Warren Urges DOT to Use Full Authority to Scrutinize Potential JetBlue and Spirit Airlines Merger
“Airline industry competitiveness is in free fall, and consumers are feeling the consequences. Today, the four largest airlines—American, Southwest, Delta, and United—control 80% of the domestic market, more than at any point in the modern history of commercial aviation.”
“The proposed JetBlue-Spirit merger is just the latest threat to consumers in this long string of mergers.”
Washington, D.C.— United States Senator Elizabeth Warren (D-Mass.) sent a letter to Secretary of Transportation Pete Buttigieg, urging the Department of Transportation (DOT) to use its full statutory authority to address consolidation in the airline industry and expressing serious concerns about the proposed merger between JetBlue and Spirit Airlines. In the letter, Senator Warren points out that DOT has significant and historically underutilized authorities to protect competition in air travel and highlights how the JetBlue-Spirit deal is likely to reduce competition and harm the public interest.
“I write to ask the DOT to use its full statutory authority to address consolidation in the airline industry and to express my serious concerns about the proposed merger between JetBlue and Spirit Airlines announced in July. DOT has significant and historically underutilized authorities to protect competition in the domestic air travel market to ensure any route transfers are ‘consistent with the public interest,’ and I urge you to consider utilizing these authorities as you continue your commendable consumer-protection efforts,” wrote Senator Warren.
Airline industry competitiveness is in free fall, and consumers are feeling the consequences. Today, the four largest airlines—American, Southwest, Delta, and United—control 80% of the domestic market, more than at any point in the modern history of commercial aviation. This dominance has been achieved through a series of airline mega-mergers that have reduced service quality and increased fares, and has contributed to the increase in delays, cancellations, and involuntary rebookings that airline passengers experience today. Consumer complaints to DOT have increased more than 300 percent from pre-pandemic levels, and air fares have outpaced inflation.
Title 49 explicitly grants DOT the authority to block any transfer of a route-operating certificate if such a transfer would not be “consistent with the public interest.” Moreover, in determining whether a transfer is consistent with the public interest, DOT is required to consider whether any transfer “prevent(s)...anticompetitive practices” and “avoid(s) unreasonable industry concentration, excessive market domination, monopoly powers, and other conditions that would tend to allow at least one air carrier or foreign air carrier unreasonably to increase prices, reduce services, or exclude competition in air transportation.” By interpreting its authority more narrowly than the statute supports, DOT has, in the past, significantly hindered its ability to promote open competition in the airline industry.
Moving forward, the Senator urges DOT to use its full statutory authority to (i) issue rules with bright-line standards for when transfers harm the public interest or airline competition and (ii) disapprove any transfers that harm the public interest or airline competition, effectively blocking anticompetitive airline mergers. These actions would allow DOT to ensure that M&A activity in the airline industry is not stifling competition.
In July 2022, Senator Warren and Senator Padilla sent a letter to DOT, urging DOT to fully utilize its statutory authority to protect consumers in the airline industry and hold airlines accountable for delayed and canceled flights. In March 2022, Senator Warren led her colleagues in a letter to Jonathan Kanter, Assistant Attorney General for the Antitrust Division in the U.S. Department of Justice (DOJ), and DOT, expressing concerns about Frontier Airlines’ proposed acquisition of Spirit Airlines. Senator Warren has been urging the Biden administration to closely scrutinize potential anti-competitive mergers in diverse industries. In the past year, Senator Warren has sent letters about the proposed mergers of Sanderson-Wayne, WarnerMedia-Discovery, and Amazon-MGM.
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