WASHINGTON--The U.S. Justice Department's Antitrust Division and the Transportation Department said on Thursday they are launching a broad public inquiry into the state of competition in air travel.
U.S. President Joe Biden has made boosting airline competition a top priority and his administration has taken an aggressive approach to blocking consolidation efforts in the airline industry. USDOT last month opened a probe into the frequent flyer loyalty programmes of major airlines and pressed them to adopt new customer service protections. The Justice Department successfully sued to block JetBlue Airways' planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines and also went to court to force JetBlue to end its U.S. northeast partnership with American Airlines. The Transportation Department also insisted on significant concessions before it allowed Alaska Airlines to complete its acquisition of Hawaiian Airlines. Airlines for America, a group representing major U.S. airlines, said the timing of the inquiry 12 days before the November election "suggests political motivations."
The group said there is "robust competition among carriers and U.S. air travel is at an all-time high and airfares in real terms are at historic lows. The departments are seeking public comments by Dec. 23 on "consolidation, anticompetitive conduct and a wide range of issues affecting the availability and affordability of air travel options." They sought details on previous airline mergers, exclusionary conduct, airport access, aircraft manufacturing, airline ticket sales, pricing and rewards practices and the experiences of aviation workers. For decades, antitrust regulators approved a series of mergers that have resulted in four U.S. airlines - American, Delta Air Lines, United Airlines and Southwest Airlines - controlling about 80% of the domestic passenger market.
"Good service and fair prices depend on ensuring that there is real competition, which is especially challenging for the many American communities that have lost service amid airline consolidation," said Transportation Secretary Pete Buttigieg. The Wall Street Journal reported this week Frontier Airlines is exploring a renewed bid for Spirit Airlines. If Spirit and Frontier reach a deal, it would likely happen as part of Spirit restructuring its debt and other liabilities in bankruptcy, the newspaper said.
