In the February 12, 2022 Travel Weekly article “Will a Frontier-Spirit merger get the DOJ’s blessing?” AAI President Diana Moss called on the U.S. Department of Justice Antitrust Division to take a “hard look” at the proposed airline merger.
From the article:
But gaining merger approval from the Biden administration could potentially prove more challenging. Last summer, Biden signed a sweeping executive order designed to promote competition in the American economy. Then, in September, the DOJ sued American and JetBlue in an effort to break up their new alliance in Boston and the New York area, arguing that it will cause hundreds of millions of dollars in harm to consumers. That case is pending.
Some advocacy groups have already signaled that they’ll fight the proposed merger.
“It should get a hard look by the DOJ,” said Diana Moss, president of the American Antitrust Institute. “Frontier and Spirit, as ultralow-cost carriers, inject important competitive discipline into domestic passenger markets. Without that dynamic, the Big Four will be even less restrained in coordinating to set fares, ancillary fees and quality of service.”
Moss cited Las Vegas and Orlando as markets where competition would be highly impacted by a merger.
“Southwest and the new merged airline would have between 50% to 60% of those markets. That is a duopoly, or the worst form of oligopoly, where players have strong incentives to collude rather than compete,” she said.