telepathy telekinesis


Thus, with the range of competitive challenges confronting the industry and directly affecting consumers, especially in the face of unprecedented industry consolidation, we believe there is merit in the overall intent of the bill to direct DOT to actively monitor the state of competition in the industry, and to institute remedial actions as appropriate--both through recommendations to DOJ as well as actions on their own--and all with open reporting to the Congress and the public.

i would be pleased to answer any questions you or other members of the committee might have. technically, american has proposed to acquire the assets of twa, which declared bankruptcy. for presentation purposes in this statement, however, we will refer to the transaction as a merger. see the list of related gao products attached to this statement. we recognize that competition or service in particular markets is likely to change over time with the entry or exit of different carriers.
carriers may add or reduce service in markets. these data illustrate the approximate orders of magnitude of the various transactions. we did not subtract passengers or markets that may be affected by dc air markets or the proposed agreement between united and american to share the current us airways shuttle from the data for new united. consistent with definitions that others (i., the transportation research board) have applied in the past, we define an airport as dominated'' if a single airline carries more than half of the total passenger boardings or enplanements. similarly, an airline would be defined as a dominant airline'' if it carried more than half of total passenger enplanements. thus, for example, a passenger that must make a single connection between his or her origin and destination counts as two enplaned passengers because he or she boarded two separate flights. data for the total number of passenger enplanements in these airports is for calendar year 1999, the latest data available from the federal aviation administration.
``large hub'' airports are those defined in the us code as having at least 1 percent of total annual passenger enplanements. those hubs are not necessarily the same airports as those which airlines may identify as hubs within their networks (``airline hubs''). each of the 16 large hubs that we identified above are dominated by the airline that runs its network hubs at those locations. we calculated each airline's share of passenger traffic at each of the large hub airports using data from back aviation solutions. we confirmed each airline's dominance at these airports by examining current data on airline schedules from the kiehl-hendrickson group. those data reveal the total number of seats available for purchase by passengers on each airline, including their smaller code- sharing regional affiliates. as in our previous work and consistent with definitions applied by dot and others, we define a competitor as an airline that carries at least 10 percent of total passenger traffic.
other airlines that dot defines as being low-fare carriers include american trans air, frontier, national, spirit, sun country, tower, and vanguard. new american's market share of reagan national's capacity includes an estimate of the seating capacity that dc air would hold (because of american's proposed equity partnership and planned marketing agreement with dc air) along with half of the capacity of us airways' washington-new york-boston shuttle operations, which it would obtain under an agreement with united.
new united's market share of reagan national's capacity includes its existing capacity with that of us airways, adjusting for us airways' divestiture of assets to dc air and the agreement to split us airways' shuttle operations with american. several studies, including our own, have found that airfares in dominated city-pair hub markets are higher than those in markets with competition, when controlling for factors such as distance and traffic density. that report defined concentrated airports as one where an airline handled at least 60 percent of the enplaning passengers or two airlines handled at least 85 percent of the enplaning passengers. we concluded that these fares at these airports were generally higher than at airports with more competition.
see also severin borenstein, the evolution of u. airline competition, journal of economic perspectives, vol. borenstein concluded that hub-and-spoke networks are not just a source of increased production efficiency, but that they are also associated with airport concentration and dominance of a hub airport by one or occasionally two airlines.
special report 255 entry and competition in the u. under frequent flier programs, passengers qualify for awards by flying a certain number of miles with the sponsoring airline. a travel agent commission override is a special bonus commission paid by airlines to travel agents or agencies as a reward for booking a targeted proportion of passengers on their airline. corporate incentive agreements represent offers by airlines to corporate clients for fares that are discounted from the prices that are otherwise applicable. they may be stated as percentage discounts from specified published fares. dot reported in january that its review of the trb report on the proposed guidelines, along with additional analyses, confirmed that airlines engage at times in unfair competitive practices designed to eliminate or reduce competition and that it should take action to prevent such practices.
passenger facility charges, authorized originally in the aviation safety and capacity expansion act of 1990, are fees levied by local airports (with the approval of the faa) on enplaned passengers. for example, care would be needed in crafting the final language for the dot role in reviewing mergers to assure consistency with doj's authority under the antitrust laws. for example, the faa/office of the secretary of transportation task force study on airport business practices and their impact on airline competition'' (october 1999) already outlined a number of specific measures that were needed to ensure competitive access at major airports, including best practices that they identified for replication by various airports. in addition, the recently required airport competition plans have recently been received in dot. the committee may want to consider calling for an update on the 1999 report and the status of specific actions dot has taken and are underway to assure airports are meeting their obligations to ensure competitive access to airports.
i take your recommendations very seriously, obviously, and i think it's--this hearing was planned before this week, when three startup airlines have declared bankruptcy in the last few days, i think, lending some urgency to this issue. chairman and members of the committee. i'm glen hauenstein, senior vice president of scheduling for continental airlines. you need to the microphone a little bit closer, please. all of at commend this committee for so swiftly on legislation. let me start my testimony today with statement about continental's position on proposed mega-mergers. as know from the hearings you've held in room and from the testimony from the gao and others, the impact of proposed mega-mergers will be from one end of country to the other, hurting consumers, communities, and employees.
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