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Public Statements

Delta Airlines

By:
Date:
Location: Washington, DC


DELTA AIRLINES -- (Senate - December 06, 2006)

Mr. ISAKSON. Mr. President, I rise for a moment in morning business to address an issue that to some may appear only to affect the State of Georgia and maybe even in particular the city of Atlanta. But in practice, I say to the distinguished Senator from Utah who is in the chair and others, this is an issue of major import to the United States of America.

An offer has been tendered for the purchase of Delta Airlines. Delta Airlines is a great American carrier that, like most airlines, has gone through terribly difficult times post-9/11. Delta went into bankruptcy. Delta has worked hard in bankruptcy to develop a plan to exit bankruptcy as a healthy, thriving, and dominate company. To Delta's eternal credit, their management committed from the beginning that they would honor and preserve the pension plans of their employees were we able in the U.S. Congress to modernize the pension laws in this country to allow them to do so.

Thanks in no small measures to yourself, Mr. President, and to Senator Hatch as well and the 97 Members of this body, the pension modernization bill passed. We put in specific provisions for the aviation industry, and great airlines and their employees now will be able to earn their pensions and not have them dispensed with because we addressed that crisis, and more importantly Delta Airlines' management has worked to reduce its costs, and its employees have voluntarily taken pay cuts. They have modernized their fleet. They have repositioned their fleet. They have opened international marketplaces that never before were available to people in this country. They have paid the heavy price that only in the great American free-enterprise system are you able to do where you take the problems and adversity and turn them into opportunities.

Now on the doorstep of exiting bankruptcy and filing that petition, a hostile takeover has been made to purchase that great airline.

Before I came to the Senate, I was in business. Nobody understands buying and selling companies and opportunities better than I, and no one would ever diminish those who seek to take advantage of those opportunities which are there. But I rise for just a minute to make some points that I hope all of us in this Senate and the appropriate committees in this body and the appropriate agencies of the United States are very careful to examine before any acquisition or merger of U.S. Airlines and Delta Airlines were to take place.

First, in our fragile aviation system it is critical to understand that competition is still in the best interests of the American consumer. If you overlay the routes of those two airlines, you will see massive duplications, which ends up in many cases that where there are two competitors in an airport, it is reduced to only one. In the absence of competition, prices rise and service is diminished.

Second, in the great hub-and-spoke airlines and the legacy carriers of this country, people in secondary markets have had access to the major airports such as O'Hare and Hartsfield and LAX in Los Angeles. But as you merge two together, the first place they find savings is in reductions of those flights and those capacities from those secondary markets--the Augusta, Georgias; the Columbuses; the Meridian, Mississippis; the Asheville, North Carolinas; and many other cities such as those around the country. It is very important for us to be sure, when we analyze the viability of such a proposal, that we not diminish the opportunity for Americans in those cities to be able to access aviation as they have in the past.

Equally important is the future of aviation in this country. A further consolidation of the airlines we have now would lead us to singular service in many cities, an absence of competition, an inevitable increase in rates, and, unfortunately, less than the healthiest aviation industry in the country.

As this proposal has now come forward, it is important for us in this body to analyze from a competitive standpoint, from a competition standpoint, from a consumer interest standpoint, from a marketplace standpoint, from a secondary market standpoint, and from the heavy prices that have been paid by the American aviation industry to reposition itself post-9/11 to make sure we honor those that have paid the price, are prepared to exit bankruptcy as a viable competitive airline, and not allow a quick, hostile takeover at the last minute and threaten competition, secondary market service, lower flight costs, and the great reward of America for paying the price to do the right thing, to exit bankruptcy and come back stronger than ever before.

I respect this great system. I respect greatly Delta Airlines and the price its employees have paid. I respect greatly the management that committed itself even in bankruptcy to ensuring its employees come first, their pensions would be honored, and they did whatever to see to it that was a reality.

As one Member of this Senate, I will call on my colleagues to look diligently at all of these questions as we move forward and make sure we honor competition, that we honor the secondary market, that we honor the employees of this great airline and do everything we can to preserve the modern competitive aviation system we have today and do not succumb ourselves to the threat of massive consolidation and an absence of competition.

I yield the floor.

http://thomas.loc.gov/

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