Senate Skeptical of Airline Deals

Stock quotes in this article: LCC , DALRQ , AMR  

"Do they have the ability to merge an airline? That question is still open," he said.

Witnesses also debated the proposed merger's impact on consumers.

Andrew Steinberg, assistant secretary for the Transportation Department, indicated that mergers can create steadier carriers.

"Healthy network carriers that earn healthy profits are good for consumers, because they preserve the breadth and scope they want," and can serve small communities while maintaining fare competition, he said. "There are some industries that are quite competitive where there are just a couple of companies," he said, citing UPS(UPS Quote) and FedEx(FDX Quote) as examples.

But Mark Cooper, director of research for the Consumer Federation of America, said that UPS and FedEx leave many markets to the US Postal Service.

"The postal service [moves] an awful lot of letters that the other two guys aren't interested in moving," he said, an indication that he felt it would be harmful to allow mergers that remove major carriers.

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