#DOJ, THE #NEA, ANY NEOTERIC IDEAS ARE LIKELY D.O.A.

History will look back on this administration as being the most responsible for increased prices to consumers over the last 45 years. Price has been and will remain the most important determinant as to whether the consumer chooses to travel or not.

May 19, 2023: “Today’s decision is a win for Americans who rely on competition between airlines to travel affordably,” said AG Merrick Garland. “The Justice Department will continue to protect competition and enforce our antitrust laws in the heavily consolidated airline industry ...”

AND BY THE WAY, UNWIND THIS ALLIANCE THAT IS CONFERRING REAL CONSUMER BENEFITS AS IT MATURES IN THE NEXT 30 DAYS.

It did take me awhile to get this combination. I did not see it much different than DOJ regarding the movement of metal early on. I saw it as a really smart move by AA/B6 getting the combination approved with an administration having nearly two feet out of the door. The blessing from Sen. Schumer didn't hurt either. As the NEA matured, it began to/is producing real consumer benefits - not just moving metal.

A question: was it (NEA) merely playing catch up by addressing puzzle pieces it (AA) gave away over the years that left the carrier structurally bereft of critical share in some of the most important domestic and international cities in the U.S.?

DOJ relied on one expert that saw the NEA as problematic. It rejected the testimony of NEA's experts. At p. 47 of the DOJ decision, it credits Dr. Nathan Miller’s analysis suggesting the NEA will create upward pricing pressure, a conclusion which is well supported by basic economic principles and incentives, and which confirms the conclusions the Court reaches independently and explains in the discussion of its legal conclusions ...

The cynic asks whether input costs (labor, fuel, interest rates, airport) contribute to higher fares? Guess not. That damn NEA will have a more significant impact on fares I guess - at least in NYC and BOS. Slots and the self-imposed perimeter limitation of 1500 miles have not contributed to higher fares in NYC either, I guess. As for BOS, it has been a hotbed of competition since at least 2018. I digress. Data doesn't lie.

We recently created the #SwelbarZhongAirportAccessIndex. The intent was to measure/rank each airport on air service criterion only among peers. As the ULCCs grow and begin to serve smaller markets while the network carriers cut back or exit, it becomes important to score air service on both local and connecting access to the system. Network carriers and ULCCs confer very different types of benefits.

One interesting finding for Albert and I came within the Large Hub airport category. There were 9 of 30 large hub airports that were accorded an increase in both their air service quality score and their ranking among peer airports. Two of those were LGA and BOS.

Winners: Delta, United and Southwest. Losers: Air travel consumers in NYC and BOS.