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Published on : Tuesday, March 15, 2016
The Business Travel Coalition (BTC) today applauded the U.S. Senate Commerce Committee for its leadership on behalf of airline industry consumers as it moves to markup its Federal Aviation Administration (FAA) bill this Wednesday. As sure as the sun rises in the east, come Wednesday, airlines in their characteristic Orwellian custom will label pro-consumer amendments to the FAA bill anti-consumer.
Indeed, Air Transport World on March 10, 2016 quoted the airlines’ trade association as saying: “Regulations proposed in the Senate bill under the cloak of consumer protection have the potential to drive up the cost of air travel for consumers and potentially harm service to small- and medium-sized communities.”
Well, it is hypocrisy in the extreme to signify concern about service to mid-size communities now that the major U.S. airlines have secured antitrust immunity for their global alliances and joint ventures, locked up the North Atlantic market and radically consolidated the domestic U.S. market from 11 airlines controlling some 80 percent of seat capacity a decade ago to 4 airlines today. It is this airline-driven model that incentivized U.S. airlines to reduce service at non-hub airports in favor of flying only the highest yield traffic over their mega-hubs and onto their alliance partners’ planes.
“What makes this faux worry so cynical is these very same U.S. airlines have politically blocked Norwegian Air International’s application to serve the U.S. for 2 years while waging a scorched earth political and defamatory campaign against the Gulf carriers,” stated BTC founder Kevin Mitchell. “These foreign airlines can accelerate the process of returning air service, connectivity and affordable airfares to those decimated mid-size communities both directly and through their code share partners like JetBlue,” added Mitchell.
The major U.S. carriers claim that they are worried about the potential of consumer protections in the FAA bill to “drive up the cost of air travel for consumers.” When they are not making that argument, they are saying small increases in the price of air travel, e.g., a $4 increase in passenger facility charge (PFC), will have a serious dampening effect on demand. Yet, a few years ago United Airlines raised its ticket change fee $50 on one day from $150 to $200.
There is abundant evidence that airlines do not reflect on consumers’ concerns and instead mislead and confuse consumers through opaque pricing strategies while seeking to undermine their regulator’s consumer protection authority and block foreign carrier new entry.