Thousands of flights have been canceled over the past couple weeks as the transit system has been rocked by weather. One airline in particular, Southwest Airlines, has struggled to handle the conditions more than others. But fear not, Sen. Elizabeth Warren (D-MA), Congress’s resident hammer perpetually in search of the same two or three nails, has a solution: block an airline merger that does not involve Southwest in any way.
In response to the news of Southwest’s cancellations, Warren tweeted that this is just the “latest example” of the effects of “consolidation in the airline industry.” She then went on to urge that the Department of Transportation more aggressively use its antitrust tools, beginning with blocking the proposed merger between Spirit Airlines and JetBlue.
Setting aside the non sequitur of jabbing Spirit and JetBlue for Southwest’s struggles, Sen. Warren seems to deeply misunderstand the airline industry as it stands. For one thing, while Southwest’s customer service has collapsed in the face of storms centered around its main hubs, Southwest has not historically been an outlier in on-time performance. In recent years, Southwest has only been behind Delta among the largest carriers in on-time arrival rates.
And Southwest’s recent struggles are hardly the result of its perceived status as an entrenched monopoly — Southwest is only the fourth-largest American airline, a distant fourth behind American, United, and Delta. Despite how antitrust advocates define the term, the fourth-largest American company in an industry (not even considering foreign companies competing in international air-travel) cannot be a monopoly.
What’s more, the idea that a combined Spirit/JetBlue would represent a market titan is absurd. Both companies are far smaller than the four American airlines ahead of them, and still would be smaller combined. If anything, a merger would create more competition, not less.
Fundamentally, however, the greater point is that advocates of more aggressive government involvement in the airline industry (and the economy in general) tend to idealize the government's ability to improve consumers’ experience. A wave of cancellations is bad and has hurt Americans across the country, but there’s no reason to imagine that they would be any less likely in a highly-regulated industry.
There’s plenty of other reasons to be suspicious of a government more involved in air travel. After airline deregulation in 1978, the average cost of a plane ticket dropped from $611 in inflation-adjusted dollars in 1980 to $365 thirty years later (including fees). And while we all love to complain about airline food and the shrinking size of complimentary snacks, the truth is that the more pampered experience is still an option — most of us just tend to prefer the cheaper main cabin price.
And while Southwest Airlines is now being invoked to justify antitrust action, researchers at the University of Virginia coined the term “Southwest effect” to note how, between 2012 and 2015 when Southwest entered a market, prices decreased by 15 percent on average with decreases across all carriers. A merged Spirit/JetBlue would be likely to have a similar effect, particularly given Spirit’s business model as a low-cost option.
So as much as Sen. Warren’s sudden broadside at JetBlue and Spirit is off-base, it reflects the faith among antitrust advocates that regulation is a panacea for anything short of perfection in the status quo. Americans should be sure not to let them ruin the airline industry.
