Lack of Competition in US Airline Industry
Lack of Competition in US Airline Industry

US airline industry has seen reduced competition because of domination from just one or two players that resulted from mega-mergers over the past decade. The reduced competition has increased the troubles of passengers as they now have to shell out more money for travelling.

Mega-mergers have reduced nine large US airlines to four - American, United, Delta and Southwest. The rise in domestic fares has even surpassed the inflation rate over the same period. According to analysts, decline in competitive pressure has largely contributed to the woes of passengers.

Mike Boyd, an aviation consultant frequently hired by airports, says that airlines have changed their approach to move away from benefits of passengers. A single airline has control over a majority of the market at 40 of the 100 largest US airports. One of two airlines controls a majority of seats for sale at 93 of the top 100, up from 78 airports, according to AP's analysis of data from Diio, an airline-schedule tracking service.

The jump in domestic fares has accounted for 5% over the past 10 years. The rise does not include the $25 checked bag fee and other add-on charges now being paid by many passengers.

Other factors that led to rise in fare prices are a stronger economy, longer average flight distances and some of the highest fuel prices in history. However, analysts are of the belief that consolidation gave license to airlines to charge more.

"The airline industry is less competitive now than it used to be. Some of us used to have eight or nine airlines to choose from. Now we have maybe four or five, just as we have four or five cellphone companies to choose from", said Seth Kaplan, managing partner of industry newsletter Airline Weekly.




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