Committee chairmen in the House of Representatives are, among other things, gatekeepers. They can speed things up or slow them down. And if they want something bad enough, they can often get it.
Thus, when a committee chairman backs a piece of legislation, you notice.
That brings us to Rep. James Oberstar (D-Minn.), who says he's concerned that the U.S.-Europe market is coming to be dominated by three big airline alliances, each one shielded from antitrust laws. Oberstar believes it's time to "reassess" that situation. We agree.
He has introduced a bill that would direct the Government Accountability Office to conduct a yearlong investigation into the way the Transportation Department has dispensed immunity, including a detailed analysis of the benefits to airlines and consumers and the impact on customer service and competition.
The DOT would get a year following the receipt of that report to decide whether to make any policy changes based on the GAO recommendations. Oberstar has warned that "there may also be a need for further legislation."
In any event, all existing and future grants of antitrust immunity, if any, would be limited to three-year renewable terms.
All this sounds like a long-overdue reality check for the new leadership at the DOT, but we have to ask: Why not put it on a faster track? Oberstar himself has said, "We cannot afford to be complacent about the threat to competition posed by these immunized airline alliances." If that's the case, why not speed things up?
We don't think there's much the GAO can learn about the airline industry in 12 months that it can't learn in six. Nor should the DOT require a full year to review and act on a GAO report.
We can appreciate the fact that this process might end up requiring the airlines to unravel some relationships, which will take time, but if Oberstar is correct in his suspicion that immunized alliances raise fares and reduce competition, then why not pick up the pace?
Also, no thank you
As much as we agree with Oberstar's instincts about antitrust immunity, we part company on the issue of foreign investment in U.S. airlines.
He's determined to keep a lid on it, and he supports language in this year's Federal Aviation Administration reauthorization bill that would strengthen the existing law requiring that U.S. airlines be under the "actual control" of U.S. citizens.
On this question, his mind seems to be made up. He is not asking for a yearlong GAO study to analyze the situation and propose alternatives.
That's a shame, because we believe this is a question that demands more creative thinking from our government leaders. Oberstar's posture -- digging in his heels -- isn't a particularly constructive response. We should be looking for ways to create reciprocal opportunities with our trading partners, rather than maintaining protectionist barriers.
As long as U.S. airlines remain subject to U.S. laws regarding taxation, labor, safety, consumer protection and corporate governance, there seems to be little reason to require that the management team be led by U.S. citizens, and little to fear from foreign sources of capital.