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After the Justice Department said it would launch an inquiry into the state of airline competition, the airline and travel industries criticized the move as politically motivated. \n<\/p>\n
The Department of Justice announced Thursday that it would launch a \u201cbroad public inquiry\u201d into the state of competition in air travel \u2014 the government\u2019s second inquiry into the airline industry in just the past two months.<\/p>\n
The agency said it was seeking public information on consolidation, anticompetitive conduct and issues affecting the availability and affordability or air travel options.\u00a0<\/p>\n
The DOJ also issued a lengthy questionnaire that touches on everything from loyalty programs to the labor market.\u00a0<\/p>\n
\u201cWith this inquiry, we hope to learn more from the businesses and travelers at the center of this essential industry,\u201d said Assistant Attorney General Jonathan Kanter of the Justice Department\u2019s Antitrust Division. \u201cTheir feedback will ensure the Justice Department can continue to build on its historic efforts to protect competition in air travel.\u201d<\/p>\n
The DOJ said the public has 60 days to submit comments on the inquiry.\u00a0<\/p>\n
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.\u00a0<\/p>\n
The airline and travel industries were critical of the DOJ\u2019s announcement since it came less than two weeks before the U.S. presidential election.\u00a0<\/p>\n
Airlines for America, a trade group that represents most major U.S. airlines, said the inquiry suggested \u201cbroad political motivations.\u201d<\/p>\n
\u201cThe U.S. airline industry has never been more competitive, and this administration\u2019s regulatory overreach has disproportionately hurt ULCCs and disadvantaged those who can least afford air travel,\u201d A4A said in a statement. \u201cWe look forward to sharing with the government their own data that shows just how competitive the industry is.\u201d\u00a0<\/p>\n
The U.S. Travel Association also said it believed political motivations were involved in the inquiry.\u00a0<\/p>\n
\u201cToday\u2019s announcement by the Departments of Transportation and Justice that they will launch \u2018broad inquiries\u2019 into airline business practices is another in a long line of disappointing political stunts,\u201d the U.S. Travel Association said in a statement.\u00a0<\/p>\n
Regulating consumer practices in the airline industry has been a top priority for the Biden Administration, but it\u2019s unclear what the outcome of the DOJ inquiry would be with just two weeks before Election Day.\u00a0<\/p>\n
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.\u00a0<\/p>\n
Now, American, Delta, United and Southwest dominate around 80% of the U.S. market.\u00a0<\/p>\n
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.\u00a0<\/p>\n
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.\u00a0<\/p>\n
What am I looking at?<\/strong>\u00a0The performance of airline sector stocks within the\u00a0ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.<\/p>\n