, Representative Luis Garcia, a Florida
Democrat, said at the hearing.
Representative Blake Farenthold, a Texas Republican, noted
the large number of hubs and asked: "What assurance can you give
us that you're not going to shut one of those babies down?"
American Airlines Senior Vice President Gary Kennedy
replied, "We have a high level of confidence that the hubs that
we have today will remain in place."
A hub often means more direct flights from home to a given
destination, a perk that is attractive not only to residents but
to businesses thinking of moving to or expanding in an area.
The higher volume also translates into money for airport
authorities, which can use the funding to finance expansions.
Moody's Investors Service warned last week that the
American-US Airways deal threatens the credit quality of some
airports, including several existing hubs.
Local officials in American or US Airways hub cities have so
far shown little fear they could lose their status.
"While other cities in the country may have had challenges
in merger situations, they did not have the passenger traffic
that we do here at one of the nation's Top 10 airports and that
makes all the difference," Phoenix Mayor Greg Stanton said in a
statement after the merger announcement.
"All indications are this merger will be good for
Charlotte," the city's mayor, Anthony Foxx, told The Charlotte
Observer. "Charlotte's going to be just fine."
(Additional reporting by Diane Bartz)
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