Senate Skeptical of Airline Deals

Senators questioned the benefit of airline mergers at a hearing in Washington on Wednesday, and some suggested that the government should become more involved in the industry that was deregulated in 1978.

"When I say re-regulate, the whole world goes crazy," said Sen. Jay Rockefeller, D-W. Va., who heads the Senate Commerce Committee subcommittee on aviation issues. "However I am becoming increasingly convinced that some regulation may become an option to make sure small communities are not harmed by consolidation."

Rockefeller said a merger between Delta(DALRQ Quote) and US Airways(LCC Quote) would likely lead to additional deals.

He asked the CEOs of the two carriers whether they could work with the Transportation Department to find ways to serve "rural communities by means other than the classic market system."

Delta CEO Gerald Grinstein and Doug Parker, the chief of US Airways, agreed that they could. But they agreed on little else, as they battled over US Airways' hostile $10.1 billion takeover bid.

Consolidation appeared to have few fans at the session. The hearing room was packed with uniformed Delta pilots, who have strongly opposed a takeover.

"Take a look behind me at all of the people from Delta who have come here today to let you know by their presence how strongly they feel about this," said Grinstein, in his opening remarks.