Since 2000, 20 Major Airline Companies Have Undergone Mergers, Reducing the Number of Major Airlines Flying Nationwide to Fewer Than 10

WOODBRIDGE, V.A. — Following the disruptions experienced by Southwest Airlines customers, leaving thousands of Americans — including many Virginians — stranded, U.S. Representative Abigail Spanberger is urging the U.S. Department of Justice to examine how airline companies engage in anticompetitive practices and determine whether these activities violate relevant antitrust laws.

Over the past two decades, a series of mergers has dramatically reduced the number of airlines flying in the United States. According to experts, this lack of competition has allowed airlines to post record profits despite under-investment in their infrastructure — leading to catastrophic outcomes for passengers.

In a letter sent to Assistant U.S. Attorney General Jonathan Kanter, Spanberger asked for the Justice Department to examine anticompetitive practices in the airline industry — particularly given that Virginians are now seeing a combination of fewer flights, more disruptions, higher costs, and record profits.

“Consolidation in the airline industry has steadily contributed to higher prices, fewer choices, and fewer flights for American passengers,” said Spanberger. “Since the summer of 2019, US air travel consumer complaints have increased by 57 percent. At the same time, airlines that specifically took federal aid with the stated purpose of avoiding mass layoffs in the industry reduced their workforce by about 42,000 full-time employees and 14,000 part-time employees as of September 2021. These layoffs led to months of turmoil in late 2021 and 2022 as several airlines, including Southwest, Spirit, and American Airlines struggled to rehire enough workers to meet increased demand. While these disruptions came at the expense of passengers, airline workers, and taxpayers alike, airlines were able to return to profitability despite a reduction in service and upheaval for many Americans.”

Spanberger continued, “This unique combination of fewer flights, more disruptions, higher costs, and record profits, all following two decades where the number of major airlines steadily dwindled nationally, paints a clear picture of an industry rife with anticompetitive practices. As a capitalist, I believe it is essential to the functioning of our free-market economy that there is robust competition that provides consumers with ample choices between products and services.”

In addition to requesting that the Department of Justice address potential anticompetitive practices by airlines, Spanberger requested that her staff be briefed on steps the DOJ has already taken, as well as steps that they plan to take, in order to address the growing frustration of consumers who are left without alternatives amid the quickly falling quality of available airline services.

Click here to read Spanberger’s letter, and the full letter text is also below.

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Dear Assistant Attorney General Kanter,

I write to you with concerns about the impacts of consolidation in the airline industry in light of recent disruptions experienced by Southwest customers, which left thousands of Americans traveling over the winter holiday season stranded. While the circumstances that impacted Southwest Airlines over the last month are unique, the factors that led to widespread disruption, high costs for consumers seeking to rebook flights, and many travelers stranded without an alternative, are not. Consolidation in the airline industry has steadily contributed to higher prices, fewer choices, and fewer flights for American passengers.

Over the past two decades, a series of mergers has dramatically reduced the number of airlines flying in the United States. Since 2000, twenty major airline companies have undergone mergers, reducing the number of major airlines flying nationwide to fewer than 10. A lack of competition has allowed airlines to post record profits despite under-investment in their infrastructure, leading to catastrophic outcomes for passengers. Across the industry, we have seen growing frustration from passengers who feel powerless to find meaningful alternatives. Since the summer of 2019, US air travel consumer complaints have increased by 57%. At the same time, airlines that specifically took federal aid with the stated purpose of avoiding mass layoffs in the industry reduced their workforce by about 42,000 full-time employees and 14,000 part-time employees as of September 2021. These layoffs led to months of turmoil in late 2021 and 2022 as several airlines, including Southwest, Spirit, and American Airlines struggled to rehire enough workers to meet increased demand. While these disruptions came at the expense of passengers, airline workers, and taxpayers alike, airlines were able to return to profitability despite a reduction in service and upheaval for many Americans. 

Meanwhile, since the start of the COVID-19 pandemic, airlines have dramatically reduced the number of flights servicing small and regional airports. According to data from the Regional Airline Association, of the 430 airports in the continental United States and Hawaii that offer commercial passenger service, 76 percent had fewer flights scheduled in 2022 compared to 2019. These cutbacks are despite surging demand for flights in 2022.

Even as these disruptions have grown more severe, ticket prices faced by passengers have also increased dramatically. According to the Federal Reserve of St. Louis, the price for airline tickets nationwide increased 25% in the period from November 2021 to November 2022 – the most significant hike since data was first collected in 1989 – far outstripping the 8% inflation seen over the same period.

While increased prices have impacted all Americans, they have been disproportionately felt by Americans serviced by small and regional airports. According to data collected by CheapAir.com, in 2022, airline tickets increased the most in smaller markets where competition between airlines was diminished as passengers had fewer flights and airlines to choose from. Near my district, in Richmond, Virginia, these increases translated to a 29% increase or roughly $75 for an average domestic airline ticket compared to 2021. The same analysis found that prices increased the least in airports with the most flights, demonstrating how competition can drive down prices.

This unique combination of fewer flights, more disruptions, higher costs, and record profits, all following two decades where the number of major airlines steadily dwindled nationally, paints a clear picture of an industry rife with anticompetitive practices. As a capitalist, I believe it is essential to the functioning of our free-market economy that there is robust competition that provides consumers with ample choices between products and services.

As such, I request that the Antitrust Division of the Department of Justice (DOJ) examine how airline companies engage in anticompetitive practices and determine whether these activities violate relevant antitrust laws. In addition, I request a briefing for my staff on what steps the DOJ has already taken to investigate anticompetitive practices in the airline industry.

Thank you for your attention to this critical issue.

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