I’ve read a lot of merger complaints at this point, and this is probably the closest I’ve ever seen to a slam-dunk case. Upon this set of announcements, Spirit’s stock dropped 8%.Īnd I have to say, I understand why the stock fell. The DOT, as I noted last week in my piece on Buttigieg’s “moment of truth,” has a much easier time stopping such combinations, but hasn’t even tried since the 1980s. But what was not expected was that Department of Transportation Secretary Pete Buttigieg announced that his department would also use its authority to oppose the merger. A lot of people thought the Antitrust Division would challenge, and presumably JetBlue thought they could win a case. So on Tuesday, Hayes was faced with a complaint from the Antitrust Division, along with the state attorneys general of New York, Massachusetts, and D.C., calling the merger unlawful. And as it would be the sixth biggest airline buying the seventh biggest, it seemed so small.īut Hayes misread the situation, and did not seem to care that the Biden administration has made competition part of its policy agenda. I mean, it’s just one more merger piled on top of so many others. JetBlue CEO Robin Hayes ignored the skepticism from enforcers, perhaps finding it unimaginable the government would block such a merger. So last year, during a bidding war over Spirit Airlines, a lot of analysts assumed consolidation would continue. That’s a harmful practice called ‘price leadership,’ and it’s how all concentrated industries work.ĭespite these problems, the government, though it occasionally raises concerns, hasn’t stopped an airline merger since the 1980s. Think about how one airline will start charging a certain kind of fee, and then the rest start doing it too, knowing that they can essentially collectively hike prices. Firms often raise prices in the hopes that rivals will follow along. As of 2015, in 40 of the largest 100 airports, a single airline controls a majority of the market.Īnd even having rivals on a route doesn’t always guarantee competition. If you need to go from Boston to Orlando, you care about who flies to Orlando, not who has market share in aggregate for all flights within the U.S. Competition in air travel is also about specific routes. Instead, domestic airlines all just took higher profit margins.īroad national market shares understate the problem. At the time, dropping fuel prices had led to fare wars in Europe as airlines competed for customers, but not in the U.S. In 2017, The Economist noted that the profit per passenger in the U.S. Though it’s hard to find good pricing data that includes fees, it seems clear that U.S. From over a dozen competitors twenty years ago, we are now down to four major airlines - United, Delta, American Air, and Southwest - and these control upwards of 80% of the industry, with a few smaller carriers managing the rest.Īs a result, most people can only fly one or two airlines from where they are to where they are trying to go, so airlines don’t have to offer reasonable prices or customer service. On the low-cost carrier segment, Southwest bought AirTran, Alaska bought Virgin America, and JetBlue engaged in a quasi-merger with American Airlines via its Northeast Alliance. Over the last twenty years, Delta bought Northwest, United bought Continental, American bought TWA, America West, and U.S. And one key reason, though not the only one, is monopolization. airline industry has gotten much worse, with bad service, cancelations, and often higher prices through opaque fees. Since 2001, most flyers can see that the U.S. Keep your finances at your fingertips at all times: just pop your card into the unit and see how much you are worth.Antitrust enforcer Doha Mekki announces DOJ Action against JetBlue-Spirit merger as an anonymous baby boomer observes. In the Monopoly Electronic Banking game, you store your millions on your personal bank card. Choose your cool, colourful token, travel around the game board buying every property you land on, and bankrupt all opposition. It is the same classic, fast-dealing property trading game, but with electronic banking cards instead of cash. This electronic twist on the classic Monopoly game makes banking easy. The Monopoly Electronic Banking Game Uses Cards, Not Cash. It transfers your winnings just like a real credit card for fast fun. Buy every property you land on, build houses and hotels, and win it all! You will love using In this modern spin on the classic Monopoly game, you can collect rent instantly using the cool electronic banking unit and 4 colour-coded bank cards. The Monopoly Electronic Banking game is all about the money!
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