Biden-Harris Administration Launches Wasteful Airline Industry Inquiry

Once again, the Biden-Harris administration is threatening to intervene in a healthy and competitive business market. The Departments of Justice and Transportation (DOT) announced on October 24, 2024, that they are launching a joint inquiry into competition within the air travel industry. It covers "previous airline mergers, exclusionary conduct, airport access, aircraft manufacturing, airline ticket sales, pricing and rewards practices and the experiences of aviation workers."

This broad and vague investigation is par for the course for the Biden-Harris administration, which has decided its business is to investigate and regulate every business regardless of its benefits to consumers.

The joint inquiry misses the reality of the current airline market. The air travel industry continues to offer customers increased access and options when flying. In 2023, 49 percent of the adult population in the U.S. flew commercially, compared to 39 percent of adults in 1997. This trend is due in part to the increasing number of airports that have a non-stop option. In 2023, 91 percent of the busiest markets have a non-stop flight option compared to 69 percent of markets with a non-stop option in 1990.

The DOT itself has documented the excellent performance of the airlines. Its March 1, 2024, Air Travel Consumer Report, noted (bold in original), "In 2023, airline service quality generally improved. Notably, only 1.29% of flights were cancelled across the 10 largest U.S. airlines, far below the 2.71% cancellation rate for 2022, 1.76% for 2021, 5.99% for 2020, and 1.90% for 2019. Across the National Airspace System, the 2023 cancellation rate was under 1.2% - the lowest in over a decade."

The report said that on-time arrival rates increased to 83.9 percent in December 2023 compared to 69 percent in December 2022 and flight cancellations were 0.4 percent in December 2023 compared to 5.4 percent in December 2022.

While volume and on-time arrival rates increased while cancellations decreased, prices have not risen as quickly for flights as in other parts of the economy. From 2019 to the first half of 2024, the consumer price index (CPI) for all items rose an average of 22 percent. During this same period, the CPI for airline fares rose only 0.6 percent.

It is therefore not surprising that better performance and minimal price increases led to the highest rate of customer satisfaction for airline passengers in history. The April 23, 2024, American Consumer Satisfaction Index (ASCI) press release on its travel study in 2023-2024 stated that satisfaction for travel has returned to pre-pandemic levels, and "the airline industry stands out, hitting an all-time customer satisfaction high of 77 after a second straight 1% year-over year improvement." The release quoted Associate Professor of Marketing at Michigan State University and Director of Research Emeritus at the ACSI Forrest Morgeson, who said these "new heights" of satisfaction, which are better than before the pandemic, show a strong bounce back by carriers, and that "innovations and service improvements implemented during the last two years have resonated with customers."

The Biden-Harris administration should be thanking the airlines for the tremendous services they are providing rather than forcing them to waste time and money that could be spent on keeping or improving record high levels of consumer satisfaction. But the administration has made it clear that consumer satisfaction and welfare are irrelevant to its unrelenting pursuit of more regulations across every industry. Quoting JPMorganChase Chairman and CEO Jamie Dimon's view of the onslaught of red tape in a family friendly way, everyone has had enough of this stuff.