Maintaining competition in the airline industry is crucial to ensure resiliency and the best outcomes for consumers and airline employees. As the U.S. Department of Justice is considering legal action to block the merger between Spirit Airlines and JetBlue, AAI President Diana Moss expressed concerns over the potential negative impacts of the merger on competition, consumers, and airline workforces in interview on NPR’s Morning Edition. Moss notes that the loss of a competitor on important routes could lead to higher fares and lower quality for consumers, make it harder to work through unforeseen circumstances, like disastrous weather and COVID, and highlights the potential for reduced bargaining power for airline employees. Moss cautioned that a settlement would not restore competition and urged the DOJ to move to block the merger.
Highlights from the interview:
On the negative effects of mergers
Mergers can affect labor by reducing bargaining power of pilots and other airline workforces, and it’s one less competitor in our passenger aviation system. So losing an important competitor can really contribute to having sort of a fragile system that isn’t very resilient to withstand shocks, like what we saw with weather at the end of 2022 and even COVID.
What happens with these types of joint ventures is, the more expensive workforces are displaced with the lower, the less expensive workforces. But that in itself is not necessarily a bad thing. But when it results from a joint venture, for example, eliminating competition, that’s when we start to worry.
On airline competition
We’re really looking at how on important routes from origins to destinations, how the merger will affect competition, and it really does eliminate an important competitor. And when you have that in markets where there isn’t a lot of competition anyway, as a result of many, many years of consolidation, then that really does start raising questions about higher fares and lower quality for consumers. We maintain important resiliency in our air system by having more competition instead of less.
On how the DOJ could respond
The Biden administration is committed to promoting competition and slowing down the kind of consolidation that we’ve seen in the U.S. economy for many years. And the only way to do that really is for the DOJ to evaluate the merger, to file a lawsuit on the grounds that it’s illegal and it would really substantially reduce competition.
Depending on how the airlines want to respond to that, there could be a settlement. We do not favor a settlement because we don’t think that would really restore competition or they could end up in federal court litigating this case in front of a judge. I think that is probably the best way to ensure that consumers are not harmed by this merger and that workers, various labor forces are not harmed, and that we maintain important resiliency in our air system by having more competition instead of less.
