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Clinton Charges Airlines with ‘Gouging.’ Delta Disagrees

The intersections of politics and travel are mostly hidden behind the scenes, in the form of budgetary and regulatory skirmishes that are too esoteric for public consumption. But when would-be president Hillary Clinton called out the airline industry for gouging customers, Delta couldn’t let the charge go unchallenged.

In an editorial for Quartz, Clinton warned of the dangers of consolidation, charging that companies in industries with too few competitors “are using their power to raise prices, limit choices for consumers, lower wages for workers, and hold back competition from startups and small businesses.” As examples, she cited the airline, broadband Internet, and pharmaceutical industries.

Regarding the airline industry specifically, she wrote as follows:

Over the past year, oil prices have fallen from over $100 a barrel to under $50, and the price of jet fuel has dropped more than a dollar per gallon. But the four major airlines—down from 10 airlines just 15 years ago—are charging as much as ever for tickets, even as they hit travelers with extra fees, for everything from checking a suitcase to picking a seat when they fly home at the holidays.

In a news release issued the day after Clinton’s editorial, Ben Hirst, Delta’s executive vice president for corporate affairs and special counsel, disputed Clinton’s assertion that airfares hadn’t declined with the price of oil, pointing out that “The average airline fare in 2014 was about $400, including fees. This was $50 lower than the average fare 15 years ago, adjusted for inflation. And average fares in the U.S. today are 7 percent lower than they were a year ago.”

That may be true. But with more efficient aircraft, more automation, and lower fuel prices, the airlines’ costs have come down as well. And the final results are there, on the bottom line, for all to see: The airlines are racking up record profits.

Although Hirst alludes to spending “billions of dollars in new aircraft and improved technology to improve the customer experience,” those expenditures are arguably more about reducing costs than pleasing flyers. And the airlines have deployed much of their recent profit windfall toward stock buybacks, in order to boost the value of their shares. Nice for Wall Street, but of no value to Tommy Traveler.

At the end of the day, customer satisfaction with the airlines remains among the lowest of any industry. So while the inflation-adjusted price of airfare may be lower, travelers see themselves getting even less value for their dollar, in terms of service and comfort.

Consolidation has certainly been a boon for the airlines’ financial wellbeing. But there’s been no such benefit for consumers, who feel they’re being nickel-and-dimed and treated like cattle.

Which I think was Clinton’s point.

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