The Biden administration has made injecting more competition into American industries a key priority.
Andre Barlow, antitrust lawyer at Doyle, Barlow & Mazard LLC, said that in the “antitrust context” the airlines would have difficulty getting the deal through the ministry’s antitrust division.
“Given the administration’s stance against mergers, it will be difficult for these two low-budget competitors to convince antitrust authorities that their merger will lead to lower prices,” he said.
Frontier and Spirit pledged to avoid any job loss and create 10,000 direct jobs by 2026. They also promised that the merger would save consumers $1 billion annually.
“The Department of Justice will investigate whether the two airlines overlap with respect to city pairs and whether combining two low-cost airlines would result in higher prices for consumers,” Mr Barlow said. .
Kenneth Quinn, a partner at Clyde & Co, however, said the DoJ would have “difficulty blocking this merger”.
“You have two very low cost carriers with a common fleet without a lot of overlapping competitive city pairs,” he said.
In September, the Attorney General filed a lawsuit to end the “Northeast Alliance” partnership between American Airlines and JetBlue Airways, arguing that it aims to eliminate “significant competition between a dominant airline and a competitor single disruptive”.
The justice minister declined to comment on the proposed merger. A White House spokesperson did not comment on the proposed Frontier Spirit merger, but said the Biden administration is “committed to protecting competition in a broad range of industries, in the interests of consumers.” .
In September, the administration said it planned to award 16 timeslots for flights at Newark International Airport in New Jersey, a low-cost carrier yet to be determined.
These slots previously belonged to United Airlines, then were transferred to Southwest Airlines before being sold. United pleaded for them to be removed to ease congestion.
Last month, the Department for Transport published a new rule aimed at enabling regulators to act more quickly to protect airline customers from unfair and misleading practices. It provides for future rules on the reimbursement of air tickets and the transparency of baggage fees and other airline costs.
American and three other airlines control over 80% of the US domestic air market.
Tim Wu, a White House adviser https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/05/white-house-announces-additional-policy-staff on technology and politics of competition, argued in 2018 that the consolidation of https://www.nytimes.com/2018/05/01/opinion/sprint-t-mobile-merger.html has resulted in the largest US airlines “have found ways to give less for more: fewer flights (bouncer planes), smaller seats, fewer flight attendants, higher baggage and change fees, and stubborn resistance to lower fares. “