As we said in June when this rather strange thing called the “Wright Agreement” first became public — getting the said agreement signed, sealed, and delivered intact by Congress before the end of the year looked like a tall order to me.
Last week the House bill on the agreement was not even scheduled, and this week it’s still not scheduled. As a result, it increasingly looks like nothing is going to happen here until after Congress returns from its summer vacation.
Opposition has cropped up on the Senate side as well.
This afternoon, the Associated Press reported that the Justice Department had weighed in on the deal.
According to the AP, the Justice Department’s antitrust division told lawmakers in a letter that restrictions in the agreement to repeal the Wright Amendment would be “hard-core, per se violations of the Sherman Act.”
According to the AP,
“The Justice Department said the gates to be torn down could be used by other airlines to enter and compete there. Razing them “is the very kind of collusive output reduction that the antitrust laws are designed to prevent.”
Southwest is also limited to 16 gates in the deal, which the Justice Department said is a hard cap on Southwest service from Dallas for more than eight years and would not allow Southwest to expand its operations once the Wright Amendment is lifted without leaving cities it now serves or facing penalties for starting up service at another Dallas area airport.
The department said the parties to the local agreement are aware of the antitrust violations because they have sought blanket immunity for the agreement, instead of including an “antitrust savings clause,” which the agency said is commonly done to preserve competition under antitrust laws.”
However, stop the anti-trust press.
Just as this news was being digested Tuesday afternoon, officials with the Justice Department apparently told Sen. Kay Bailey Hutchison, R-Texas, that they had not taken a position on the legislation.
Hutchison released a letter late Tuesday in which William Moshella, the assistant attorney general for legislative affairs of the Justice Department told her, “It has come to my attention that some believe the (Justice) department opposes … the Wright Amendment bill. To the contrary, DOJ and the (Bush) Administration have not taken a position on the bill. In fact, we see laudatory elements in the bill including the phaseout of the Wright Amendment restrictions. We share your concern about fixing this several decades old issue and of course want to foster the maximum amount of competition in the airline industry which will be a benefit to consumers.”
According to the Ft. Worth Star-Telegram Tuesday night, the Justice Department did not, however, specifically disavow the earlier “unsigned” Justice Department memo.
I’ve forgotten what round we’re on in this one. I think we may be approaching the triple digits.