ASTA has outlined its arguments about why the U.S. airline industry is an "unhealthy competitive landscape." The Society on Tuesday submitted comments after the federal departments of Transportation and Justice issued a request for information on the state of competition in air travel.
"To ensure that air ticket distribution intermediaries can compete on an equal footing with the airlines themselves, regulators must ensure that air carriers provide the GDSs with full access to fare, ancillary, schedule and availability information," ASTA said in a release. "Likewise, airlines must not be permitted to utilize their substantial market power to disadvantage, pricewise or otherwise, the 40% of consumers who prefer to book air tickets through the travel agency distribution channel. Transparency is essential if the air transportation market is to function in a manner most likely to consistently deliver a high level of service at the lowest possible price."
The DOT/DOJ public inquiry was launched last October. It drew mixed reactions from the industry: ASTA welcomed the inquiry and the chance to air its views on the subject, while the U.S. Travel Association called it "another in a long line of disappointing political stunts."
ASTA on Tuesday filed a 13-page document to the DOJ's Antitrust Division. In the remarks, ASTA argued that since airline deregulation in 1978, a number of mergers and acquisitions have led to a decline in competition.
While there was a period of "an explosion of competitive initiatives" among existing and new airlines following deregulation, ASTA said "it did not take long for a new reality to set in." Consolidation continued and today, ASTA said, four carriers -- Delta, American, Southwest and United -- control more than two-thirds of the market. That is unlikely to change because of the high barrier to entry into the airline industry, ASTA said.
Further, ASTA argued, airlines have established dominance in their hub cities and airports, and also at airports that require slot management or a formal review process due to high volumes of air traffic. ASTA believes that federal regulators need to force airlines to divest slots in airports that have slot controls or require a formal review and approval process for air traffic demand.
The Society said international airline alliances contribute to "an already unhealthy competitive landscape," too, diminishing competition in international air travel.
ASTA also delved into IATA's New Distribution Capability and airline rewards programs, specifically pointing to American Airlines' failed NDC distribution strategy that the Society doggedly fought until its reversal last year.
"In our view, all such efforts to discriminate on the basis of distribution channel, with the purpose and effect of disadvantaging competitors, and with no countervailing consumer benefit, should be prohibited as unfair and deceptive practices pursuant to DOT's existing statutory authority," ASTA said.
ASTA said it looks forward to sharing its views about airline competition with the Trump administration.