Davis supports American/US Airways merger August 19, 2013
State Sen. Wendy Davis, D-Fort Worth, during her filibuster. Photo by AP
AUSTIN – State Sen. Wendy Davis, who is nearing a decision on a possible race for governor, is urging the Obama Administration to reconsider its opposition to American Airlines’ merger with US Airways, a multi-billion-dollar deal that Davis calls a critical step toward revitalizing the Fort Worth-based air carrier.
Davis’ position puts the Fort Worth Democrat in conflict with Texas Attorney General Greg Abbott – her potential Republican opponent in next year’s governor’s race – who has joined the U.S. Justice Department, five other states and the District of Columbia in suing to block the merger.
Abbott, who is easily favored to win the GOP gubernatorial nomination, said he took the legal action because of the potential for reduced airline service to several of Texas’ smaller airports that are currently served exclusively by American Airlines and American Eagle. He also expressed concern that the merger will result in less competition and increased fares.
In a statement to the Business Press, Davis made no mention of Abbott but called on the Justice Department to “reconsider its opposition to American Airlines’ merger with US Airways.”
“This is about protecting Texas jobs and ensuring competition through the viability of a major player in the industry,” Davis said. “The merger is the last, critical piece to returning American Airlines as a strong competitor in the commercial airline marketplace. Allowing the merger plan to proceed would help preserve nearly 60,000 jobs worldwide, including those of thousands of hard-working Texans.”
Davis, who became a national media celebrity after her Senate filibuster against a Republican-backed bill restricting abortions, is considering whether to run for governor or seek re-election to the Senate. She is expected to announce her decision shortly after Labor Day, which falls on Sept. 2.
The Texas Democratic Party and affiliated groups have launched an Internet campaign urging Davis to enter the race, depicting her as the best hope for Democrats to regain an office they haven’t held since 1995.“Everywhere we go, we hear taxpayers say they want Wendy to run,” said Tanene Allison, communications director for the Texas Democratic Party.
Regardless of the outcome of the legal challenge to the airline merger, it could be a high profile issue in the gubernatorial campaign. Former Texas Republican Chairman Tom Pauken of Dallas, Abbott’s lone opponent in the Republican gubernatorial primary, assailed Abbott for siding with U.S. Attorney Gen. Eric Holder.
“It’s time for Greg to admit his mistake, pull back from this ill-conceived interference with the free market, end his legal partnership with Eric Holder, and join Texans in defending American Airlines, its employees, unions, and support vendors,” Pauken said in a statement after Texas joined the Justice Department in opposing the merger.
“They deserve better than to have their great company languish in bankruptcy courts for the next several years while a new plan is devised.”
The Fort Worth Chamber of Commerce has estimated that American Airlines employs more than 20,000 people in the Fort Worth-Dallas Metroplex alone and contributes to the employment of 175,000 more by vendors, contractors and others who do business with the airline.
The merger with US Airways is considered critical to American’s reorganization plan as it emerges from bankruptcy. Federal Bankruptcy Judge Sean Lane said during an Aug. 15 hearing in New York that he had “lingering doubts” about approving the plan while the merger is being challenged by the government.
U.S. Rep. Marc Veasey, D- Fort Worth, who has supported the Obama Administration on other fronts, has also called on the Justice Department to drop its opposition to the merger.
“American Airlines has been able to recover and regroup,” Veasey said. “But for the long-term viability of the carrier, the merger is not only necessary, but will be good for consumers as well as D-FW jobs and the local economy.”
Abbott said in a statement posted on the attorney general’s website that he challenged the merger because top company executives had said in internal emails and other comments that they thought the merger and shrinking competition would allow the airlines to, as Abbott put it, “pile even more bag fees, ticket change fees and increased fares on customers."
"Why in the world would Texas file a legal action challenging the merger of American Airlines with US Airways?" Abbott said in an op-ed article in the Dallas Morning News. "The answer is simple: We believe that actions by the airlines and their officials violate antitrust laws. In fact, the legal violations appear so overt that it would offend my oath of office not to take action."
American and U.S. Airways have vowed to fight the suit and contend that the merger would increase competition by creating a robust rival to industry leaders United Airlines and Delta Air Lines. The deal is valued at $11 billion and is expected to generate an estimated $40 billion in annual revenue.