United, US Air deal may put more heat on T2 Web site

Yesterday, United Air Lines Inc. CEO James Goodwin admitted that the main hurdle in front of his company's planned $11.6-billion purchase of US Airways Group Inc. would be earning the blessing of the U.S. Department of Justice (DOJ). And some analysts say the scrutiny given to the proposed airline merger will add more heat to the antitrust investigation that's already surrounding an online ticketing Web site owned by United and the country's other four largest airlines.

The Web site, dubbed T2 within the travel industry, last week learned it will be the subject of a June 22 hearing scheduled by the Senate Commerce Committee to explore possible antitrust implications (see story). Just two days later, the DOJ confirmed that it also has launched a probe into the online ticketing venture, which hopes to open for business this summer.

"This merger doesn't do T2 any favors," said Henry Harteveldt, an analyst at Forrester Research Inc. in Cambridge, Mass. "This is going to make a lot of people nervous about competition in (the airline) industry."

Harteveldt said further consolidation among airlines "should be a huge concern to consumers and the government." He added that United should be forced to give up its equity stake in the T2 site as a way to prevent the Chicago-based airline from getting too much of a controlling position in the industry.

But Fiona Swerdlow, an analyst at Jupiter Communications Inc. in New York, said she doubts United would let go of its T2 holdings without a fight. "The top airlines all want to be a part of this (Web site)," she said. "United won't want American and Delta to be in there (if it) can't be."

Swerdlow added that T2 should get a fair hearing on its own merits. "People may talk about (the merger and the T2 investigation) in the same breath, but they really are two separate issues," she said.

Goodwin acknowledged the inevitability of roasting in the government's oven during a press conference after the deal with U.S. Airways was announced yesterday.

"In my opinion, there are two major hurdles," he said. "The first is to get US Airways shareholders to approve this transaction. I don't think that is a major hurdle. The real work ahead of us is the regulatory work, which revolves around the Department of Transportation, the Department of Justice and the European Union. Our real challenge will be there."

T2 officials wouldn't comment on the United and US Air merger, or its possible effect on the online ticketing site.

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