The Biden administration has announced a public inquiry into the state of competition in the air travel industry, focusing on the impact of mergers and joint ventures between airlines. The inquiry will be conducted by the Justice Department’s antitrust division and the Transportation Department. This move comes after the administration successfully blocked three airline deals in the past four years and President Biden’s criticism of airlines for charging excessive fees.
With United, Delta, American, and Southwest dominating the U.S. airline industry following a series of mergers, the industry claims that there is still significant competition. They point to data from the Transportation Department showing a general decline in average airfares over the years, although ancillary fees have increased for services such as baggage and premium seats. Despite this, the industry maintains that customer satisfaction with air travel remains high and continues to rise.
In the second quarter of 2024, the average airfare was $382, which is a decrease from previous years, including the pre-pandemic period. The government agencies conducting the inquiry also plan to explore the pricing and selling practices of airlines, as well as their frequent-flyer programs. They have invited public comments on these issues until December 23, 2024. The focus is on gathering information and opinions rather than launching a formal investigation that could result in legal action.
It is important to note that this inquiry was announced less than three months before President Biden leaves office, and with the upcoming election considered a toss-up, there is uncertainty over the future of this review. The trade group Airlines for America has raised concerns about the timing of the inquiry, suggesting political motivations behind the announcement. However, the administration is committed to assessing the state of competition in the air travel industry and addressing any issues that may impact consumers or the market.
Overall, the Biden administration’s public inquiry into competition in air travel aims to gather information on the industry’s landscape, including the effects of mergers and joint ventures on competition. Despite claims of significant competition from the airline industry and the decline in average airfares over the years, the government agencies will delve into pricing practices, ancillary fees, and frequent-flyer programs. The inquiry is not a formal investigation that could lead to legal action, but rather a fact-finding mission to better understand the state of the industry.
