Just 12 days before the election, the Departments of Justice and Transportation launched an investigation into the level of competition within the air travel industry. The move is a political stunt to point fingers about inflation and is yet another example of weaponizing Washington against private industry.
What are the government agencies suggesting? That the American airline market is akin to the monopolistic grip of J.D. Rockefeller’s company on 90 percent of America’s oil, or the Bell System, which had the U.S. telephone network completely cornered during the past century.
This depiction of modern air travel in the U.S. is laughable.
The U.S. boasts nearly 20 major passenger airline companies with revenues that exceed $1 billion annually. Most of these are household names and include carriers ranging from Delta and Southwest to United and JetBlue. Even the largest airline companies don’t control more than 20 percent of the passenger market.
And this competitive environment is a huge benefit for passengers. Since President Jimmy Carter opened up the industry to more competition in 1978, companies have duked it out on prices, amenities, rewards programs, and unique routes to popular destinations. As a result, during this period, airfares have fallen by half and the share of Americans who fly has increased by nearly 40 percent.
Does this dynamic market seem like a monopoly situation that is hurting consumers?
Compare it to, for example, toothpaste brands where the dominant player controls more than one-third of sales. Or what about the soft drink industry where one corporation is responsible for nearly half of all revenue? Does Uncle Sam have oral health or ‘Big Soda’ in its crosshairs next?
The bullying of air travel and its passengers is part of a blame game being played by Democrats in the closing days of the election. Upwards of 20 percent inflation under the Biden-Harris administration compared to roughly seven percent under Trump is a major political liability that is hanging around the campaign’s neck in need-to-win battleground states.
National polling finds inflation and the economy are consistently the biggest factor Americans are considering when in the voting booth. And deflecting attention away from the role Biden-Harris administration policies had in creating the kitchen table financial headache is a favorite Democrat strategy.
During Biden’s tenure, the White House has taken aim at a wide range of sectors – arguing companies, rather than government policies, are responsible for high prices. Scapegoats have included agriculture companies, logistics operations, energy producers, and drugmakers. The question is: what industry has the current White House not blamed at one time or another?
A President Kamala Harris would be no better. As part of an August campaign proposal, the candidate announced she would apply government price controls onto groceries, suggesting supermarkets are to blame for inflation at the checkout counter. That’s rich coming from Harris given she was the tie breaking vote in favor of the misnamed Inflation Reduction Act that exacerbated increasing consumer prices.
With polling that is too close to call, Democrats are throwing everything at the wall to see what sticks. Demonizing air travel is yet another toss.
