The airlines are bombarding the Department of Transportation (DOT) for approval of their new airline alliances. Just before the changeover of the administration, there was a rush to get their new cartels rubber-stamped. That attempt failed. But the airlines are back at it again.
This time the DOT should not feel such change-of-administration pressure and they should carefully coordinate with the Department of Justice (DOJ) regarding the antitrust implications.
Politicians who have not fully explored the ramifications of many of the new powers being requested by these airline alliances on steroids have urged quick approval. A group of Texas legislators is applying pressure to approve antitrust immunity for Continental and United.
However, both the DOT and DOJ should make sure that new alliance antitrust immunity requests are carefully screened. Another powerful bipartisan group of Senators have come down firmly on the side of prudence.
The old airline alliances that we have grown accustomed to are relatively benign. They allow coordination of schedules and routes. The new airline cartels will allow groups of airlines to bargain with suppliers, travel agents and passengers as one behemoth.
If all of the current airline alliances were approved and allowed to add collective bargaining to their arsenal, the results would be anti-consumer.
I’ve been told that the three top airline alliances control 70 percent of the worldwide air traffic. This kind of concentrated economic power will help the airlines out of their economic malaise, however it would drive other industries into economic distress and hurt anyone who needs to bargain with the airline alliances.
Let’s be careful and look carefully at what powers the airlines are requesting for their alliances. Let’s open up the process so the American people and the press can see what is happening and make an in informed assessment.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
