WASHINGTON — The U.S. airline industry has undergone a dramatic transformation over the past two decades, marked by a wave of mergers that has reshaped the competitive landscape. As a result, consumers in many regions now face fewer options for air travel. With the Biden Administration having placed renewed emphasis on fostering competition across key sectors, the Progressive Policy Institute (PPI) is calling for a fresh approach to airline competition policy that prioritizes access, choice, and affordability for American families.
Today, PPI submitted comments to the U.S. Department of Justice (DOJ) and U.S. Department of Transportation (DOT) on the “state of competition” in the air transportation industry. The comments focus on critical markets for passenger air service where U.S. consumers and working families are directly affected by the consolidation of U.S. carriers and encourage the DOJ, DOT, and Congress to make airline competition a priority in evaluating competition in the air transportation supply chain.
The unprecedented wave of consolidation in the domestic airline industry between 2005 and 2015 has many implications. PPI’s comments highlight the reality of today’s market — a handful of major airlines that account for almost 70% of the national market and a small group of regional, ultra low-cost (ULCC), and smaller carriers.
PPI urges policymakers to frame competition policy that prioritizes the prospect of more, smaller, ULCC, and regional carriers, as access and choice are especially important for flyers who do not live near major airports or in cities without a choice of airports. PPI’s Vice President and Director of Competition Policy, Diana Moss, noted: “Access to a choice of convenient and competitively priced flights is critical for American consumers and working families.”
PPI’s comments also emphasize that competition policy that promotes access and choice should not stop at the U.S. border. Policymakers should also take a close look at how DOT’s liberally grants U.S. carriers antitrust immunity on some global alliance routes. The consumer costs of some agreements, in the form of lost competition, are not always outbalanced by benefits elsewhere in the alliance networks, including for flyers in the U.S.
PPI argues that the DOJ recently advanced a strong agenda to prevent airline consolidation that is harmful to consumers. The DOT has done the same on the consumer protection side, but has not made much progress on competition. Therefore, a DOT competition agenda moving forward, and better cooperation between the DOJ and DOT is needed.
Read the full comment response to the Request for Information issued by the U.S. Department of Justice and U.S. Department of Transportation here.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
