AAI’s Diana Moss Testifies at Senate Commerce Committee Hearing, Says Consolidation in the U.S. Passenger Air Transportation Harms Quality, Choice, and Connectivity for Consumers

On March 23, 2023, AAI President Diana Moss testified before the United States Senate Committee on Commerce, Science, & Transportation. The hearing: Enhancing Consumer Protections and Connectivity in Air Transportation “…examine[s] the need to strengthen consumer protections for the U.S. flying public, including bolstering Department of Transportation rules, enhancing accessibility for the disability community and exploring the intersection of competition and customer service. This hearing will also discuss the importance of air service connectivity for small and rural communities. The Committee will hear from witnesses about potential solutions to improve consumer protections and competition across the airline industry.”

Moss’s testimony touched on four major issues:

• A loss of competition in passenger air transportation markets affects airfares and ancillary fees and quality of service. As an important non-price metric of competition, the quality of products and services has only recently gained attention by antitrust enforcers. More attention should be paid to how consolidation in the U.S. passenger air transportation markets reduces competitive pressure to maintain and enhance quality of service.

• Airline mergers and joint ventures are unlikely to produce enhanced “connectivity” for travelers. U.S. air carriers have long justified proposed mergers and joint ventures on the basis of enhanced consumer benefits, or the ability of merged carriers to offer new or more frequent service on combined networks. But analysis shows these claims do not always materialize and, in fact, some mergers actually create inefficiency.

• Competition is essential for consumer choice and the stability and resiliency of the passenger air transportation system. Consolidation in U.S. passenger air transportation markets has reduced choice for consumers. This means fewer options for consumers who want to purchase service that meets their needs. An air transportation system that features fewer rivals is also less likely to withstand shocks such as pandemic and extreme weather and to recover quickly from them.

• Promoting competition and protecting consumers requires strong antitrust enforcement and coordinated regulatory oversight. Historically, there has been less coordination on airline competition matters such as mergers, joint ventures, and slot allocation between the U.S. Department of Justice (DOJ) and Department of Transportation (DOT). Coordination across these two prongs of government is essential for promoting competition and protecting consumers.

Read the full testimony here: Moss / Senate Commerce Committee Hearing – March 23

Watch the full committee hearing here: Senate Commerce, Science, & Transportation Hearing – March 23