When Northwest and Delta merged, and when United and Continental merged, there were real worries about the viability of the airlines as standalone entities. The years after 9/11, and then the Great Recession, were tough on airlines with economic malaise and high fuel prices. When US Airways and American merged, the latter was in banruptcy (and US Airways itself had been in bankruptcy twice in the previous decade).
Delta Boeing 777 Interior
The Department of Justice ultimately opposed a merger between United and US Airways in 2000. Perhaps that opposition could have been overcome but United tired of the idea. The DOJ did initially oppose the US Airways tie up with American, though it wasn’t clear they had the legal footing to ultimately prevail (the kind of delay DOJ can impose on a merger through litigation, though, can often be enough to undo it — regardless of the ultimate legal disposition of the case).
Mergers are often blamed for all manner of ills in the industry, the idea that:
- There are fewer major airlines than there used to be
- And a belief that if there was more competition consumers would get a better experience
Fees are up and annoying, but prices are down after a very brief upward bump. Saturday stays are rarely required to get the best fares anymore, and there’s pretty much no such thing as a $2000 roundtrip ticket in economy between the coasts.
Air travel isn’t demonstrably worse than it was 10 years ago or 20 years ago. We have inflight wifi, and more entertainment options, as well as more technologically advanced aircraft. The major airline standard of 31 inch pitch in coach was already in place then.
Frequent flyer programs are less generous, but with planes full airlines spend less on marketing to fill incremental seats since there aren’t many incremental seats. Concentration probably also plays a role here, at least with programs’ ability to attract big money from banks for credit card deals.
We do still have 4 major players in the domestic market — American, Delta, United, and Southwest — and Alaska Airlines is bulking up by buying Virgin America. Airlines like Spirit, Frontier, and Allegiant drive pricing for the majors in many of the markets in which they fly. That’s more competitors than in many industries whose competition we don’t wring our hands over.
Whether or not it’s fair, complaints about lack of competition and a wish that airline mergers hadn’t been approved is one of the most prevalent refrains from frequent flyers. However complaining about mergers that have already completed is shutting the barn door after the horses have left.
Whether or not we have “enough” competition, more competition would be desirable. Indeed, if the airlines weren’t so successful using government to protect themselves from competition, we’d have more of it.
The major US airlines have a strangehold on the House Transportation Committee. Congressman Shuster (R-Conquistadores del Cielo) seems to want to give the airlines whatever they wish. Consumer choices, convenience, and competition-lowering fares don’t appear to factor.
And they’ve got regulatory capture at DOT (which improperly ignores consumer complaints) as it is — which matters since the Supreme Court has nearly eliminated the ability to sue so your only avenue of redress is the DOT.
Delta, United, and American want to limit flights and low fares from major Gulf airlines.
Emirates A380 First Class Shower
And experienced airline competitors from around the world aren’t permitted to fly passengers between US cities, competing against the big incumbent airlines.
The easiest way to get more competition is to eliminate laws that forbid airlines from competing, like restrictions on foreign ownership of US airlines. Let Ryanair and Singapore Airlines operate in the US domestic market and compete against United and Delta.
Singapore Airlines Boeing 777-300ER
It’s an idea that’s taking shape elsewhere in the world. India is lifting limits on foreign ownership of airlines. Brazil passed legislation to allow this as well but it’s stalled with the executive planning to veto legislation that would have done the same. But the discussion is serious enough that proponents are getting close there.
Quit protecting the airlines from competition. Not only are there fewer airlines they keep asking for more government privilege, shutting out the Gulf carriers or forbiding from offering low prices.
Free the planes!