of getting to the capital and passengers who live close to d.c. a said there's not a perfect substitute ability between all three markets. >> mr. kennedy,substitute abili three markets. >> mr. kennedy, prior to the merger announcement what were the slots used for? with the large american parings? >> we serve a number of airports out of reagan. not as many small cities as u.s. air because they have more slots than we do but we serve a number of airports. i don't know the exact number. >> if you could get that information. >> we could do that. >> mr. leocha, i understand your focus and frustration with what has transpired in the aviation airline industry. you bring up a very important point. nobody more frustrated by

airlines dumping employee pensions only to have employees greatly wiped out for a lifetime of earnings. i understand your frustration and your concern. mr. kennedy has said in this case they are not dumping this at the doorstep of the pc d g e which would seem to be good news. and my misunderstanding something? >> i'm not talking about dumping things on the pcbg. i was talking about a specific situation in the american airlines flight attendant union where twa flight attendants were stapled to the bottom of the list. the data of higher issue and that is something i have for years had friends who went through that and i think is something with that needs to be fixed and i applaud by the way american airlines and usair way

is for not choosing to dump everything on the government and find a way to work it out. i was glad to see that happen. that wasn't their first choice but it was eventually their arms were twisted. >> from what i understand they also think that is good news. the date of service issue needs to be fixed and we need to look at this issue of how does airline consolidation impact pensions and pension obligations. i also believe when we had this discussion as related to usair and delta air lines there were a lot of pilots in the back of the room and they were not for the merger. there are a lot of pilots who are for the merger. i want to understand this point, mr. parker kennedy and if you want to comment on that. >> i was here for that as well.

as you recall, the distinction of course in that case is employees of delta airlines wants to remain independent and the distinction is the employer's of american or u.s. airways understand the best thing for them or their careers or their livelihood is to compete with the other large carriers out there, united, delta, southwest, and they know and understand and have done their work to understand this is in their best interest and can speak for themselves and they have and they are excited about this and excited to have their support. >> senator ayotte. >> thank you. i wanted to ask miss kurland, the new american airlines' potentially control approximately 67% of the slots at d.c. a.

as i understand it their passengers will account for 50% of that. of the total passengers using the airport, and as part of that, many of the slots used by smaller regional aircraft serving smaller or mid-sized communities. how does dot intend to assure access to the nation's capital for these smaller communities? i represent one in manchester that obviously has an airport there from u.s. air or fly directly to reagan and wanted to get your thoughts on how do we ensure that the smaller airports are not getting hurt? >> thank you, senator ayotte. the provision of service to smaller and medium-sized communities is a priority for

the department of transportation and in terms of whether or not justice decides there should be a divestiture or should not be a divestiture, we think if there is one it shouldn't necessarily hurt small communities but marriage carrier has a slot portfolio that would be sufficient to serve the needs of smaller communities as well. >> if the o.j. decides to require the new american to divest its locks in dca and other locations as well is there a spell out procedure for distributing them? if so what would you anticipate that being? is it a competitive auction process that operate at dca or will certain airlines get a preference? carriers with the smaller dca presence, how would that process

work? >> the process is up to doj. it is frustrating not to be able to talk about the process but that is something that would be up to doj. >> would you have been put in it? >> we would need to talk to doj and provide input. >> this is a really important issue. when i think about it, communities like manchester, new hampshire, that i represent, i hope your attention will be paid to those communities because it is important for economy or my state, i am sure others are in similar situations. i wanted to ask you, you said there would be an impact, mr. leocha, on places like boston. would you explain that more? >> let me talk about the pilot

issue. i get phone calls about every week from people from u.s. a p a, u.s. airways pilots association. everyone is not happy. there are still lot of questions and obviously there may be support for the merger because they are getting rid of someone they don't like or getting paid a lot more money but that doesn't mean necessarily we are not going to have labor unrest. back to the smaller airports what we did when we did our overlap study we found out airports like boston and bradley have some of the highest numbers of these overlapping connecting rooms so what happens is american airlines has we 3 or four routes back and forth between bradley and seattle or bradley, they might go bradley,

chicago, seattle and someone might go bradley, philadelphia, chicago. as we right size it, it means we could end up with fewer routes in and out of those airports. and to combine some of the roots. the other thing that could happen is two separate handling agents at those airports, those airports are going to end up with this place and. somebody is going to lose their job and that is the way mergers work. the whole reason is to combine operations and throw somebody out of work. we may not see the airline lose jobs but you will see people who are ground handlers, people who are caterers and so on who may end up losing their jobs. that is where it will work out. seattle is one of them, minneapolis st. paul is one of them, bradley, boston, these are

significant non hub airports that end up being losers or could be losers in this operation. >> my time is expiring. could mr. parker and/or mr. -- i don't want to take their time. >> sure. i disagree. the reality is first off as it relates to and labor issues i would defer to labor leaders who represent those people who are supportive and we appreciate their support and indeed have contracts and will go in place as the merger closes. as it relates to airports and changes he in reduction in workforce, not the case in this merger, just wrong, we are going to put the other two airlines that are highly complementary, 900 the we fly combined, 12

overlaps, we have said and believe we will continue to fly and need to find to all the markets we currently servants continue service to those markets because that is how the merger is bills, two complementary networks. we made commitments that are consistent with that. we have through the american bankruptcy confirmed large orders for initial aircraft because we know we will need those airports and committed to our employees to no further class production. we need our employees. the of done these things because we are certain this is about putting two airlines together and having a stronger airline by having it the same size not because of reductions like mr. leocha indicated. >> senator blunt. >> thank you, chairman. miss dillingham, do you have

anything to say about the slot allocation? are you involved in that in any way? >> we won't be involved in the site allocation. we have done some work onslaughts before like last year, and we've made some recommendations to dot, to and force, but better enforce the slot rules particularly the idea of an airline using the 82 months room where you have to use 80% within two month, that sometimes what we saw, with a lot of frequency just to hold on to the slot where it could have been better used and if that oversight we asked dot to look at further. the other thing about these lots is as we said in our statements,

where those slots are, fears tend to be higher and difficulty for new competitors to come in to those airports but it is important, what is important, one of the important parts to realize is even if slots are invested or maintained by the new american is not clear that those same routes will be served. a new competitor is able to obtain a slot they may decide to fly to a more profitable group. although u.s. air and the new american made commitments to maintain the services of small and medium communities, that may be difficult when reality takes place. of you are asking the airline to maintain a route that is not profitable as we see emerge is in the past sometimes it happens

and sometimes it doesn't. there are two slides to the slot going and a lot of what is being said we have to see. we have to find out what the american has to do. and whether it is consummated as a new airline. >> you mentioned there would be plenty, your word, slot portfolio would be sufficient to meet the needs of small communities. is a commercial decision made

by the airline. >> i thought senator ayotte's dental was well taken that 70% of flights might be between these two airlines' but barely 50% of passengers and that is a pretty significant difference in looking at how they compete and where they compete. before i run out of time here i do want to mention a topic that has been around long time that if there was any way to possibly eliminate some of these employee equity issues, twa was bought by american and ozark by my home town by twa and america west and u.s. air merger, everybody is familiar with these issues. everybody, i think, realizes,

senator mechanical work hard to get some legislation so a similar thing didn't happening again but everything has been slightly different or at least it never goes back and corrects the old problem. i actually think everybody involved decided we are going to treat other people like we would want to be treated this would work out pretty easily. i am in the senate. that seldom happens here. that seldom happens anywhere else but -- >> on this committee. >> on this committee, it always happens, we are always treated fairly and equitably and like she would like to be treated and that is pretty true. this may have been answered while i was gone. i feel like came in in the middle of this answer. anybody want to talk about these problems and how they can be dealt with? may be mr. leocha, anybody else?

>> they are having issues in the past as airlines re-emerged, seniority integration, indeed those issues, i wasn't around for the american/twa integration but her allotted about it from employees there but those are generally determined not by the company but the union leadership and they want to determine how the work is integrated and it hasn't been a problem. thankfully has been addressed through the legislation which now requires if unions can't become an agreement to those of by the arbitration and this will happen here. that is a perspective solution, that is what is going to happen here. as to what happened in the past it is difficult if not impossible to correct, to go back and correct things that happened in the past. by enhancing security you are reducing others and that makes

it difficult to unchanged things that have occurred in the past. that is more of a union-union issue. and going forward, if indeed unions can't result themselves to go to binding arbitration which is a great solution. >> thank you. senator klobuchar, i want to get these members in before we have a vote. >> thank you very much an thank you to all of you. mr. parker was at the hearing senator lee and i had a we sent a letter yesterday together to the department of justice highlighting the concerns that have been raised during our hearings and some of them have been mentioned here, the results of this merger and other mergers that the nation's top four airlines control nearly 90% of the market. recent concern, few days and weeks of each other, a legacy carriers raised their ticket fees from $150 to $200,

elimination of competition on 17 city and 12 airport and seven routes where american a u.s. air waves are the only carriers providing service and concentration of combined companies with 70% of slots that have been discussed by many of my colleagues at reagan airport so those were a few concerns we mentioned. i want to mention minneapolis st. paul is a major hub for delta. you said we were a non hub airline airport, we welcome you there because travel and leisure voted as the most cheerful airports in the country and the most welcoming airport in the country and so we're very proud of our airport. that being said at the hearing i discussed several issues relating to those not on hub airports. is happening in pittsburgh and st. louis, cincinnati and other cities where the results of the

consolidation is so many fewer flights and very concerned about that. i thought senator ayotte did a good job asking questions as senator blunt mentioned, that making sure if there is divestiture, that it would be able to be competitively bid, but concerns have been raised about potential divestiture and if it would lead to the merged company reducing service to small and mid-size markets, what is your view of that? >> thank you, senator. as i mentioned, if there were to be a divestiture of the merged airline would still have a substantial portfolio which would be made up of air carrier and community slots and would not necessarily have to hurt small communities. it would be a business decision of the carrier as to which

communities they desired to serve. the air carrier slots are for use, aircraft with 76 seats or less and the idea is those are particular least suited for small and medium-sized communities. >> one other question. inflation-adjusted prayers relative to recent decades have increased 16% since 2009 and that is where the most recent wave of consolidation began. could you comment on the causes of that and is there a correlation between the price increase and the mergers? >> an important question but also important to take a look at the economic situation as a backdrop for when these mergers were taking place. we had the economic downturn in 2008, we have been in a seemingly high situation of

permanently higher oil prices. the airlines have taken a number of steps in order to achieve profitability. they have become much more rigorous. >> how about the fact a lot of rates between on hub cities of gone up so much. does that concern you compared to other cities? >> yes. one of the points is cantwell they regulation the government was taken out of the equations of setting rates and setting routes. becomes a market decision, business decision for the carrier's. the only areas where we have some ability in that area is in the program. >> wants to comment on that? >> i know minneapolis st. paul. >> that is excellent, thank you. quickly, though. >> american airlines, that is what i am talking about. you are in danger of that kind

of right sizing from these airlines, close when they are face-to-face with another big tumble like velvet it might be in their interest to back away elderly bit. >> usa and it is time for one more question, you think a merger could be contributing to these fare increases. last, this issue of change fees going up from 150 to 200, and united raise fares, american, delta and usair followed their move and increase their fees. mr. parker, what if anything changed in of a market that suddenly necessitated this fee increase? >> the reality is >> reporter: these non-refundable tickets, we and other airlines provide non-refundable fares that are much smaller than refundable

fares in order to the customer agrees in that case give us certain things at certain times which is a different product than people who buy a ticket that says i want to go tomorrow and when i am ready to go we will see to open for of them but to provide, be able to ride lower fares we provide products and if you are willing to lock in your time to fly we will fully one non-refundable ticket. changing that, making a change to that is expensive for airlines. >> we go down to four we will see more lock step behavior. down to 3 we will see more. >> discourage changes. >> senator warner. >> thank you for this hearing and acknowledge the fact in my four years here this issue of slots probably has as much

controversy as any single item i have been involved in and one of the things i would like to point out, made mr. parker, since the merger goes through, enhanced presence, as we had the at a a -- c f a a reauthorization, we're going to do with slots and there was lots of conversations that said a few more here or there, it won't make that much difference. the point i faced from the virginia standpoint when you think about washington air traffic and i can speak for my colleagues from maryland who concurred with me, there were agreements made a long time ago that we had three airports in the region, national, twa and dulles, financial commitments were made based upon those

promises and that is slowly being nicked away. the question i have is we were all assured the additional slots particularly for the west coast would not have any affect on boneless and the challenges, i say this as someone who benefits from those new national, the numbers say otherwise. we have seen numbers from 2,011, 16.7 million passengers coming through dulles down to 2012, 800,000 passenger loss, thinking about flights to europe, west coast of europe has enormous ramifications and it has been challenging as we think of the ability of these combined airport authority to be able to bond which we were not able to june. i would like to make sure as we go through this analysis in your

role, i know doj has either the needs to roll in but my hope is you will continue to weigh in and we won't see further erosion of the rule and there has to be recognition of the commitments made to dulles and financial projections on a changing set of rules will be taken into consideration. >> thank you, senator. the heart of what we look at is this issue of competition. with respect to the slots at dca congress has always taken a very special interest in the number of slots, a perimeter rules, makes the decision -- >> quite aware of that. >> in terms of the competition and the roots, this is something clearly that doj took a careful look at.

>> i don't think you answered my question at all. there is a view the relationship of an airport's of florida of a compact between the federal government, local jurisdictions and commitments that were made that said national is going to have short haul, we are going to have a perimeter and significant, major investments from the united states government, the commonwealth of virginia and the region because there were a promises made about how items are protected. those are basically not the way. my fear being this merger may result in an effort at the next reauthorization to do away with it. i am concerned if you simply say on the competition standpoint, from the dot role, this obligation the federal

government made in setting up this airport authority and commitment to dulles has not factored in at all. are you saying that? >> what i am saying is we will look very carefully at the competition among the different airports and the like but in terms of slots be on the perimeter that is beyond our jurisdiction because it has been determined by congress but in terms of competition, in terms of the routes that are being served we will take a careful what can go back and take a look. >> you have to look at the numbers in terms of traffic in and out of dulles. let me get to mr. parker, the chairman rockefeller is not here. e wanted to ask a similar question everyone else has been asking, commitments and promises made the last time around that there would not be decreased

small markets that some of these might be moved elsewhere, to west virginia. he feels that is not happening. put that on for the record but i would like to ask mr. parker, with the idea of moving dca into a hub, how are those costs going to be absorbed or passed on to dca customers or absorbed in terms of the combined airline, where does that shakeout as you think about dca? >> to address but senator rockefeller's question was, we heard others have been here and made a promises people feel were not kept and are highly, and dozens, all i can tell you is what i know. i can speak for what they believe at the time but because of what has happened in the

past, skepticism for what we're saying we are being careful not to make any promises but rather to tell people what we know at this point about what we believe is going to happen and what we know. these networks are completely complementary. 900 routes, only 12 were competing with each other and the intention is to put the and together and maintain service to all the communities we serve and have support of that commitment. >> could you kick the habit issue as well? >> sure. as it relates to the hub. d.c. f is important to us and to the community as well, where we have done at u.s. airways a very nice job getting service to communities that would not have service otherwise by having a home. we are able to serve small communities because we have connecting service. there would not be service like that. the cost of an airport as is the

case with all airports to the extent we have improvements at reagan national airport which we would like to see and working with the authority to get in place things such as getting rid of the busing service which would be a great service to the flying public to the extent those are costs incurred by the airport authority and passed on through rates and charges as is always the case and we pay those charges in exchange for better customer service. >> senator pryor. >> thank you for all of the panelists for being here today and faint you for your leadership on this. let me start of time a with miss kurland and a follow-up on what senator warner was asking and others talked about this. when you go through something like this will the department of transportation provide the department of justice a list of

recommendations, destinations or criteria that should be used in determining what slots are available for what city's? >> our discussions are iterative process, we will talk to them about the competition issues and the service issues and the service at dca in particular and as i say it will be an iterative process where the discussions will be comprehensive on all issues. >> you made recommendations on what cities and airports should serve or do you believe that is left to the airlines? >> since deregulation it is in the purview of the airlines to decide what cities they are going to serve.

at dca as i mentioned, there are carrier swaps and commuter slots and the commuter slots as you know far for aircraft of 76 feet or less and particularly suited towards communities but in determining where a carrier will serve is up to the carrier. >> i think that leaves me to ask you a question which is you have a situation at national airport for example, state capital or national capital flight switch to me make sense. we have one of those flights currently through u.s. air as you know and i am curious about your criteria. obviously profitability, i get that. a few years ago there were some slots that changed hands, they exchanged hands at national and

i look up and whoever the new carrier was meant they had four flights to atlanta. people can catch a flight every hour to atlanta and just curious about the factors you consider when you make those decisions. >> thank you. i thank you for your letter in support of asking attorney general eric holder and secretary load to consider small community service. as ms. kurland said this is a business decision. explain the business decision we made which was your question and point out we had recent history that supports what will happen going forward. as has been stated u.s. airways and american combined would have two thirds of slots but also as stated that is only 50% of seats because we do fly small aircraft to small communities and other airlines to have a 1-third of

the slots but find half the seats with a third of the slots. at if you look at the entire market include dulles and baltimore washington we have less than 25% of seats fewer than united, the same as southwest. it is a very competitive market in terms of seats so we would encourage the department of justice follow the criteria in senator klobuchar's letter, do the work, given us enormous scrutiny, follow the law. what the know if that is the case, so much consumer benefit in this merger it will be approved. there is no law that would come close to suggesting there should be divestiture of slots but if that is done, despite the fact is not what but rather a choice of policies to ask us to divest slots and give to another carrier, what it will happen is

as the business decision we keep referring to with the definition of scarce resources continue to use good ones that are given and reduce service to those that are the least lucrative as we should do as business people. what that means is reduce service to small and medium-sized communities, the carriers that give this loss won't fly to those communities but will fly to large communities. you don't need to just trust me on this. this happened a year-and-a-half ago when a through the delta/u.s. divestiture that was forced upon us jetblue acquired 16 sloths, roundtrips, we were forced to reduce service to small communities. jetblue took those eight round trips and flew to boston increasing boston from 22 times a day to 25 ten of which are jetblue. two to for lauderdale, two to orlando and one to tampa all of which had six flights a day

already. we, combine delta and usair ways end up reducing services. the result is a madison, wisconsin lost service complete the. michigan law service complete the. if we are up to the same thing again, madison and grand rapids agone. we would like to still be flying them but we can so we move a trove listed. it will affect markets we want to fly to. that is the policy decision being made. it is a policy decision and i was encouraged to hear this evidence a service to small and medium communities is a priority, if it is this is not a policy issue that should be affected. this isn't meant to sound threatening. i want everybody to understand what will happen because i don't want to come to each of you and say we have to review service to manchester or any place like that.

the shortage is the criteria is profitable. those communities are profitable for u.s. airways because we connect service over the. we won't be profitable for any other airline. b plus to get from little rock to manchester and they're doing it over d.c. and if this has to go away it puts both of them at risk. when you have a hub and take away spokes, to maintain spokes. >> i am out of time. one quick follow-up. does the airport have any input in this or is it totally up to them? >> it is an airline decision. the airport can influence vote regulator. >> thank you. our 3:00 vote hasn't materialized so i intend to have a second round of questions so any of my colleagues who wants to ask follow-up questions, please say and do so. i guess the good news from the

first round of questioning is in all the discussion of merger issues the one thing that keeps popping up in slots, that is somewhat good news about the overall issue of the merger but might not be so good news as relates to slot. or the stickiness of that issue. this is a very important issue to many colleagues as you can see. airports are tools to economic development and if it doesn't mean air access it is pretty hard to grow the economic base. mr. parker, since we look at the modernization act, u.s. airways sought to convert 100 existing slots that you had within the perimeter and switch them to outside the perimeter so you want to take dca slots and a month's service these farther destinations in the west. a lot of these a you are going

to do now what you are suggesting might happen. basically people said you will start servicing san diego or some place else and get rid of the madison, wisconsin flight and at the time u.s. airways said we have the flexibility to use these flights for large hub service in small cities will not be impacted. that is what you told many people on his committee. we are advocating the opposite. we have to divest and impact those hubs. 5 want to make sure i am understanding from your what was previously said what the difference is because i think there are other economic issues about competition doj has to look at larger than just the individual hub airports issues

but how much service should dca be allowed to be concentrated under one carrier and what does that do to impact in price and availability? that is i i think the department of justice should be looking at it. are you saying you don't support the issue of divestiture? >> as relates to this merger? we don't believe there's any reason, no legal reason, it is a policy issue and one we think is bad policy. that is correct. you raise the perimeter issue. >> you had a different title. it seems like it is an issue looking for a cause. it seems you wanted before to switch out 100 slots a news from long-distance and when someone said you are going to get rid of small cities use that we have enough flexibility. now that someone is saying give up some of these locks i can't because i will end up cutting

service to these essential areas. >> what is the alternative? the reality is in relation to the perimeter rule, what we argued. >> you were wrong before? >> let me explain. our position was we believe, d.c. would be better served with more flights outside the perimeter to provide more service to more communities that exists today. understand two things. one, the desire not to increase capacity at reagan which again is fine by us if that is what the law is going to be, that is fine. to stay within that constrained and also wanting to make sure we adapt more responsive to concerns with small, medium-sized communities that said and agreed what we would like to do is in exchange for the abilities of file size the perimeter we would indeed divest

from larger markets but that is a different question. when that is the alternative to that of light outside the perimeter would you give up one in sight to a larger community. the answer when asked was yes. different question, if you ask we have to take slot away from you we are going to because of some policy decision, decide to take away slots so the alternative is you have to cancel something, not swap it for something. the decision will be and should be to cancel the routes that are producing the lowest amount of revenue. small and medium-size communities. >> your conclusion is the right conclusion, that anybody would do something that is in the interest of the business and getting rid of less profitable routes, but the reason why someone would look at divestiture, it is not some policy, it is about competition, too much concentration, and what

the shoes for the consumer are being left unprotected. i don't know if you want to comment on that. >> i have spent a lot of time on this issue and met with dot the >> i don't think he's the more time than senator warner and die but if you have we are glad to let you join our club. >> i would be glad to join you. i met with susan kurland's staff and we know the department of justice was not happy with at least as i interpret it not happy with dot's solution is we have a situation where we just can't have competition when 70% of the market is controlled by one airline and basically with u.s. there is doing is even though their altruistic recovering and reaching out to small communities they are doing it with very small aircraft. the smallest aircraft of any hub in america comes in and out of

d.c.. i look at the d.c. slots as a national treasure there to bring people to the nation's capital so that they can interact in the capital of the united states and almost 40% of people who fly in and out don't even stop here. they just change planes. i am sure mr. parker doesn't mean he will eliminate the service because they still make money doing that. the service might move to baltimore and dulles. five years ago that would have been a real problem. today we have great connections between baltimore and downtown, mark trains, amtrak trains, buses to the metro and i am someone who gets to take the mall or take gold bus 5 a out to dollars from roslyn and soon we have a silver line. a lot of problems we used have

in terms of you had to be going in and out of dca or was too inconvenience are leaving. we need to increase the number of people being able to come in to our nation's capital and come here at visit here, spend their money here to learn about our government. that is where i think living slot around will be important. if the merger has to go through this is a remedy and there should be other remedies because this only covers one tiny little talk of it. >> senator warner? >> thank you. let me again, 98% of us last struggle on and on on this. mr. leocha, one comment i want to make before i get to mr. parker is i agree that the silver in line, transportation in between various airports will get better but it has that

dramatic affect on particularly for lows of traffic international. if you don't go through dulles, if you make the international connection instead through philly or wherever else, we have seen that the kline, all the promises that this will not affect dollars, don't worry, don't worry. and now particularly mr. parker, not the changes and stuff and he wants to come forward, not looking back but commitments going forward, if we are going to go forward and understand the notion of building up the hub at dca which would seem to mean that it would be a further investment in having that routing to smaller communities so that somebody moving from his little rock to manchester vienna dca, good for all concerned, still get traffic to dca. my concern and i hope you will

assuage that is with this concentration, as your company did last time, will be leading the charge on authorization to get rid of the perimeter rule. i can see a business case for that and i feel that goes against the grain of commitments made from the federal government with the unique nature of the airport authority and i hope you can assuage me of those concerns. >> certainly. where we ended up last time on the perimeter wall, fully cognizant of the perspective of you and your constituents that a desire to have no more increase in flights in and out of reagan and desire not to see reduction in service to small communities so our proposal which came in

smaller than we requested but was implemented and a small was so long as the carrier has a flaw or owns a slot and is willing to divest one of the ones to enlarge market inside the perimeter you can use that to fly out of the perimeter as long as u.s. airways now flies to san diego and americans los angeles and redo's one swatch to places like dallas or chicago, that was good legislation and helps d.c.. it didn't increase any flying to d.c.. i don't think exemptions just adding more flights is a a good idea. >> that did have a negative affect on traffic through dulles in terms of its ability in terms of international law hall substituting that flight and i thought it wasn't what i was keen on but there was a logic

between major market, i get that logic. my fear is with this further concentration the next step would be the basic economic premise that helped build dulles has international gateway airports, going to be dramatically undermined. if the deal that was made long before i serve is basically renamed on a going forward basis, i hope the position, the combined carrier particularly if it was not forced to divests these slots because of advocacy made for continuing smaller markets that we won't have that. >> thank you very much. as remover to whatever that may be, we would be happy to work with you to figure out ways if possible to allow more flights outside the perimeter without reducing service to small

communities and without increasing flights to d.c. and we would be happy to talk about what we might do and maybe there is no solution. those are our objectives. not the cdc, not to see service from small communities decrease but to have the ability if possible to serve more cities. >> i just have to say very strongly, you have a strong anti force against us if a major calculus of this is not also the defect of changes on the economic viability of hundreds of millions of dollars, the federal government and the commonwealth of virginia made in the viability of dollars. >> senator warner, your question is >> reporter: in that if this merger goes through dulles airport will take another hit.

i am only an elite fire on one airline which happens to be mr. parker's if because i like flying and fly out of dollars into europe. for that will be eliminated. that whole connection, all u.s. air's connecting flights to europe are no longer go to go through dulles. >> the to philadelphia, new york, charlotte or miami. that is where we will find more things happening. that leads me to another point, where new destinations, claims by uniting with american are only replacing older destinations which already have an affiliation cochaired with united. what they are giving with one hand they are taking away with the other so from a consumer point of view we end up with no

net new routes it won't hell dulles one bit if it goes through. >> i want to continue because your analysis of u.s. airways/american overlap on 12 nonstop routes and several of the cities there are no other nonstop competitors. so department of justice will have to look at these competitive overlaps to understand this horizontal merger guidelines. you referring your study, 661 routes between domestic airports overlap between u.s. and american and 40% of routes face daily competition from u.s. air waves and 30% from u.s. airways and american. can you explain your study? you are saying there is a better

way to look at this issue on potential merger impact, market by market. i want you to comment on that as well. >> the way we need to look at it is a whole concept of a hub airline or subsystem is a system, is a system that connects. you fly into the home, fly out of a home. that is the creation of it. if you look at a merger only looking at the number of non flop -- nonstop direct straight flights and only 12 of them that is not a good way to look at it. you have to look at how connecting flights are competing and that is what works. if you are flying from seattle to austin, texas you go seattle to dallas to lost a north phoenix to loss in. if you go to kayak and look up expedia, you will get a price.

those airlines compete like mad with each other. that competition will disappear. you take all the u.s. air and overlaid them with american airlines' market, 761, 1-stop flights which overlapped. at that time, the g a o had a similar study that was released today, a more dramatic overlap, coming up with 1,600 something. and the two stop connection and that is how they end up with more. the way we look at, they will compete with each other and from destination to destination, not hub to hub, not nonstop routes. and our study will come up with 40% of current american airline routes covered by u.s. air

routes and 30% of the current american airlines or u.s. air routes are covered by american airline routes and u.s. air as a bigger domestic market. that is the best way to look at it and that shows competition in the market and not necessarily looking at the nonstop routes. is that clear? >> what do you think of this approach that the consumer travel alliance did? >> we can't actually analyze how he did his work or how the consumer travel alliance did their work but to be clear what the gao did say, we said there were 1600 overlapping routes but we also said there was a competitor--another competitor on those routes as well. i think the other point we would make is as our understanding,

doj and the faa look through the merger, they will have a comprehensive analysis more along the lines of not just nonstop but where there are overlapping routes. as we said before, a lot is yet to be determined but clearly those kinds of issues will be addressed we believe through doj. >> another question, mr. leocha, about ticket price transparency. nothing a consumer cares about more than the ticket price and over the last few years the fees and ancillary charges of grown dramatically from $1.7 billion in 2002 to $9.1 billion in 2012. shouldn't these ancillary fees be a little more in locks that? what do you think doj should

look at as far as the merger? >> i would like doj to look at part of the merger that does not fall into their jurisdiction. i talked with the department of transportation, department of transportation as the rulemaking's omb right now and what we have been trying to do and spend more time doing this and looking at stocks, we are trying to to get the airlines to disclose their ancillary fees at the time we buy our airline tickets. right now if we buy airline tickets from a travel agency, that will be from expedia or a corporate travel agency. we don't know how much the baggage will cost, we don't know how much seat reservations costs and there are a lot of other fees that go in. i am concerned with baggage fees and seat reservation fees so that consumers can compare prices and especially if we end

up with a merger coming through which is bringing competition out of the system there has to be away consumers can have an ability to comparison shop for tickets with everything together and look at oranges and oranges. that is what we have been trying to do. we are getting close to it but it is a long process to bring this thing to fruition and that is what consumers need. otherwise we have no way to compare the prices. >> miss kurland, is that under your jurisdiction? >> it is dot. >> okay. this is great interest to lots of people, long time in coming. i think we have had an airing of the issues here. we have raised some important questions. we will keep the record open for two week for the rest of our colleagues to answer questions and give you respond to them, this is a very important issue and i hope the appropriations

these take notice and try to address them before this move forward but thank you all very much for being here. we are adjourned. >> thank you. ..