If you closely followed the debate leading up to the American-US Airways merger, you’ll recall a period during which it seemed a safe bet that the Department of Justice would nix the tie-up on antitrust grounds. DOJ officials signaled that, after signing off on mergers between United and Continental, Delta and Northwest, and Southwest and AirTran, further consolidation was likely to impede competition and give the airlines outsize pricing power. And it was their duty to forestall just such an outcome.
And yet, in the end, the merger was approved, and today roughly 80 percent of the country’s commercial flights are controlled by just four carriers.
As I’m sure were many other industry-watchers, I was taken aback by the reversal and left wondering what had happened behind closed doors to tip support in the merger’s favor.
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An in-depth article published this week by ProPublica, the Pulitzer Prize-winning investigative journalism organization, sheds plenty of harsh light on an approval process that was anything but fair and transparent.
The article begins by confirming that the DOJ’s suit to derail the merger amounted to an admission by the Department that it had been too lenient in its previous merger approvals, and that consolidation had gone too far. But the Department’s top administrators and lawyers were convinced they had a strong case against the American-US Airways merger, and that they’d succeed in squashing it.
What they were unaware of, however, was the industry-funded effort to undermine the DOJ’s efforts, deploying de facto lobbyists to make the airlines’ case to high-ranking officials in both the White House and at DOJ, which the ProPublica piece describes in considerable detail.
As we all know, those lobbying efforts were successful, and the DOJ withdrew its lawsuit, allowing the merger to proceed with only token concessions.
For anyone who puts consumer interests above those of big business, the story is a depressing one, not just for the end result but for the failure of the process itself, which was supposed to protect consumers from corporations’ oligarchic tendencies.
When a consumer-protection agency’s best instincts can be subverted by money and power, it’s no wonder that cries of “The system is rigged!” have been so loud and persistent, or that they resonate with so many.
Reader Reality Check
While not surprised, I am outraged. You?
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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two
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Beginning on June 1, Spirit will become the third airline to pull out of the Cuba market altogether, joining Frontier and Silver Airways. Two other airlines, American and JetBlue, have cut capacity on their Cuba flights, either by reducing frequency or downgrading to smaller planes.
When Muslim Advocates and the NAACP issue a joint letter accusing the U.S. airline industry of racism, it’s big news. And when the NAACP, the “nation’s oldest and largest nonpartisan civil rights organization,” follows that up with an advisory specifically questioning the racial policies of the nation’s largest airline, American, it’s nothing less than a media firestorm. Indeed, all the major news media covered the story exhaustively. And “American Airlines” has been a trending Twitter topic for several days.
Enter the American Airlines “Your Vacation Spot” sweepstakes by April 1, 2016, for a chance to win the grand prize: a $10,000 American Airlines Vacations travel voucher.
Alaska Airlines is justly lauded for its Mileage Plan loyalty program, which among other features boasts 17 airline partners, allowing program members to earn and redeem miles for flights throughout the world.
Update, September 18: The FAA has issued updated guidance regarding usage of Samsung Galaxy 7 phones in flight, stating “passengers may not turn on or charge the devices when they carry them on board a plane. Passengers must also protect the devices from accidental activation, including disabling any features that may turn on the device, such as alarm clocks, and must not pack them in checked luggage.” The statement does not mention if any penalties are associated with failure to comply with this guidance. Read the full statement here.
Yesterday’s crash landing of Emirates flight EK521 in Dubai generated a flood of images of panicked travelers, loaded down with their carry-on bags, fleeing the burning B777-300. The headline of Bloomberg’s coverage of the incident said it all: “Crashing, Burning Planes Don’t Stop Passengers From Grabbing Their Luggage.”
On Friday evening—traditional timing for bad-news announcements that companies hope will go unnoticed by the public and unreported by the media—American published the new mileage-earning rates, effective from August 1, for travel on AAdvantage partner airlines.
I recently dubbed Alaska Airlines’ loyalty program, Mileage Plan, the “Best Mileage Program for Average Travelers.” It’s a hard-won honor, awarded for two principal reasons. First, Alaska has chosen to retain Mileage Plan’s distance-based earning scheme, even as most other airlines have adopted less generous spend-based earning. And second, Alaska has cobbled together a roster of earning and redemption partners that rivals those of the world’s largest airlines.