Federal order for American Airlines to cut flights would hurt Bangor International Airport, say city officials
BANGOR, Maine — Bangor International Airport could lose successful Washington D.C. flights if the federal government decides the merger of US Airways and American Airlines violates antitrust laws, city and airport officials said.
In April 2012, US Airways announced plans to take over American Airlines, which was in the midst of bankruptcy proceedings. That merger combined the fourth- and fifth-largest U.S. airlines to create a new American Airlines.
At first, Bangor officials didn’t believe the merger would have any major effect on BIA, except for perhaps strengthening the carrier and its ability to continue Bangor flights.
However, the merger raised the hackles of several airlines and antitrust groups because it would give the new American Airlines control over 67 percent of traffic at Reagan National Airport in Washington D.C., according to Bangor International Airport Director Tony Caruso.
A year ago, the American Antitrust Institute sent letters to the U.S. Department of Justice claiming that the merger would “substantially reduce competition on a number of routes, create regional strongholds at key airports across the country, and starve smaller communities of important air service.”
The institute also worried that the merger would give more than 70 percent of the air travel market to just four companies: American, Southwest, United Continental and Delta. The letters called for a Department of Justice investigation and intervention in the merger plan.
The merger has since received support from federal judges, but JetBlue Airlines has demanded that the new American Airlines divest “a significant number” of flights. Caruso and the City Council worry that the Department of Justice will order such a cut in order to avoid an oligopoly.
“If the new merged airline is required to divest those slots, a lot of small- and medium-sized airports would be affected,” Caruso said. Bangor International Airport has two daily Washington D.C. flights, which would be likely targets if American Airlines had to chop a large number of routes, according to Caruso. BIA plans to add a third D.C. flight in the next month. During one quarter near the end of 2012, US Airways carried about 49 percent of Bangor International Airport customers, Caruso said.
“Those flights have been performing very well,” with 80-90 percent passenger load factor, according to Caruso.
During an April meeting, the Bangor City Council passed a resolve calling on the government to not force the divestiture of flights. The document was sent on to members of Maine’s Congressional delegation and the Justice and Transportation departments.
“American is committed to continuing its nonstop service between Reagan National Airport in Washington to small- and medium-sized communities currently served,” the resolve states. “If the Justice Department should force this new airline to reduce [its] routes by divesting flight slots, other carriers will take over these routes and most likely will transfer the routes to larger cities.”
“These flights are critical to the overall health and growth of the Maine economy,” the resolve continues.
On April 29, U.S. Sen. Angus King, sent a letter to Secretary of Transportation Ray LaHood, Attorney General Eric Holder, and the administrator of the Federal Aviation Administration, urging them to consider the impact that government-imposed antitrust measures could have on mid-sized regional airports like Bangor International Airport.
“As your competition and antitrust review of the American Airlines and US Airways merger continues, I urge you to consider the effect that forced slot divestiture will have on service to regional airports,” King wrote. “I stand with Bangor International Airport and other mid-sized airports throughout the country in their efforts to maintain airline service and the economic activity that such service facilitates.”
Caruso said there’s no good indication of when the Department of Justice and Department of Transportation will make a decision.