Travel Groups to Congress: Study Airline Competition

By / Feb 3, 2016 (iStock Editorial/Thinkstock)

Groups in the airline industry say that it’s been too long since Congress took a look at the state of the industry, so the groups have called for the Chamber to research the issue for the first time in more than two decades.

Is the state of the airline industry where it should be these days? And how is all that industry consolidation affecting the sector?

These are among the questions that a number of travel industry trade groups want Congress to look into. This week the groups—including the Travel Technology Association (Travel Tech), the U.S. Travel Association (USTA), Airports Council International-North America (ACI-NA), and the American Society of Travel Agents (ASTA)—called for a fresh set of eyes on the airline industry, which hasn’t been studied by Congress since 1993.

Since then, of course, a lot has happened—major airlines such as Northwest, Continental, and US Airways have faded from view, thanks to mergers with former competitors. The internet helped lead to the rise of new options for picking flights and hotels, giving Travel Tech a reason for being. And airports such as Cincinnati and Memphis have lost their status as hubs for certain airlines—along with the economic benefits that status brought to their respective regions.

In a blog post, Travel Tech President Steve Shur argued that the public status of much of the infrastructure around airports makes it essential for Congress to do a deep dive into the issue.

“Airlines benefit tremendously from taxpayer-funded infrastructure,” Shur wrote. “Those same taxpayers deserve, at a minimum, some assurances from the federal government that all players in the air travel industry are truly competing for their business in an open and fair environment. The commission to examine the state of air competition would do that.”

In comments to USA Today, ACI-NA Vice President for Air Policy Matt Cornelius expressed concerns about declining service at those former hubs.

“We advocate for price and service competition — that’s good for the traveling public and it’s good for airports,” Cornelius told the newspaper. “We have seen after the mergers of the large legacy carriers a reduction in that competition.”

If Congress decides to investigate, they won’t be alone. Last year, the Justice Department raised questions about potential collusion within the airline industry.

A4A’s Privatization Push

The call for an investigation comes at a time when Airlines for America (A4A)—which isn’t among the groups calling on Congress to investigate—is pushing for the privatization of air-traffic control. The latest step came on Wednesday, when the House Transportation Committee unveiled a bill that would separate air-traffic control from the Federal Aviation Administration.

The plan is controversial and was a driving factor behind Delta Airlines’ decision to leave the trade group last year.

But A4A argues that privatization could help boost efficiency in the airline system.

“We want to see more air traffic controllers hired. We want to make the system even more safe,” A4A said in a statement last month. “And most importantly, we want to make flying better for the traveling public. Members of Congress should want the same thing.”

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