Flying Is a Mess Right Now, but Elizabeth Warren Is Wrong To Blame Airline Mergers
With high inflation and a rebound in demand following the pandemic, plane ticket prices have gone through the roof this summer. Air traffic controller shortages and airline staffing issues are also causing flight delays and cancellations. Some airlines have responded by canceling routes (which also angered customers), while others have contended with striking pilots.
Sen. Elizabeth Warren (D–Mass.) thinks she has a plan to fix all this dysfunction. It involves intervening in a sale between two major companies and wielding the Department of Transportation’s authority to make an end-run around court challenges.
JetBlue is considering buying Spirit Airlines, a deal worth $3.8 billion. But Warren thinks such a deal would not be “consistent with the public interest” and must be thwarted.
“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,” Warren writes in a letter to the DOT. She goes on to argue that
“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.’ Among the factors the Secretary of Transportation is required to consider when making this assessment is the effect of the transfer on ‘competition in the domestic airline industry.’ DOT, however, has historically interpreted its authorities under 49 U.S.C. §41102 as only authorizing it to block international route transfers. This reading of the statute is incorrect.”
Typically, the DOT defers to the Justice Department on issues concerning airline mergers and antitrust. “The Justice Department must go to court to prove that competition would be harmed by a merger,” explains Bloomberg‘s Leah Nylen. “The DOT, however, can just decide that the merger is not in the public interest, an authority it has had since the Federal Aviation Administration was created in 1958.”
Warren, possibly worried about the succ
Article from Reason.com