Lawmakers from across the aisle blamed a lack of competition among airlines for the United incident where a passenger was forcibly removed from a plane.
Members of the U.S. House Transportation and Infrastructure Committee hosted a hearing with airline executives Tuesday to discuss the ways companies were harming the customer service experience.
One gripe repeatedly mentioned throughout the 5-hour hearing was consumers’ lack of choice when selecting an airline.
“It’s an absolute joke that there’s competition in the airline industry,” Duncan Hunter, R-Ca., said during the hearing.
Airlines do have monopolies over certain routes. As Hunter noted, it’s impossible to fly directly from San Diego to New York without booking United.
That’s largely a product of United’s 2010 merger with Continental Airlines, just one of a series of consolidations that have occurred over the last 12 years. Today, roughly 80% of air traffic is spread out among the four major carriers: United, American Airlines, Delta, and Southwest.
United CEO Oscar Munoz rejected the notion that there isn’t competition among airlines, comparing consolidation within the airline industry to that among telecoms, which he said still have “a lot of product offerings” and “healthy competition.”
The recent merger between Charter and Time Warner Cable, which made the duo the second-largest cable company in the US, is just one example of how mega-mergers never seem too far away among telecoms. Verizon’s CEO recently said he’s open to merger talks with Comcast, Disney, or CBS. Analysts are eyeing possible mergers between T-Mobile and Sprint, Verizon and Charter, and Dish and Verizon, according to Axios.
The Obama administration blocked AT&T’s bid to buy T-Mobil in 2011, with opponents arguing it would have created a duopoly between AT&T and Verizon. But the Trump administration is expected to be more lax when it comes to these deals, as is FCC Chairman Ajit Pai.
Hunter argued that the telecom industry is still more “highly regulated” than airlines.
“You are in a near monopoly position. And that’s why so many of us are concerned,” Elizabeth Etsy, D-Ct., said at the hearing. “If the market were functioning well this could never have happened, Mr. Munoz.”
Whether the hearing’s comments will result in legislative action, however, remains to be seen.
Executives from Alaska Airlines, American Airlines, and Southwest said they were all opposed to the prospect of Congress imposing regulations when the notion was brought up by Rick Crawford, R-Ark. Crawford said he wasn’t a proponent of regulation, but said airlines must demonstrate they can “self-regulate” to prevent Congress interference.
“If airlines don’t get their act together, we are going to act,” Bill Shuster, chair of the committee, said.
Business Insider Emails & Alerts
Site highlights each day to your inbox.