CongressForConsumers.travel

CongressForConsumers.travel


Welcome!

The United States Senate Commerce Committee is moving ahead with a bill to reauthorize the Federal Aviation Administration (FAA) this spring. Several Senate Members will be filing pro-consumer amendments in response to a domestic U.S. airline industry that has become monopolized as a result of mergers and that is failing consumers. Please find information and links on this page that will help illuminate this issue as the process moves along between the Senate and the House in coming months.


BACKGROUND

In the past ten years the U.S. has gone from ten airlines controlling some eighty percent of domestic seat capacity to just four airlines today. This radical consolidation of the industry has benefited airlines tremendously enabling record-level, sustainable profits. A financially viable air transportation system is important to the social and economic goals of the country. However, competitive concentration has led to airline policies, practices and behaviors that are increasingly undermining the interests of consumers and communities and should be of considerable concern to regulators and numerous industry stakeholders.


PROBLEMS IN COMMERCIAL AIR TRANSPORTATION

PROBLEM 1

Airlines have been undermining consumer protections with the effects of (a) consumers not having access to complete, accurate, transparent and comparative ancillary fee, airfare and scheduling information; (b) airlines fighting every pro-consumer rulemaking at the U.S. DOT, and then in federal courts; and (c) airlines undermining both their regulator and consumer interests by requesting of the U.S. House T&I Committee to endorse the highly anti-consumer Curbelo amendment to the U.S, House FAA bill. 

The cause is radical airline industry consolidation and tacit coordination of policies and practices among some airlines.

PROBLEM 2

Mid-size communities have lost air service with the effects of (a) thousands of monopolized city-pair routes; (b) lost connectivity to important U.S. and international business and leisure destinations; (c) higher airfares; and (d) diminished economic activity including reduced job growth.

The causes include radical airline industry consolidation and metal-neutral international joint ventures that incentivize flying only the most valuable, highest yielding traffic over U.S. mega-hubs.

PROBLEM 3

Foreign carrier new entry is being frustrated on a grand scale with the effects of (a) foreign carrier applications to serve the U.S. under Open Skies agreements stalled as evidenced by a two-year delay in approving Norwegian Air International’s application to serve the U.S.; (b) job losses and economic harm to low-fare airlines such as JetBlue that code-share with foreign carriers; (c) lost new-competition opportunities on domestic routes where foreign code-share partners could provide passenger feed for U.S. airlines to mount new service (e.g., JetBlue Boston/Detroit service enabled by Emirates); (d) damage to the reputation of the U.S. and a chilling effect on foreign carrier interest in serving the U.S. as the scorched-earth campaign against the Gulf carriers is watched in disbelief; (e) retaliatory risk for U.S. cargo carriers and their employees; (f) lost new air service opportunities in cities across the country; and (g) pricing above competitive levels for consumers and small businesses.

The cause is major U.S. network airlines’ pursuit, through political pressure on the Obama Administration, of commercial protectionism to freeze their market positions now that they have achieved domestic consolidation and antitrust immunized global alliances and joint ventures.

PROBLEM 4

The U.S. does not have a coherent national air transportation policy with the effects of (a) ill-advised legislative proposals; (b) contradictory regulatory positions and initiatives; and (c) unclear Congressional direction regarding the policy priorities of the U.S. air transportation system.

The causes are airlines wanting to drive their selective and self-interested vision of U.S. aviation priorities and general apathy of many lawmakers toward developing pro-consumer aviation policies.


REMEDIES

In reauthorizing FAA, the U.S. Congress ought to consider the following amendments as structural remedies to a failing domestic airline industry and associated problems listed above:

1 - urge the Obama Administration to reject the major carriers' protectionist demands;

2 - develop policy that strongly supports domestic and foreign carrier new entry;

3 - formulate policy that permits foreign carriers to carry passengers between U.S. cities;

4 - require regular open-docket reviews of grants of antitrust immunity;

5 - restore a private right of action;

6 - establish a new national commission to examine the state of competition.

NOTE: Remedies are discussed in detail in the section that follows.


ANALYSES & STATEMENTS


. . .







©2001 to 2018 Business Travel Coalition, Inc..