Blumenthal Questions Assistant Attorney General Kanter on Airline Consolidation & Its Negative Effects on Consumers

Hearing

U.S. Senator Richard Blumenthal (D-CT) questioned U.S. Assistant Attorney General Jonathan Kanter at a Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on federal enforcement of antitrust laws about consolidation in the airline industry.

"I don't think it will be a news flash to anyone in this room that Americans are beyond furious about cancellations and delays by airlines and they're beginning to understand that the reason why airlines mistreat them and why they are mismanaged is because of consolidation," said Blumenthal.

"In any competitive marketplace, it you paid for the product like an airline ticket, you would actually have a seat in a competitive marketplace," Blumenthal continued. "It would not be cancelled at the very last moment or if you ask for your money back, you would get it at least with proper enforcement, not be given a temporary flight credit."

Blumenthal emphasized the need of cross-agency cooperation in effective antitrust enforcement, asking Kanter:

Blumenthal: "Mr. Kanter, would you agree with me that both the antitrust division and the FAA, the FAA has a role here too, should be very skeptical, exceedingly skeptical of any mergers or agreements that will lead to more consolidation in air travel?"

Kanter: "We remain committed to fighting airline concentration when it breaks the law. As you indicated, Americans are furious and coopetition can yield a wide range of benefits to air travelers including better service, lower prices."

Blumenthal: "I'm hoping you're giving me a yes."

Kanter: "I think so."

The full transcript of Blumenthal and Kanter's exchange is available below.

U.S. Senator Richard Blumenthal (D-CT): Thank you Madam Chair and thank you for having this very important hearing. Thank you both for being here and for your very good work. I don't think it will be a news flash to anyone in this room that Americans are beyond furious about cancellations and delays by airlines and they're beginning to understand that the reason why airlines mistreat them and why they are mismanaged is because of consolidation. That consolidation represents one of the massive failures in antitrust enforcement and the airlines' practices that have resulted are a preeminent example of corporate mismanagement. We don't have pilots or flight attendants despite American taxpayers providing the airlines tens of billions of dollars. And Americans are absolutely enraged.

In any competitive marketplace, it you paid for the product like an airline ticket, you would actually have a seat in a competitive marketplace. It would not be cancelled at the very last moment or if you ask for your money back, you would get it at least with proper enforcement, not be given a temporary flight credit.

So I want to applaud first of all the Department of Justice decision in September to block American Airlines and Jet Blue's attempts to combine their operations in several markets and I want to ask you Mr. Kanter, would you agree with me that both the antitrust division and the FAA, the FAA has a role here too, should be very skeptical, exceedingly skeptical of any mergers or agreements that will lead to more consolidation in air travel?

U.S. Assistant Attorney General Jonathan Kanter: Thank you Senator. A week from today we will begin our opening arguments in our case in Boston challenging the Northeast Alliance involving American Airlines and Jet Blue and we remain committed to fighting airline concentration when it breaks the law. As you indicated, Americans are furious and coopetition can yield a wide range of benefits to air travelers including better service, lower prices,

Blumenthal: I'm hoping you're giving me a yes.

Kanter: I think so.

Blumenthal: Okay, thank you. Because I really think this is a matter of credibility for antitrust enforcement and I hope that you will join me in that view.

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