The Progressive Policy Institute (PPI) submits these comments in response to the Request for Information (RFI) issued by the U.S. Department of Justice (DOJ) and U.S. Department of Transportation (DOT) on October 24, 2024, in docket number ATR 103. The RFI seeks information on the “state of competition” in the air transportation industry. PPI’s comments address specific questions in the RFI that relate to markets for passenger air service (“passenger service”). In these markets, U.S. consumers and working families are directly affected by strategic business practices and consolidation, such as mergers, acquisitions, and joint venture agreements. Changes in competitive dynamics affect airfares and ancillary fees (“fees”), quality and innovation in technology and service, business models, and the reliability and stability of the air transportation supply chain.
PPI’s comments stress that competition in passenger service markets should be a priority for reframing competition policy in air transportation. Comments on the RFI from other organizations will focus on other parts of the air transportation supply chain, such as aircraft manufacturing, distribution of fare and schedule information, and labor markets. We encourage the agencies to consider how competition concerns in other markets can potentially create market power “bottlenecks.” Shocks to these bottleneck markets can cause cascading failures that affect the entire air transportation supply chain, including passenger air service. Recent examples include the Boeing 737 Max safety incidents and their impact on aircraft supply shortages and the flying public.
PPI’s comments begin with an assessment of inter-agency coordination on airline consolidation. This section is responsive to Section 10 in the RFI. The comments then turn to consolidation in domestic markets and access by smaller ultra low-cost (ULCC) and regional carriers to essential inputs such as takeoff and landing slots and airport facilities such as gates. This section is responsive to Section 3 in the RFI. The final section addresses changes in passenger service markets that affect DOT’s grants of antitrust immunity (ATI) for joint-venture agreements in the three major international alliances. This section is responsive to Section 2 in the RFI.
