DOJ and DOT Studying Issues Impacting Availability and Affordability

The US Department of Justice (DOJ) and Department of Transportation (DOT) recently opened a “broad public inquiry into the state of competition in air travel.” The agencies aim to evaluate a wide range of industry issues, including anticompetitive conduct, inaccessibility, and unusually high costs.

“Competition in air travel is a vehicle for better quality, better fares and better choices for Americans,” explained Assistant Attorney General Jonathan Kanter from the DOJ’s Antitrust Division. “With this inquiry, we hope to learn more from the businesses and travelers at the center of this essential industry. Their feedback will ensure the Justice Department can continue to build on its historic efforts to protect competition in air travel.”

The primary topics in the agencies’ joint Request for Information (RFI) are past airline mergers, exclusions, airport accessibility, major manufacturers, ticket prices and rewards, and worker experience levels. These factors all tie in to aviation’s general state of competition and how it impacts various parts of the industry.

The inquiry ‘coincidentally’ follows three major airline deals being blocked in the federal government, the most significant being the Spirit and Jetblue merger. The $3.8 billion deal was rejected in January after the DOJ determined that it would lower competition and drive airfare prices through the roof. This was a rare move, marking the first time in nearly two decades that the U.S. denied an airline merger on antitrust accusations.

Shortly after, the Alaska-Hawaiian Airline acquisition spent months under review before finally being cleared.

The timing of the analysis seems somewhat… convenient. Airlines for America published a statement on the matter, saying: “this ‘broad inquiry,’ which was announced 12 days before a national election, suggests political motivations.”

It is not an unknown fact that the US has four dominating airlines: United, Delta, American and Southwest. They are all products of mergers and acquisitions that eliminated the presence of other carriers. Still, airfares have been on a general decline and industry satisfaction is only rising.

FMI: www.justice.gov