Biden administration’s airline competition inquiry raises eyebrows as political motivations come into question.
At a Glance
- Biden administration launches public inquiry into airline competition, focusing on mergers and joint ventures
- Four major airlines dominate the U.S. market, raising concerns about lack of competition
- Critics argue the inquiry’s timing suggests political motivations
- Red states reportedly bearing the brunt of decreased competition and service reductions
- Industry claims customer satisfaction is high, but concerns persist about reduced flight options and increased fees
Biden Administration’s Airline Inquiry: Competition or Politics?
The Biden administration has launched a public inquiry into competition within the air travel industry, focusing on mergers and joint ventures between airlines. This move, spearheaded by the Justice Department’s antitrust division and the Transportation Department, comes as part of a broader effort to address what the administration perceives as issues in the airline sector. However, the timing and nature of this inquiry have raised questions about its true intentions.
The investigation comes on the heels of the administration blocking three airline deals in the past four years and President Biden’s vocal criticism of airlines for “junk fees.” This aggressive stance has not gone unnoticed by industry insiders, who question the motives behind the inquiry.
“Unfortunately, the timing of this ‘broad inquiry’, which was announced 12 days before a national election, suggests political motivations,” said trade group Airlines for America.
The inquiry’s proximity to a national election raises concerns that it may be more about scoring political points than addressing genuine competition issues.
The State of Airline Competition: A Closer Look
Four major airlines dominate the U.S. market: United, Delta, American, and Southwest. This concentration is a result of past mergers, which have significantly reduced the number of major players in the industry. While the administration argues this limits competition, the airline industry counters that there is sufficient competition, citing declining average airfares despite increased fees for additional services.
The industry points to an average ticket price of $382 in the second quarter of the year, down from previous years, as evidence of a competitive market. They also highlight strong air travel demand and claim that customer satisfaction is at an all-time high.
However, this rosy picture painted by the industry doesn’t tell the whole story. Many travelers, particularly those in red states, are experiencing a different reality.
Red States Bearing the Brunt: The Hidden Costs of Reduced Competition
While the Biden administration claims to be addressing competition issues, critics argue that their policies have actually failed to encourage competition, leading to negative impacts on consumers, especially in red states. The lack of competition has resulted in the loss of airline hubs and direct flights, particularly affecting conservative states.
Ohio, Missouri, and Tennessee are highlighted as states that have lost significant airline hubs, impacting local economies. Since 2019, 14 U.S. airports have lost all scheduled commercial air service, and major airlines have exited from 74 airports since April 2020. This reduction in service disproportionately affects smaller communities and rural areas, which are often found in red states.
Travelers in these areas are facing a decrease in nonstop flights and overall flight options, along with increased delays, cancellations, and fees. This reality stands in stark contrast to the industry’s claims of high customer satisfaction and competitive pricing.
The Path Forward: Accountability and True Competition
As the Biden administration’s inquiry moves forward, with public comments being accepted until December 23, it’s crucial to consider what true competition in the airline industry should look like. While the inquiry is not a criminal or civil investigation and may not necessarily lead to lawsuits or charges, it has the potential to shape future policy decisions.
Critics argue that common-sense regulatory actions could spur innovation and competition in the airline industry. The TEAM Act, proposed by Senators Mike Lee and Chuck Grassley, aimed to enforce antitrust measures but failed to pass. This highlights the need for bipartisan efforts to address competition issues effectively.
