BTC WRITES TO CONGRESS REGARDING AIRLINE PRICING
June 13, 2017
In a letter to Members of Congress, the Business Travel Coalition (BTC) called for a meaningful review of existing grants of Antitrust Immunity (ATI) and a reevaluation of general ATI policy with the U.S. Department of Justice.
BTC cites that industry consolidation and collusion amongst Delta Airlines, American Airlines, and United Airlines (Big 3) has significantly increased the risk of lower competition which equates to artificially high fare prices and fewer consumer benefits.
The letter goes on to state that the Big 3 have been a primary proponent of an anti-Open Skies campaign in protest of Emirates Airlines, Etihad Airways, and Qatar Airways (Gulf Carriers). The letter argues that Gulf Carriers charge market-based prices which are lower than the Big 3’s artificially higher air fares. However, the Big 3 have not been able to provide an instance of Gulf Carriers providing below-cost pricing in relation to government subsidies. Proof of such an allegation would be a violation of Article 12 of the U.S.-United Arab Emirates and the U.S.-Qatar Open Skies agreements. BTC claims that the lower-priced fares by Gulf Carriers are a result of the fact they do not collude through ATI or charge oligopoly-immunized fares with foreign joint venture (JV) partners.
The Business Travel Coalition asks that Congress and the Trump Administration rectify the mistake of prior administrations and take a hard look at airline pricing to fix this issue as the market is considerably less competitive than when the JV’s were first granted ATI. The Trump Administration had not responded to the letter as of the date of this publication.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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