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Lobbying in American-US Airways deal focuses on small cities

A U.S. Airways jet departs Washington's Reagan National Airport next to an American Airlines jet outside Washington, February 25, 2013. REUT
A U.S. Airways jet departs Washington's Reagan National Airport next to an American Airlines jet outside Washington, February 25, 2013. REUT

By Karen Jacobs

(Reuters) - US Airways Group and American Airlines , seeking approval for a merger that would create the world's largest airline, are warning lawmakers that a requirement to divest certain airport slots would lead to less service for small and medium-sized cities, sources close to the effort told Reuters.

The airlines may be required to shed slots Washington's Reagan National Airport to prevent market domination. There is concern that those slots could go to rivals, such as JetBlue Airways , which would likely use them for flights to major cities.

That could have the trickledown effect of leaving smaller markets such as Tallahassee, Florida; Augusta, Georgia; and Charleston, West Virginia, without a daily flight to the nation's capital.

A letter signed by at least 100 members of Congress is expected to be sent to the U.S. departments of Transportation and Justice next week, requesting that the merged carrier not be required to shed slots at Reagan National, according to two people familiar with the effort. The airport is used regularly by members of Congress to fly in and out of the nation's capital.

One of the people, who asked not to be named, said Representative Mike Michaud of Maine was planning to send the letter, signed by Republican and Democratic lawmakers, to the Transportation Department.

Representatives from Michaud's Washington, D.C., office did not return phone calls requesting comment on Friday.

"What we're trying to do is encourage as many people to join in that communication to DOT (Transportation Department) and DOJ (U.S. Justice Department) as possible," said Bob Coffman, government affairs chairman of Allied Pilots Association, which represents pilots at American Airlines.

FEROCIOUS LOBBYING

Antitrust experts have said the Justice Department, which must approve the merger, could ask for divestitures in US Airways' hubs at Reagan National and Charlotte, North Carolina, and American's hub in the Dallas-Fort Worth airport. Outside these areas, the carriers fly different routes for the most part.

Airport officials in cities such as Tallahassee, Florida; Augusta, Georgia; and Charleston, West Virginia, said on Friday that they had also written to Congress and the Department of Transportation requesting that the merged carrier be allowed to keep the current gate access it has at Reagan National.

Sunil Harman, director of aviation at Tallahassee Regional Airport in Florida, said there is currently one daily flight provided by US Airways on a 50-seat jet into Reagan National.

"Our concern is that if those slots get reduced, then US Air and American as they merge and evaluate the routes will have no option but to shift service to a larger city," Harman said.

Among other U.S. carriers, JetBlue has said publicly that the combined American-US Airways should have to shed Reagan National slots for competitive reasons. This week, Delta Air Lines told Reuters in an interview that it also saw potential opportunities to benefit should divestitures be required of the new American.

Smaller communities expressed concern that should the new American be forced to give up Reagan National slots, the access will go to carriers that won't provide flights to their airports.

"The reality is if someone like a JetBlue gets the slot, they're not going to service our airport," said Diane Johnston, director of marketing and business at Augusta (Georgia) Regional Airport. "They‘re going to service New York City or one of those really large cities that already have service to Washington."

(Reporting by Karen Jacobs in Atlanta, additional reporting by Diane Bartz in Washington; Editing by Lisa Shumaker)

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