Possible merger of Delta, US Airways worries Utah legislators
A Dec. 4 letter from four legislators to U.S. Attorney General Alberto Gonzales urges a Justice Department review of the potential impacts of the merger on all U.S. markets "and the important competitive and economic consequences to the communities where these airlines serve."
The merger "raises potential risks that could harm not only Utah's airline industry but also the economy of the West as a whole," their letter states. Utah could suffer if Salt Lake's Delta hub status is lost or diminished, and Utahns could see fewer flights, higher air fares, fewer nonstop routes, fewer airline choices and other potential problems, it said.
"The reason we're so concerned is that Delta is the hub. It is an economic vitality for Utah," Senate President John Valentine, R-Orem, said Wednesday during a news conference about the letter. "With US Airways having two other hubs — in Phoenix, 500 miles away, and Las Vegas — it just makes it so that we know that we're going to have an economic impact if we have a consolidation in this area with a new player in this market."
"The value of having a hub in Salt Lake City cannot be overstated," Curtis said.
US Airways announced in November its intention to execute a hostile takeover of bankrupt Delta, but Delta executives have said they intend to remain independent. Since announcing its bid, US Airways representatives have said the Salt Lake hub is safe, as it would serve cities different from those served by Phoenix.
But Valentine said Wednesday that it seems "too risky to assume that a major airline is going to have three hubs in the close proximity of Las Vegas, Salt Lake City and Phoenix. You cannot economically operate three hubs in that area."
He also said he fears a "more lopsided market if we have a major player come in and take over this along with the other hub operations that are in the West. That consolidation is going to make it so that we have higher fares in Utah."
"Delta has been very good for the state of Utah, and the state of Utah has been very good to Delta," said Senate Minority Leader Mike Dmitrich, D-Price. "It's been a good marriage. I think anything that would disrupt this hub in the state of Utah would be very detrimental to all of the citizens of Utah and to the people who travel to and from Salt Lake."
Curtis said Utah's legislative leaders are not calling for statutory changes. "Those laws — those antitrust, anti-competitive laws — have been on the books for a long time, and there's legitimate policy reasons behind them," he said.
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