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Airlines Under Fire from Media, Lawmakers

SmarterTravel

The New York Times editorial board is an august group, comprised of 19 of the newspaper’s most distinguished writers and editors. When the Times publishes an opinion piece with the editorial board’s byline, it typically concerns a matter of weighty consequence, like torture or income inequality.

This week, the group saw fit to weigh in on airfares and fuel surcharges. Headlined No Relief for Travelers, the editorial takes the airlines to task for upping fares and maintaining fuel surcharges, even as the cost of oil has fallen by half since June. “(T)he decline in oil prices has had made no perceptible difference on the cost of flying. Fares are up from earlier this year, and many airlines are still levying significant fuel surcharges on the tickets they sell.”

Although the editorial stops short of using the word, it clearly considers the fares and surcharges a gouge. And it places the blame for the airlines’ outsized pricing power squarely on consolidation in the industry.

(I)t doesn’t take an investigation to figure out that higher airfares are the direct result of reduced competition. Consumer advocates clearly warned that allowing mergers like the 2013 American Airlines-US Airways combination would harm consumers. This is exactly what is now happening.

The Times isn’t alone in questioning the ethics of the airlines’ current pricing practices. Chuck Schumer, Democratic Senator from New York, is calling for a federal investigation into the matter. According to Schumer:

At a time when the cost of fuel is plummeting and profits are rising, it is curious and confounding that ticket prices are sky-high and defying economic gravity. So I’m urging the feds to step in and do a price investigation on behalf of consumers who must buy holiday travel tickets that can break the bank. The industry often raises prices in a flash when oil prices spike, yet they appear not to be adjusting for the historic decline in the cost of fuel; ticket prices should not shoot up like a rocket and come down like a feather. That is why I urge the DOJ and DOT to immediately investigate why airline profits are not more efficiently being passed down to consumers.

It remains to be seen whether the recent surge in high-profile pushback will have any discernible effect on the airlines’ pricing. Unfortunately, the warnings, by this writer and others, that airline mergers would lead to uncompetitive pricing behavior fell on deaf ears. Now it’s too late to de-merge American and US Airways, United and Continental, Delta and Northwest, Southwest and AirTran. There’s no quick and easy way to reestablish a genuinely competitive marketplace.

What’s clear, however, is that popular opinion is turning against the airlines. Perhaps it’s not too much to hope that that can play a small part in mitigating the airlines’ greed and dishonesty.

Reader Reality Check

Higher fares? Fuel surcharges? Where does it end?

This article originally appeared on FrequentFlier.com.

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