Proposed Delta, Northwest merger under congressional scrutiny (1/2ページ)

Allowing the Delta-Northwest merger to go forward would create a stronger airline at a time when high jet fuel costs are ravaging the industry, the heads of the two airlines told lawmakers Thursday.

"We aren't coming here to ask you for financial support, we just want the ability to do what is in the best interest for our company," Delta CEO Richard Anderson told the House Judiciary Committee's AntiTrust Task Force in the first of two congressional hearings Thursday.

Northwest CEO Doug Steenland said the merger would create more than $1 billion in annual synergies, which would help offset losses stemming from fuel prices.

"We're not here saying it completely offsets (the high fuel costs)," Steenland told lawmakers at a separate hearing before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights. "Oil continues to be a major challenge to the industry, whether or not this merger happens. But if it does happen, we will be in a stronger position."

The companies reported a combined first quarter loss of $10.5 billion on Wednesday.

Rep. John Conyers, chairman of the House task force, cautioned the airline executives to go slowly, expressing concerns that the deal could prompt other airline mergers, reducing competition in the industry and harming consumers.

"I am concerned that if this merger is approved it will simply result in a cascade of other mergers. ... We might end up with a situation where we have three mega-carriers operating through hubs competing with a handful of low-cost carriers," said Conyers, D-Mich.

"If the merger is rejected however, we could end up with more carriers in bankruptcy, negating more union contracts with pension and healthcare benefits," he added.