[Bill Hemmer, Cnn Anchor:] The world's largest air carrier apparently piloting a new course. United Airlines has agreed to buy US Airways in a deal well over $11 billion. If approved by both United employees and government regulators, the new monster would rule from coast to coast. The prospect of a potential monopoly, though, raising some eyebrows, but could it also help raise airfares?
[Hemmer:] There may be reason for concern among air travelers and it won't go unnoticed by government regulators. The new airline would be a giant, dominant at airports from coast to coast. Right now. United Airlines flies mostly eastwest routes. Its major hubs are located in the Midwest and the West: Chicago, Denver, Los Angelessouth routes with hubs in Charlotte, Pittsburgh and Philadelphia. The purchase would give United a bigger presence along the East Coast, and that's what may raise concerns. Here's why: The new combined airline could potentially suffocate competition in the hub cities now served by US Airways, pushing smaller, low-cost airlines out of business. That would leave the merged airline free to set higher prices. But United is promoting the potential benefits. The airline will reportedly promise to freeze fares for at least two years time. The buy out would potentially give the airline more resources to help improve customer service at a time when traveler complaints are taking off. United also is expected to continue to employ US Airways workers. All employees below management level will reportedly be guaranteed work.
[Michael Miller, "aviation Daily":] The hurdles are so many I don't think they could even count them right now. They face hurdles not only with the Justice Department and Washington Department of Transportation, but as well as with unions all over the place. Unions have had a habit of disrupting any deals that the management of airlines have wanted to make for the past decades.
[Hemmer:] Good or bad, the deal won't be the last. Analysts predict competitors will now scramble for partners. So where does all this leave the traveler? Well, up in the air for now. Back on the ground now. For a closer look from ground zero, and the passengers' point of view, CNN Chicago bureau chief Jeff Flock at O'Hare Airport, the main hub for United. Jeff, what's reaction thus far today?
[Jeff Flock, Cnn Chicago Bureau Chief:] A couple of different buzzes this morning from the passengers out here this morning. Perhaps you can see them lining up this morning for flights already. One of the buzzes from the passengers is they are pretty happy about the prospect of combining their frequent flyer miles, their United frequent-flyer miles with the USAir miles. So that could be a good thing. But of course, they also worry about the prospect of a very large airline having a lot of power. Already, United, of course, is the biggest carrier here in Chicago. This is their home, and Elk Grove Village is their headquarters, just not far from the airport where we stand here this morning. And given the fact that this airline is 55 percent employee owned, of course, it will have to have the approval of a good significant portion of the folks that work for this airline. One other UAL employee this morning pointed out that the US Airways chairman, Steve Wolf, is well-known to the folks at United. He headed United when the employees essentially took the airline over and forced him out. They say that he doesn't have a whole lot of friends here at United. And of course, the United employees will be the ones essentially approving this deal, and although it is unclear, they point out, whether Mr. Wolf will have a significant role with the new company. So, as you point out yourself, a lot of hurdles to be crossed, not the least of which those unions and labor, but of course one final note is that United has on its board three representatives of labor, and it was that board that has approved this takeover. We'll, of course, continue to watch it. I'm Jeff Flock, CNN, reporting live from O'Hare in Chicago
[Hemmer:] All right, Jeff, thank you.