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The Honolulu Advertiser

Posted on: Friday, January 11, 2002

Merger of airlines is not yet a done deal

We remind those preparing for the possible merger of Aloha and Hawaiian airlines that federal and state approval are not merely pro forma. Proponents of the merger have yet to convince the relevant regulatory bodies that this development is in the best interest of the traveling public.

With this in mind, then, it is prudent for unions representing employees of the two airline unions to look into plans offered by management that should reduce the number of those losing their jobs as a result of the merger. Management is offering furlough protection if the unions agree to new contract terms and merged seniority lists.

This might turn out to be a good deal for the unions. But the discussions must be open and transparent. And above all, it must be clear that such changes take force only if the merger is approved, and have no effect whatever if the merger is aborted. In fact, that should go also for other contemplated pre-approval consolidation measures.

Greg Brenneman, the executive who will lead the merged airline, has said he hopes he won't be stymied by antitrust regulations that prevent the two companies from beginning to merge their operations until the deal is closed. His best hope, he says, is the emergency antitrust exemption passed by Congress in response to the Sept. 11 terrorist attacks to override those antitrust regulations.

That exemption, for instance, would allow the two carriers to consolidate their schedules "right away, so we don't have to burn a lot of cash between now and the time we can actually put the airlines together," Brenneman said.

Congress will undoubtedly want to know how an emergency exemption, represented as a good-faith effort to protect Hawai'i's vital air links in the dark days following Sept. 11, can now be used instead to help consolidation of those air links and make the process less costly.

In announcing their merger, the airlines said the public's ultimate protection against excessive fare hikes and reduced service was the threat that someone would start a new airline here if dissatisfaction were great enough.

We must hope that the effect of the emergency exemption passed by Congress will be what was intended — to protect the flying public — and not simply to protect the merged carriers from new competition.