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Biden administration investigates US airline industry's competitive landscape

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Biden administration investigates US airline industry's competitive landscape
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Caroline Lascom Senior editor | The Points Guy

The Biden administration has initiated a comprehensive investigation into the current state of air travel competition in the United States. The U.S. Department of Justice's Antitrust Division and the U.S. Department of Transportation announced on Thursday that they are conducting a "broad public inquiry into the state of competition" within the airline industry.

This inquiry will examine various aspects, including past airline mergers, airport access, ticket pricing strategies, and rewards programs. Assistant Attorney General Jonathan Kanter stated, "With this inquiry, we hope to learn more from the businesses and travelers at the center of this essential industry." Transportation Secretary Pete Buttigieg added that their aim is "to identify and remove barriers to competition so that more Americans can access the opportunities that come with good, affordable air service."

A trade group representing major U.S. airlines criticized the timing of the inquiry as politically motivated due to its proximity to the presidential election. They argued that "the industry has never been more competitive," citing Department of Transportation data indicating historically low inflation-adjusted airfare prices. A spokesperson for Airlines for America expressed confidence in demonstrating this competitiveness using government data.

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The Biden administration has shown increased scrutiny over airline industry practices concerning competition and consumer protections. The DOJ previously blocked American Airlines' Northeast Alliance with JetBlue and opposed JetBlue's merger with Spirit Airlines. However, it approved Alaska Airlines' acquisition of Hawaiian Airlines while securing concessions related to consumer protections.

Under Secretary Buttigieg's leadership, the DOT has advocated for improved customer service guarantees by airlines in cases of flight delays and cancellations. Additionally, stricter passenger refund rules have recently been implemented as part of the Federal Aviation Administration Reauthorization Act.

Federal agencies and congressional leaders have also intensified their focus on frequent flyer programs in recent months.

As part of this latest inquiry into airline industry competition, there will be a 60-day public comment period ending on December 23rd. With a new presidential administration set to take office shortly after on January 20th, it remains uncertain how this investigation will proceed.

Before Alaska-Hawaiian merger approval earlier this year marked nearly ten years since any significant airline merger occurred in America; however prior decade witnessed numerous consolidations resulting four major carriers controlling almost eighty percent market share today.

Organizations Included in this History
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