On Thursday the Department of Justice’s (DOJ) Antitrust Division and Department of Transportation (DOT) jointly announced a broad public inquiry into the state of competition in air travel. As part of the Request for Information RFI), the agencies are looking into consolidation, anticompetitive conduct and a wide range of issues affecting the availability and affordability of air travel options.
Key topics in the RFI, according to a joint statement by the departments, include:
- The state of competition in the aviation sector and its effects on passengers, workers and jobs, regions and local communities and economic growth.
- Airline consolidation and the effects of previous mergers, common ownership, joint ventures, international alliances, structural advantages, exclusionary conduct and other anticompetitive practices.
- Airport access and its impact on airlines and their ability to enter and fairly compete in different areas of the country and the world.
- Aircraft manufacturing and the impact of consolidation and anticompetitive practices on new aircraft manufacture and sale, aircraft leases or secondary markets for used aircraft.
- Air transportation sales channels, pricing and airline rewards programs and the impact on the availability, access and affordability of air travel.
- Labor market issues and the effects of consolidation and anticompetitive practices in other parts of the aviation industry on pilots, in-flight crews, ground crews, airport services, union contracts and/or travel agents or other vendors of travel services.
The American Society of Travel Advisors (ASTA) said it was “pleased” to learn about the FRI. “A number of developments such as the mergers and acquisitions approved by the DOJ in the decades following deregulation of the airlines in 1978 have contributed to an alarming decline in competition in the U.S. airline industry, resulting in both higher prices and fewer choices for consumers,” it said in a statement provided to Travel Agent.
It added: “Travel advisors sell 735,000 air tickets daily, and they have witnessed first-hand the effects of airline consolidation throughout the history of commercial aviation. Once agents of the airlines, advisors are now their consumers and assist travelers in choosing the best air travel options. This has led to increased prices, decreased choice and lower satisfaction among travel advisors’ clients.”
ASTA has formally brought these concerns to the attention of both the DOJ and DOT more than a year ago, and “as such we welcome the opportunity presented by the RFI to share our members’ views on this critically important issue.”
The U.S. Travel Association, on the other hand, seems a bit more skeptical about the public inquiry.
"Today's announcement by the Departments of Transportation and Justice that they will launch 'broad inquiries' into airline business practices is another in a long line of disappointing political stunts,” it said. “Airfares are at new lows and air travel demand is at historic highs. Yet air travel could be improved—by investing in technology, funding airport improvements and addressing the shortage of 3,000 air traffic controllers. Rather than solve these serious, complex and long-standing problems, the Biden administration is choosing to politicize the air travel process and, in so choosing, fail the American traveler.”
Note that the DOJ’s Antitrust Division has previously successfully blocked the proposed merger between JetBlue and Spirit Airlines and helped “unwind” the Northeast Alliance between JetBlue and American Airlines.
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