Top executives of United and Continental airlines sparred with U.S. lawmakers Wednesday over their merger plan, drawing a threat for closer industry regulation if the deal is approved.
United Chief Executive Glenn Tilton and his counterpart at Continental, Jeff Smisek, received a frosty reception at House Transportation and Judiciary committee hearings and faced the sharpest public questioning yet on their proposal to create the world's biggest airline.
"United and Continental are repeating a strategic move that many airlines before them have made that has brought sustained success to none," said Rep. Jim Oberstar, D-Minn., who as Transportation Committee chairman is influential on aviation matters.
Oberstar, who believes the United-Continental deal will harm competition and raise fares, said he would explore legislation to stiffen regulation if the deal is approved. Oberstar voted for airline deregulation more than 30 years ago but said he did not envision an industry of mergers and megacarriers.
"When I cast my vote, I expected the antitrust laws to be vigorously enforced, as did others," said Oberstar, whose home-state carrier, Northwest Airlines, merged with Delta Air Lines in 2008. He also opposed that deal.
If the United-Continental deal is approved by the Justice Department, the combined carrier operating as United would join Delta and American Airlines, a unit of AMR Corp., as the three largest domestic U.S. carriers. They would hold a combined 35 percent share of the market, and United would command about half of that.
Tilton and Smisek told the aviation and judiciary panels the merger was necessary to compete effectively with American, Delta, Air France/KLM and Germany's Lufthansa.
"This is a brutally competitive industry. It is today and will be after this merger," Smisek said.
Congress cannot block the merger but can pressure regulators and influence public opinion. The U.S. has approved two big mergers and several alliances since 2005.
The Senate Commerce Committee will review the United-Continental proposal at a hearing Thursday.
While pilots expressed support for the merger Wednesday, the loudest complaints from lawmakers generally came from those whose states or districts may be negatively affected.