U.S. Launches Air Travel Competition Inquiry amid Industry Pushback

The Biden administration announced a public inquiry into competition within the air travel industry, scrutinizing airline mergers, joint ventures, and pricing practices. The inquiry, led by the Justice Department’s antitrust division and the Transportation Department, aims to assess the impact of consolidation on fares and fees.

In recent years, the administration has blocked three airline mergers, with President Biden vocally opposing “junk fees” charged by airlines. The announcement comes just three months before Biden’s term ends, leading some, including Airlines for America, to question the timing. The trade group suggested political motives, as the review was announced shortly before a national election.

The U.S. airline industry is highly concentrated, dominated by United, Delta, American, and Southwest. These carriers are products of previous mergers that significantly reduced the number of major U.S. airlines. While critics argue this limits competition, the industry cites Transportation Department data showing long-term declines in average airfares.

Despite reduced ticket prices, fees for baggage, premium seats, and other services have increased. In the second quarter of this year, the average ticket price was $382, down from $404 last year. However, the industry contends that customer satisfaction is at a record high and air travel demand continues to grow.

The inquiry will also examine the transparency of airline pricing and sales practices, along with frequent-flyer programs. The departments are accepting public comments until December 23, inviting input from consumers, airlines, and other stakeholders.