U.S. Ups Pressure on Airline Industry With New Inquiry 2 Weeks Before Election

The Department of Justice announced Thursday that it would launch a “broad public inquiry” into the state of competition in air travel — the government’s second inquiry into the airline industry in just the past two months.

The agency said it was seeking public information on consolidation, anticompetitive conduct and issues affecting the availability and affordability or air travel options. 

The DOJ also issued a lengthy questionnaire that touches on everything from loyalty programs to the labor market. 

“With this inquiry, we hope to learn more from the businesses and travelers at the center of this essential industry,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Their feedback will ensure the Justice Department can continue to build on its historic efforts to protect competition in air travel.”

The DOJ said the public has 60 days to submit comments on the inquiry. 

Last month, the Department of Transportation announced it would launch an inquiry into the loyalty programs of the four largest airlines, examining if these programs have engaged in unfair, deceptive or noncompetitive practices. 

Airline and Travel Industries Find Inquiry to Have ‘Political Motivations’

The airline and travel industries were critical of the DOJ’s announcement since it came less than two weeks before the U.S. presidential election. 

Airlines for America, a trade group that represents most major U.S. airlines, said the inquiry suggested “broad political motivations.”

“The U.S. airline industry has never been more competitive, and this administration’s regulatory overreach has disproportionately hurt ULCCs and disadvantaged those who can least afford air travel,” A4A said in a statement. “We look forward to sharing with the government their own data that shows just how competitive the industry is.” 

The U.S. Travel Association also said it believed political motivations were involved in the inquiry. 

“Today’s announcement by the Departments of Transportation and Justice that they will launch ‘broad inquiries’ into airline business practices is another in a long line of disappointing political stunts,” the U.S. Travel Association said in a statement. 

A Top Priority for the Biden Administration

Regulating consumer practices in the airline industry has been a top priority for the Biden Administration, but it’s unclear what the outcome of the DOJ inquiry would be with just two weeks before Election Day. 

Over the past few decades, the U.S. airline industry has become heavily consolidated due to mergers such as American-U.S. Airways, Delta-Northwest, United-Continental and Southwest-AirTran. 

Now, American, Delta, United and Southwest dominate around 80% of the U.S. market. 

The Biden Administration has taken a more hawkish stance toward industry consolidation. It successfully sued to block the JetBlue-Spirit merger and to unwind the Northwest Alliance. While the DOT approved the Alaska-Hawaiian merger last month, it did so after securing a set of consumer protections from the two carriers. 

It has also cracked down on airlines with hefty fines for meltdowns and civil rights violations. The DOT fined Southwest $140 million over its 2022 holiday meltdown and American received a $55 million fine earlier this week over disability rules violations. 

Airlines Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance. 

Read the full methodology behind the Skift Travel 200.