In 2024, the airline industry saw a boom in premium services as well as significant regulatory changes in Washington under the Biden administration. These changes included a federal judge striking down a merger between JetBlue and Spirit Airlines, Spirit Airlines filing for bankruptcy, and the approval of the Alaska-Hawaiian merger with consumer protections. Senators held hearings with airline executives expressing concern over lack of transparency on pricing “junk fees,” which won praise from consumers but drew criticism from airline executives.
One of the controversial regulations introduced by the Biden administration was related to junk fees and automatic refunds. Airlines were required to issue automatic refunds for significantly delayed or canceled flights if customers declined a rebooked flight. While this rule garnered bipartisan support and became law, the industry had a tepid reception. Major airlines criticized the rule, leading to a lawsuit that ultimately ruled in their favor, with the Fifth Circuit Court of Appeal siding with the airlines. Senators also expressed frustration with airline executives during a hearing on junk fees in December.
The DOT opened an investigation into airline loyalty programs and credit card rewards programs in 2024, examining whether the devaluing of points negatively impacted consumers. The Consumer Financial Protection Bureau found that airlines and credit card companies could devalue points unfairly or deceptively. This investigation could result in enforcement actions against airline rewards programs and credit card issuers, impacting the industry’s profitability.
While the Biden administration took a strict stance on airline mergers, a potential Trump administration might be more open to such activities. Analysts anticipate more merger activity under Trump, with speculation that airlines like Spirit could merge with others post-bankruptcy. Some airlines hinted at reviving alliances that were struck down under the Biden administration, showing anticipation for more merger opportunities in the future.
Elon Musk’s rising influence and potential role in Trump’s administration could have far-reaching implications for the airline industry. Musk’s advocacy for slashing consumer protections and loosening FAA regulations on space launches could impact the airline industry. With Musk’s political power and influence, his involvement in government could lead to significant changes in regulations affecting airlines, space launches, and government efficiency.
The airline industry in 2024 faced significant changes and challenges with new regulations, investigations into loyalty programs, potential mergers, and the rise of influential figures like Elon Musk. The regulatory landscape under the Biden administration included initiatives targeting junk fees and automatic refunds, drawing both praise and criticism from consumers and industry executives. The industry could see further shifts in regulations, mergers, and consumer protections under a potential Trump administration, highlighting the ongoing evolution and impact of government policies on the airline industry.
