Reviving Antitrust Enforcement in the Airline Industry

Abstract

The Department of Transportation (DOT) has broad but oft overlooked power to address antitrust issues among airlines through section 411 of the Federal Aviation Act. However, the DOT’s unwillingness to enforce antitrust more aggressively may be translating into higher fares and fees for airline travelers. More aggressive antitrust enforcement is urgently needed. Recent research has revealed a widespread practice of common ownership in the airline industry, whereby investment firms own large portions of rival airline companies. Although this practice leads to higher prices and reduced competition, antitrust regulators, from the DOT to the Department of Justice and the Federal Trade Commission, have declined to take action. This Note argues that the DOT has the clear legal authority—and the responsibility—under section 411 to address common ownership among airlines by promulgating a rule that limits investors’ ability to own large shares of multiple airlines. DOT regulation in this area could pave the way for more muscular antitrust regulation among industry-specific agencies.