A wide-ranging investigation into the state of U.S. air travel and competition by the Federal government may produce real answers to issues of mergers and more that have recently been decided more on theories than facts.
The Department of Transportation and the Antitrust Division of the Justice Department’s “broad public inquiry into the state of competition” may shed light on a number of recent government interventions in the industry, including blocking the proposed merger of JetBlue and Spirit Airlines.
Among focuses of the inquiry, for which the federal government is asking masses of information, are effects of past airline mergers, airport access and airlines’ practices on ticket pricing, as well as rewards programs.
Assistant Attorney General Jonathan Kanter’s announcement said “With this inquiry, we hope to learn more from the businesses and travelers at the center of this essential industry,” Transportation Secretary Buttegieg added “Our goal with this inquiry is to identify and remove barriers to competition so that more Americans can access the opportunities that come with good, affordable air service.”
The two agencies have been key in a number of recent decisions that have had significant effects on the very issues being studied. In the JetBlue/Spirit trial, for instance, they argued that a merger would lessen competition, while the airlines argued that their merger would make the merged airline a better competitor against the largest carriers, and that separately they were at financial risk.
Post ruling, JetBlue has been forced into deep cutbacks and Spirit is at the edge of bankruptcy; perhaps with better data a different decision might have been reached.
On the other hand, in allowing the recent take-over of Hawaiian Airlines by Alaska Airlines, DOT for the first time imposed a series of customer-friendly requirements on the airline.
