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Published on : Thursday, March 10, 2016
The Business Travel Coalition (BTC) today applauded Senator Ed Markey’s (D-MA) intervention to stop U.S. airlines from gouging consumers with fees that are grossly disproportionate to the value of the service received and result in a windfall for airlines. “Exhibit A” is when an airline charges $200 – 6 to 7 times the cost of handling a ticket change – when the cost for customer contact with a call center to change a reservation ranges from $25 to $35 dollars. This kind of unconscionable consumer price gouging is a textbook example of unfair methods of competition that underpin competition laws.
“In a perfectly competitive market, an airline industry consumer would be able to exercise his right to walk away from the $200 change fee and instead deal with other airlines eager to gain market share. However, now that the U.S. marketplace has gone from 11 airlines controlling some 80 percent of seat capacity to 4 airlines, the opportunities to vote with one’s wallet have been considerably reduced,” stated BTC founder Kevin Mitchell. “What’s more, such radical consolidation has led to excessive market power and tacit coordination among some airlines that slam consumers into a corner where they find unequal bargaining power in-the-extreme,” added Mitchell.