In the wake of the news that the U.S. Department of Justice is investigating U.S. airlines for antitrust violations, the Business Travel Coalition (BTC) has released a statement urging 34 State Attorneys General to reengage with the problem of insufficient airline industry competition.
While the antitrust investigation is focusing on illegal coordination among industry competitors to restrict capacity in domestic U.S., transatlantic and other international markets for the purpose of maintaining and/or increasing upward pressure on ticket pricing, the BTC has argued that capacity coordination represents "the tip of the iceberg" in terms of reduced airline competition. The "Big Three" U.S. airlines -- Delta, United Airlines and American Airlines -- have also worked to reduce price transparency, undermine consumer protections and diminish competition, the BTC said.
“While the DOJ and Connecticut investigations are welcomed and timely, the worry over coordination on seat capacity is merely one of numerous examples of patterned behavior,” said BTC Founder Kevin Mitchell. “The reality is that it is exceeding unlikely that the consolidation of the domestic U.S. commercial aviation marketplace can be undone. As such, State Attorneys General should consider, as they did in the late 1990s, evaluating structural and other reforms that would return robust competition to the marketplace.”
The BTC cited three potential reforms:
- Review antitrust immunity
- Allow cabotage
- Restore the private right of action
The full letter can be downloaded at http://btcnews.co/1dA6NLl.