Kohl Pushes Anti-Trust Issue: Senator Lauds Midwest Airlines As He Objects to Takeover Bid

By Katherine M. Skiba, Milwaukee Journal Sentinel

Mar. 8–WASHINGTON — After Sen. Herb Kohl criticized the proposed hostile takeover of Midwest Airlines at a hearing Wednesday, he won a pledge from a top Justice Department official that any information sparking anti-trust concerns would be reviewed.

Kohl, a Democrat, lauded Midwest Airlines, which he uses when flying to and from the nation’s capital, as a “true success story.” He said Midwest was unique as an airliner since it offered the highest quality of service and is “beloved by its customers.”

Kohl said if the proposed takeover by the company that owns AirTran Airways went through, he expected service would be “severely degraded.”

Kohl chairs the Senate’s Antitrust, Competition Policy and Consumer Rights Subcommittee. He called Wednesday’s hearing, which drew Thomas O. Barnett, the Justice Department’s top anti-trust lawyer.

Already the department has completed an initial review of the proposed takeover.

Barnett said while the department had closed its initial review, it was “not precluded from looking at it further based on additional information.” He said he would take information from Kohl, his staff and constituents and consider whether anti-trust concerns arose. He noted that when the department examines competition, it considers competition both in price and quality.

Kohl said no one doubts Midwest’s service would suffer if AirTran bought the airliner. More worrisome, he said, was AirTran’s history of promising high levels of service when it enters new markets, then abruptly breaking those pledges. Since 2004, AirTran has left 29 markets it said it would serve; sometimes it returned with scaled-down offerings and other times, not at all, he said.

Kevin Healy, AirTran’s vice president of planning, was shown a copy of Kohl’s remarks as prepared for delivery and responded:

“It never fails to surprise me how little time facts and truth get on Capitol Hill,” Healy said. “I’m not sure who wrote these remarks for the senator, but clearly they have never flown with AirTran. AirTran Airways does have low fares, but we are far from no-frills.”

He pointed out that Midwest, too, has cut service, and that AirTran’s network has grown considerably since 2000.

AirTran’s acquisition would bring nearly $1 billion in economic benefit to Wisconsin, create more than 1,100 jobs and expand service by 74 flights and 29 destinations, Healy said.

He said the Justice Department already had conducted a “thorough investigation” of four overlapping routes shared by AirTran and Midwest and “rightfully concluded that this deal presents no problem.”

Kohl said he had experience with out-of-town buyers since his family’s grocery chain — once “the dominant chain in the market” offering superior service to customers — eventually was closed after it was sold to an outside firm, and later to another. The outsiders didn’t understand local needs and the importance of service, he said.

Sen. Russ Feingold (D-Wis.) attended part of the hearing and told Barnett he was pleased he had agreed to take another look at the proposed deal. Feingold said he was concerned the first review was concluded too quickly.

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Copyright (c) 2007, Milwaukee Journal Sentinel

Distributed by McClatchy-Tribune Business News.

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