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If the latest wave of proposed airline mergers has left you a little worried, then you have a good memory.
Historically, airline mergers are terrible for passengers. And the latest two — the proposed combination of Alaska Airlines and Hawaiian Airlines, and of JetBlue Airways and Spirit Airlines — are no exception.
“Passengers should be very skeptical of airline mergers,” says Tolga Turgut, an associate professor at Florida Institute of Technology’s College of Aeronautics. “They usually lead to bigger companies trying to monopolize certain routes and regions. Monopolies or duopolies in turn usually lead to market abuse, price gouging and deteriorating quality of services.”
Passengers feel uncertain — and powerless
The question is, are these pairings inevitable? Or is there something air travelers can do right now to stop these companies from merging?
Air travelers like Eloisa Hife want to know. She’s a frequent traveler on Alaska Airlines, and she was troubled when she heard the airline was going to buy Hawaiian Airlines.
“It left me feeling a mix of apprehension and uncertainty,” she says.
Why? Hife recalls the mergers that came before that, including American Airlines and US Airways, Delta Air Lines and Northwest Airlines, and United Airlines and Continental Airlines. All of them promised lower fares and better service. But she says they actually delivered the opposite.
“These promises rarely translate into any tangible benefits for frequent flyers like me,” says Hife, the chief technology officer for a pet products website in Austin.
She’s right.
Are airline mergers good for passengers?
Airline mergers have harmed American air travelers on a breathtaking scale. A series of airline consolidations in the last two decades have left them with just four dominant carriers, which have raised prices and, with one notable exception, offered shamefully bad customer service.
“We haven’t had such a concentrated aviation industry in the United States in over 100 years,” says Bill McGee, a senior fellow for aviation at the American Economic Liberties Project.
These too-big-to-fail airlines deliver astonishing returns to their shareholders, but it comes at a high price. Passengers end up paying more and getting less because competition is all but eliminated. Research suggests that fares rise between 5 and 6 percent on overlapping or potentially overlapping routes, although the price increase has reportedly been higher after some of the latest mergers.
McGee says we’re caught in a “me-too” wave of smaller consolidations as airlines try to reach a critical mass to stay competitive. But that doesn’t make these corporate marriages any different from past ones.
The net effect will be the same: fewer choices, higher fares.
And customers are right to want to stop them. But how?
Want to stop airline mergers? The government is on your side
Fortunately, air travelers have a powerful ally. The U.S. Departments of Justice and Transportation have finally drawn a line in the sand and sued to block the proposed JetBlue-Spirit merger. The trial ended this month, and observers expect a ruling early next year.
In the past, the government stepped in to mitigate some of the worst effects of airline consolidation. For example, in order to approve the merger between American Airlines and US Airways, it mandated that the airlines divest themselves of some landing slots. But it wasn’t enough to overcome the huge problems created by the merger, like the loss of competition and, inevitably, higher fares.
Consumer groups are lining up against both mergers, too. Just this week, a coalition of seven organizations, including the American Economic Liberties Project, National Consumers League and Open Markets Institute, jointly sent a strongly worded letter to government regulators urging it to block the planned merger of Alaska and Hawaiian.
“Neither the airline industry nor American consumers can afford the further loss of airline competition that Alaska’s purchase of Hawaiian Airlines represents,” the consumer groups noted.
Ways to fight the airline mergers
You’ve probably heard a lot of so-called experts talking about the benefits of the latest mergers. The first step to fighting these mergers is to understand that the experts are not telling the truth. They’ll say whatever the airlines want them to, and they’ve never seen a merger they didn’t like.
To be clear, if any of the mergers on the table go through, your ticket prices will rise and service will go into freefall. So what can you do about it?
- If you’re a shareholder. If you hold shares in any of the airlines considering a merger, let the company know your misgivings. This may be difficult for you, since the value of your stock will be affected by the approval of the deal. But what’s good for shareholders isn’t always what’s good for passengers.
- As a voter. In an election year, your elected representative might actually listen to you, as opposed to the donors who are pushing for these mergers. Bonus points if your representative sits on one of the subcommittees with oversight of the airline industry.
- If you’re just watching. Even if you only fly occasionally, your voice is still important. . I’ve heard from multiple sources that the government is interested in hearing from consumers on this issue.
“Consumers have a voice when it comes to airline mergers,” says Anthony Radchenko, CEO of AirAdvisor, a company that advocates for air travelers. “It’s incumbent on passengers, workers and others worried about the Alaska-Hawaiian merger to send your concerns to Jonathan Kanter at the DOJ’s Antitrust Division so that the Department of Justice can rely on real-world complaints to fight this latest battle in the war on competition.”
And what if the latest mergers somehow get approved? Well, there’s one last option available to you as a U.S. citizen. You can vote for candidates who promise to stop rubber-stamping mergers and to protect competition — and American consumers. You’ll have an opportunity to do that in November.
Elliott’s tips on fighting airline mergers
Passengers don’t have to accept the latest mergers as inevitable. Here are a few ways you can influence the outcome:
Speak your mind. Write to your representative and contact the government regulators now. Let them know how previous airline mergers have affected you and tell them how you feel about the latest combination. The government is listening.
Avoid monopolistic airlines. Don’t reward the monopolistic airlines with your business or your loyalty. Instead, go out of your way to fly one of the smaller carriers that retain their independent spirit — startups like Avelo or Breeze.
Leverage your loyalty. If you’re a frequent flyer on Alaska or Hawaiian, now is the time to say something. If your loyalty program card is gold, silver or platinum, you should let your airline know what you think of its proposed merger. As an elite-level frequent traveler, you have the ear of your airline.
Christopher Elliott is an author, consumer advocate, and journalist. He founded Elliott Advocacy, a nonprofit organization that helps solve consumer problems. He publishes Elliott Confidential, a travel newsletter, and the Elliott Report, a news site about customer service. If you need help with a consumer problem, you can reach him here or email him at chris@elliott.org.
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