WASHINGTON, DC - Today, Congressman Scott Fitzgerald (WI-05), who serves as Chairman of the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, held a hearing entitled, "The 30,000 Foot View: Competition and Regulation in the U.S. Airline Industry." Rep. Fitzgerald issued the following statement about the hearing:

"Annual airline passenger traffic has nearly quadrupled since the 1970s, and consumers now benefit from a range of choices, from the legacy airlines to the low-cost- and ultra-low-cost-carriers. This is all thanks to the Airline Deregulation Act of 1978.

"Unshackled from government regulation, what we saw over time was intense competitive pressure that pushed prices down and consumer choice up. But that pressure also led to a significant number of mergers, acquisitions, and bankruptcies.

"Between 1978 and 2005, 162 airlines filed for bankruptcy. Today's airline industry, while certainly more accessible and more competitive, is also more concentrated than ever before. The Big Four air carriers-American, United, Delta, and Southwest-control nearly 80 percent of domestic airline travel.

"While the Airline Deregulation Act freed the airlines from the decrees of government boards, the government still occupies a major role in commercial aviation that often benefits the incumbents at the expense of new entrants.For example, at seven of the nation's busiest airports, the Federal Aviation Administration (FAA) controls and distributes access to take-offs and landings through a slot system that often favors incumbent carriers.

"There are also long-term gate lease agreements that last for decades. In 2016, Delta signed a twenty-year lease agreement with the City of Atlanta for its airport. That lease agreement also stipulated that the City of Atlanta could not operate a second airport. These agreements create a significant barrier to entry for competitors seeking to gain a foothold at major airports. If a competitor can't access a gate, it can't compete for a slot.

"Consumers deserve a system where airlines compete freely and can innovate and grow, not a system where the government consistently puts its thumb on the scale to foreclose competition. Government-imposed barriers destroy competition, leaving consumers worse off.

"The most recent example of this was the proposed Spirit-JetBlue merger. In 2023, the Biden-Harris DOJ sued to block the proposed $3.8 billion merger. The DOJ claimed the merger would remove Spirit from the market and reduce competition. At the time, the proposed merger would have created the fifth largest airline domestically-with 10 percent market share-and increase competition against the Big Four.

"However, one year later, a federal judge in Massachusetts sided with the DOJ and blocked the deal. Spirit later filed for bankruptcy twice and ultimately shut down operations in May of this year. The blocked merger of Spirit-JetBlue offers a cautionary tale about government overregulation. By blocking the transaction, regulators prevented the market from testing whether a stronger competitor could emerge to challenge the industry's largest incumbents. At a minimum, the case demonstrates the importance of ensuring that antitrust enforcement promotes competition rather than merely preserving the status quo.

"Today, we had a constructive debate about the future of the airline industry. Our goal should be to remove unnecessary barriers to entry, encourage robust competition, and ensure that consumers, not regulators, are the ultimate beneficiaries of airline policy."

Watch Congressman Fitzgerald's opening statement from the hearing:

Background: This hearing examined competition and regulation in the U.S. airline industry, including the current market structure and government regulations. The hearing also evaluated recent mergers and acquisitions in the airline industry and their effect on consumers.

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