Issues

ICYMI – Think Tank Confirms that Big Airline Consolidation Is Bad for Consumers and Rural Communities


In case you missed it, the Eno Center for Transportation, a think tank specializing in transportation policy, earlier this month released a study entitled “What effect does airline consolidation have on passengers,” which examines the impact airline consolidation on consumer choice, competition, and service to smaller communities.  The report found what many smaller communities and consumers already know – that as the big airlines increasingly consolidate and concentrate their resources in fewer hub airports, competition, consumer choice and options for passengers in small and rural communities become more limited.

Report: Consolidation Has Reduced Travel Options for Rural Communities

  • According to Eno’s latest report, airline consolidation has limited travel options for passengers in small and rural communities. “Consolidation has concentrated traffic at the largest airports…since 2005, passenger traffic at large hub airports increased 15 percent, while medium and small hubs lost traffic…Consolidation could also negatively affect passengers if it forces more connecting flights for customers not flying out of large hubs.” (Eno Center for Transportation, November 2017)
  • The report continues, “airlines typically concentrate their traffic in a few large airports because of the efficiency advantages of connecting passenger…Passengers using small and medium hub airports could be worse off as airlines have reduced service in several smaller markets. (Eno Center for Transportation, November 2017)
  • This finding reflects a fact that many rural communities already know and echoes findings from the Government Accountability Office (GAO), which found that “approximately 1.2 million scheduled domestic flights were eliminated from 2007 through 2013 at large-, medium-, and small-hub, and nonhub airports. Scheduled departures at medium-hub airports decreased nearly 24 percent between 2007 and 2013… about 20 percent at small-hub airports over the same time period.” (http://www.gao.gov/assets/670/664060.pdf)
  • The study also notes that “smaller airlines complain about access to scarce runway slots and terminal gates at large airports, which limits their ability to enter and compete in the market.” (Eno Center for Transportation, November 2017)

Consolidation Reduces Competition by Keeping Out New Entrants

  • According to Eno’s report; “Research shows that new airline entrants in concentrated markets result in lower airfares…. But the prospects for new entrants is dim, despite airlines making record profits.” (Eno Center for Transportation, November 2017)
  • Eno also notes that according a recent study following the American/US Airways merger; “future mergers would probably not result in any net benefit to consumers.” (Eno Center for Transportation, November 2017)

This Once Again Begs the Question: Why Would We Hand Over Air Traffic Control to the Big Airlines, So They Can Further Reduce Competition and Reduce Service to Smaller Communities?

Privatizing air traffic control would give even more power to the big airlines, allowing them to further concentrate flights and resources at the largest hub airports, and restrict access for low cost competitors. The airlines simply should not be entrusted with the power the national air traffic control system.

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