CEO DATELINE - Travel groups want Congress to study airline competition
CEO DATELINE - Travel groups want Congress to study airline competition
- February 2, 2016 |
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Walt Williams
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A coalition of travel industry associations is urging federal lawmakers to create a national commission to study competition among airlines, fearing that a wave of mergers is hurting consumers, USA Today reported.
Just 12 years ago, ten companies provided the bulk of passenger air travel in the U.S. Now there are only four major airlines—American, Delta, Southwest and United—that control about 80 percent of the domestic market.
The coalition wants Congress to form a commission to study the effects of industry consolidation as well as industry agreements with both foreign governments and foreign airlines that could give them a competitive edge in certain markets.
"All of these topics we believe are worth exploring to better understand the competitive landscape of air travel in the U.S.," Steve Shur, president of the Travel Technology Association, told the newspaper.
A similar commission was set up in 1993 to study the effects of deregulation on the airline industry. It concluded the increased competition that initially came with deregulation resulted in lower costs for travelers—at least at first—but airlines did not net a substantial return on investment and lost skilled workers.
"We advocate for price and service competition—that's good for the traveling public and it's good for airports," Matt Cornelius, vice president for air policy at Airports Council International-North America, told USA Today. "We have seen, after the mergers of the large legacy carriers, a reduction in that competition."
Other members of the coalition include the U.S. Travel Association and American Society of Travel Agents.
The U.S. Justice Department announced last year that it was investigating possible collusion among the major air carriers to keep air fares high. The industry's main trade group, Airlines for America, has denied the allegations. http://usat.ly/1nAGFFu
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