[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
THE 30,000 FOOT VIEW: COMPETITION AND
REGULATION IN THE U.S. AIRLINE INDUSTRY
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HEARING
BEFORE THE
SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
REGULATORY REFORM, AND ANTITRUST
COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, JUNE 24, 2026
__________
Serial No. 119-74
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Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
64-097 WASHINGTON : 2026
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COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair
DARRELL ISSA, California JAMIE RASKIN, Maryland, Ranking
ANDY BIGGS, Arizona Member
TOM McCLINTOCK, California JERROLD NADLER, New York
THOMAS P. TIFFANY, Wisconsin ZOE LOFGREN, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
CHIP ROY, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia
BEN CLINE, Virginia TED LIEU, California
LANCE GOODEN, Texas PRAMILA JAYAPAL, Washington
JEFFERSON VAN DREW, New Jersey J. LUIS CORREA, California
TROY E. NEHLS, Texas MARY GAY SCANLON, Pennsylvania
BARRY MOORE, Alabama JOE NEGUSE, Colorado
HARRIET M. HAGEMAN, Wyoming LUCY McBATH, Georgia
LAUREL M. LEE, Florida DEBORAH K. ROSS, North Carolina
WESLEY HUNT, Texas BECCA BALINT, Vermont
RUSSELL FRY, South Carolina JESUS G. ``CHUY'' GARCIA, Illinois
KEVIN KILEY, California SYDNEY KAMLAGER-DOVE, California
GLENN GROTHMAN, Wisconsin JARED MOSKOWITZ, Florida
BRAD KNOTT, North Carolina DANIEL S. GOLDMAN, New York
MARK HARRIS, North Carolina JASMINE CROCKETT, Texas
ROBERT F. ONDER, Jr., Missouri SUMMER LEE, Pennsylvania
DEREK SCHMIDT, Kansas
BRANDON GILL, Texas
MICHAEL BAUMGARTNER, Washington
------
SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
REGULATORY REFORM, AND ANTITRUST
SCOTT FITZGERALD, Wisconsin, Chair
DARRELL ISSA, California JERROLD NADLER, New York, Ranking
BEN CLINE, Virginia Member
LANCE GOODEN, Texas J. LUIS CORREA, California
HARRIET HAGEMAN, Wyoming BECCA BALINT, Vermont
MARK HARRIS, North Carolina JESUS G. ``CHUY'' GARCIA, Illinois
DEREK SCHMIDT, Kansas ZOE LOFGREN, California
MICHAEL BAUMGARTNER, Washington HENRY C. ``HANK'' JOHNSON, Jr.,
Georgia
CHRISTOPHER HIXON, Majority Staff Director
ARTHUR EWENCZYK, Minority Staff Director
C O N T E N T S
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Wednesday, June 24, 2026
OPENING STATEMENTS
Page
The Honorable Scott Fitzgerald, Chair of the Subcommittee on the
Administrative State, Regulatory Reform, and Antitrust from the
State of Wisconsin............................................. 1
The Honorable Becca Balint, a Member of the Subcommittee on the
Administrative State, Regulatory Reform, and Antitrust from the
State of Vermont............................................... 3
The Honorable Jamie Raskin, Ranking Member of the Committee on
the Judiciary from the State of Maryland....................... 5
WITNESSES
The Hon. Christopher T. Sununu, President, CEO, Airlines for
America (A4A)
Oral Testimony................................................. 7
Prepared Testimony............................................. 10
Timothy M. Ravich, Senior Counsel, Tressler LLP
Oral Testimony................................................. 22
Prepared Testimony............................................. 24
Kristian Stout, Director, Innovation Policy, International Center
for Law and Economics (ICLE)
Oral Testimony................................................. 37
Prepared Testimony............................................. 39
Nancy L. Rose. Charles P. Kindleberger Professor of Applied
Economics, Massachusetts Institute of Technology
Oral Testimony................................................. 55
Prepared Testimony............................................. 57
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted for the record by the Subcommittee on the
Administrative State, Regulatory Reform, and Antitrust are
listed below................................................... 89
An article entitled, ``Don't Let What Happened to Spirit Airlines
Happen to Warner Bros,'' Jun. 8, 2026, National Taxpayers
Union, submitted by the Honorable Scott Fitzgerald, Chair of
the Subcommittee on the Administrative State, Regulatory
Reform, and Antitrust from the State of Wisconsin, for the
record
Materials submitted by the Honorable Jesus G. ``Chuy'' Garcia, a
Member of the Subcommittee on the Administrative State,
Regulatory Reform, and Antitrust from the State of Illinois,
for the record
A letter to Ed Basrian, Chief Executive Officer, Delta
Airlines, from Members of Congress, Nov. 5, 2025
A report entitled, ``How to Fix Flying: A New Approach to
Regulating the Airline Industry,'' Jan. 2024, American
Economic Liberties Project
Materials submitted by the Honorable Becca Balint, a Member of
the Subcommittee on the Administrative State, Regulatory
Reform, and Antitrust from the State of Vermont, for the record
An article entitled, ``Spirit Airlines shuts down, industry's
first Iran war casualty,'' May 2, 2026, Reuters
An article entitled, ``Trump says `I love the inflation' as
US prices rise at the fastest rate in three years,'' Jun.
11, 2026, BBC
An article entitled, ``U.S. Airlines Try to Abandon Passenger
Rights and Performance Reports--to Secretly Police
Themselves,'' Sept. 4, 2025, Frommer's
A statement from the Travel Tech Association, Jun. 24, 2026
Materials submitted by the Honorable Jamie Raskin, Ranking Member
of the Committee on the Judiciary from the State of Maryland,
for the record
A Decision from the United States District Court of
Massachusetts, United States of America, Commonwealth of
Massachusetts, District of Columbia, State of California,
State of Maryland, State of New Jersey, State of New
York, and State of North Carolina v. Jetblue Airways
Corporation, and Spirit Airlines, Inc., Jan. 16, 2024
An article entitled, ``Biden-Era M&A Data Shows Continuity,
Not Revolution,'' Feb. 21, 2025, Law360
An article entitled, ``Spirit Airlines to exit Chapter 11
`within weeks' as court backs recovery plan,'' Feb. 21,
2025, AeroTime
THE 30,000 FOOT VIEW: COMPETITION AND REGULATION IN THE U.S. AIRLINE
INDUSTRY
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Wednesday, June 24, 2026
House of Representatives
Subcommittee on the Administrative State,
Regulatory Reform, and Antitrust
Committee on the Judiciary
Washington, DC
The Subcommittee met, pursuant to notice, at 10:04 a.m., in
Room 2141, Rayburn House Office Building, the Hon. Scott
Fitzgerald [Chair of the Subcommittee] presiding.
Present: Representatives Fitzgerald, Issa, Cline, Hageman,
Harris, Schmidt, Baumgartner, Balint, Garcia, and Johnson.
Also present: Representatives Jordan and Raskin.
Mr. Fitzgerald. The Subcommittee will come to order.
Without objection, the Chair is authorized to declare a recess
at any time.
We welcome everybody to today's hearing on regulation and
competition in the airline industry.
Without objection, Mr. Nehls of Texas will be permitted to
participate in today's hearing for the purpose of questioning
the witnesses if a Member yields them time for that purpose.
I will now recognize myself for an opening statement.
Today's hearing will examine competition in the U.S.
airline industry and the government regulations that limit such
competition. As well, we will hear from witnesses. Consumers
have more choice than ever before when it comes to both
domestic and international air travel. Annual passenger traffic
has nearly quadrupled since the 1970s, and consumers now
benefit from a range of choices, from the legacy airlines to
the low-cost and ultra-low-cost carriers.
That is all thanks to the Airline Deregulation Act of 1978.
Prior to passage of this law, the U.S. airline industry was
regulated by a government-created body known as the Civil
Aeronautics Board (CAB). The CAB heavily regulated the
industry, setting restrictions on fares, routes, and entry into
the market. In other words, the government played a significant
role in choosing which airlines could fly, where they could
fly, and what prices they could charge. This system was
severely flawed, highly ineffective, and protected the existing
carriers at the expense of promoting competition.
Recognizing these flaws, Congress passed the Airline
Deregulation Act, which phased out the old system and allowed
airlines to freely compete. This deregulation transformed the
market into what we see today. Unshackled by government
regulation, what we saw over time was intense competitive
pressure that pushed prices down and consumer choice up.
That pressure also led to a significant number of mergers,
acquisitions, and bankruptcies. Between 1978-2005, for example,
162 airlines filed for bankruptcy. Today's airline industry,
while certainly more accessible and more competitive, is also
more concentrated than ever before. The Big Four air carriers,
American, United, Delta, and Southwest, control nearly 80
percent of domestic airline travel. While the Airline
Deregulation Act freed the airlines from the decrees of
government boards, the government still occupies a major role
in commercial aviation that often benefits the incumbents at
the expense of new entrants.
For example, at seven of the Nation's busiest airports, the
Federal Aviation Administration, or the FAA, controls or
distributes access to takeoffs and landings through what's
known as a slot system.
Slot allocations are highly sought after, particularly for
new entrants. An example--at London's Heathrow, for example, a
single slot allocated sold for tens of millions of dollars. The
FAA cannot auction these slots, instead distributing them
largely to incumbent carriers who own them in perpetuity
through what's known as the grandfather rights.
Many of these slots' allocations also tend to be awarded to
air carriers with existing infrastructure, such as gate access.
At DCA and Chicago O'Hare, for example, slot allocations
heavily favor American and United, who operate main hubs. At
other major airports, such as Atlanta and Dallas-Fort Worth,
legacy carriers control over 70 percent of the existing gates.
Lease agreements for these gates are often long-term and
can last for decades. For example, in 2016, Delta signed a 20-
year lease agreement with the city of Atlanta for its airport.
That lease agreement also stipulated that the city of Atlanta
could not operate a second airport. These agreements create a
significant barrier to entry for competitors seeking to gain a
foothold at major airports. If a competitor can't access a
gate, it can't compete for a slot.
Airports are also limited by government regulations that
make expanding difficult. To build new runways or terminals,
airports must submit environmental reviews to the FAA. This
process can easily be weaponized to delay airport construction.
Across the country, environmental activists file lawsuits using
the National Environmental Policy Act to delay these new
projects. These regulations act as a constraint, which in turn
limits the airline's ability to expand and compete.
Finally, like domestic ocean shipping, the United States
reserved domestic air transportation only to its U.S. air
carriers. This practice, known as cabotage, creates significant
tension between protecting our domestic airlines and promoting
competition.
As these examples show, the government is still heavily
involved in the airline industry.
Consumers deserve a system where airlines compete freely
and can innovate and grow, not a system where the government
consistently puts its thumb on the scale to foreclose
competition.
The government-imposed barriers destroy competition,
leaving consumers worse off. The most recent example of this
was the proposed Spirit-JetBlue merger. In 2023, the Biden-
Harris DOJ sued to block the proposed $3.8 billion merger. The
DOJ claimed the merger would remove Spirit from the market and
reduce competition. At the time, the proposed merger would have
created the fifth largest airline domestically with 10 percent
market share and increased competition against the Big Four.
However, one year later, a Federal judge in Massachusetts sided
with the DOJ and blocked the deal.
Spirit later filed for bankruptcy twice and ultimately
shutdown operations in May of this year. The blocked merger of
Spirit-JetBlue offers a cautionary tale about government
overregulation. By blocking the transaction, regulators
prevented the market from testing whether a strong competitor
could emerge to challenge the industry's largest incumbents.
At a minimum, the case demonstrates the importance of
ensuring that antitrust enforcement promotes competition rather
than merely preserving the status quo. As Congress evaluates
the future of the airline industry, we should remain mindful of
the lessons of deregulation. Competition, not heavy-handed
regulation, has been the primary driver of lower fares, greater
consumer choice, and increased innovation.
In the words of the Airline Deregulation Act, the airline
industry needs a maximum reliance on competitive market forces.
Our goal should be to remove unnecessary barriers to entry,
encourage robust competition, and ensure that consumers, not
regulators, are the ultimate beneficiaries of airline policy. I
look forward to today's discussion.
I now recognize Ms. Balint for an opening statement.
Ms. Balint. Thank you, Mr. Chair. Good morning.
Clearly, we could not see things more differently. It's no
secret that flying has gotten worse over the years. Tickets
cost more, more flights are canceled, and everything from seat
selection to carry-ons are now perks that you get to pay for.
This is the predictable result of a market that has been
allowed to consolidate for over 60 years, and an administration
that continues to prioritize the demands of huge corporations
at the cost of everyday Americans.
Americans were promised that consolidation would produce a
more reliable, efficient, and affordable aviation system. It
has done the opposite. Flyers face new and rising fees, fewer
alternatives, no bargaining power, and increasing barriers to
affordable travel.
In 1960, before deregulation, Americans had 40 major
airline carriers to choose from. Today, just four airlines
control over two-thirds of the domestic passenger market. We
went from 40 to four. That is not competition.
At the same time, airline executives argue that further
consolidation is necessary to address the industry's
challenges. It was shocking to hear United Airlines, the fourth
largest airline in the U.S., float a merger with American
Airlines, the second largest carrier. The combined United
American Airline would control 34 percent of the domestic
market. Transportation Secretary Sean Duffy called the
proposal, quote, ``interesting.''
This is alarming. We need to get back to antitrust
enforcement on the merits. For instance, in 2024, Democrats
blocked the Spirit-JetBlue merger because evidence showed it
would raise fares by up to 40 percent on dozens of routes. We
knew it would cause harm to consumers who could at least afford
it. Even a Reagan-appointed Federal judge agreed. Spirit is
gone now, not because of antitrust enforcement. Spirit is gone
because of the massive spike in jet fuel costs that are a
direct result of President Trump's unconstitutional war with
Iran. Even the Spirit CEO said that fuel prices were the
biggest factor in closing the airline.
President Trump's war of choice has made it all worse. Jet
fuel prices have roughly doubled since the beginning of this
war. Airlines are passing that burden directly down to
passengers through higher fares, more fees, and new fuel
surcharges. Americans never agreed to this war, and that's why
I introduced a war powers resolution to end it, because
Congress, not the President, has the constitutional authority
to take this country into a military conflict. This
unauthorized, uncalled-for war is causing a rolling series of
financial blows to Americans across this country.
Americans have spent nearly $450 more on fuel-related
expenses just since February. At the grocery store, food prices
have gone up more than three percent since last year. At the
airport, fares are up more than 20 percent in just four months.
It's the same shock to the system over and over, coming from
every direction.
For a country our size, flying is not a perk. It is how
families see each other. It's how small business owners reach
their customers. It's how a Vermont student gets home from
college. When the cost of flying goes up, it does not just
inconvenience people; it cuts them off from what has become a
necessity in this country.
Instead of addressing this rapidly consolidating industry
that is squeezing consumers, this administration has spent the
last year pandering to the interests of their wealthy friends.
The Biden Department of Transportation required airlines to
provide cash refunds when customers were owed. Airlines had to
disclose all fees upfront. Those policies were rolled back by
the Trump DOT. These rules were estimated to save consumers
more than half a billion dollars a year. Major airlines and
their trade associations spent millions lobbying this
administration the first nine years--excuse me--the first nine
months of 2025 to get these key consumer protections cut. It's
no surprise that the current Transportation Secretary, Sean
Duffy, was an airline lobbyist before he took his current job.
Members of Congress have pushed for an investigation into
whether Duffy continues to improperly favor the interests of
the industry that he used to represent.
Working families across this country deserve so much better
than this. Antitrust laws are supposed to make sure the markets
work for us. Americans need to know that antitrust enforcement
decisions will be based on law, evidence, and the interests of
regular people, not political access, backroom discussions, or
the preferences of powerful corporations. Americans simply want
choices. We don't want a handful of companies to control and
limit our freedom of choice, and we don't want a Federal
Government that approves consolidation because its corporate
and political allies want it to.
They are the reasons why I will not stop stressing the
importance of good rule of law antitrust enforcement, and I
will keep pressing the current administration on their
perversion of this critical tool for consumer protection.
Thank you, and I yield back.
Mr. Fitzgerald. The gentlelady yields back. While we wait
for Chair Jordan to arrive, I will now recognize the Ranking
Member of the Full Committee, Mr. Raskin, for his opening
statement.
Mr. Raskin. Thank you, Mr. Chair, and thanks to all our
witnesses for joining us today.
Spirit Airlines was once the Nation's leading ultra low-
cost carrier and one of the strongest forces in the economy,
holding down ticket prices for consumers. It's now collapsed.
We cannot have a serious conversation about the demise of
Spirit without talking about the obvious main culprit: The
President's disastrous and illegal war in Iran. The Iran war
has not only cost the lives of 13 American service members and
thousands of Iranian civilians, including hundreds of children,
it has cost American taxpayers more than $100 billion, and it's
cost American consumers more than $60 billion in increased fuel
costs alone, which averages to more than $470 per American
household.
It also caused the cost of jet fuel to double overnight,
forcing Spirit to take on an extra $100 million in unexpected
costs in just a couple of months. For an ultra-low-cost carrier
like Spirit which operates on thin margins to deliver the best
value to customers, that was a corporate death sentence. As
Spirit Airlines explained in its legal filings, the company
went under because, quote, ``recent geopolitical events have
resulted in a massive and sustained increase in fuel prices.''
Desperate to avoid any mention of Donald Trump's calamitous
and historic blunder in Iran, which has split the Republican
party, my colleagues today have decided instead, somewhat
comically, to blame overzealous antitrust enforcement.
Americans are paying more today for groceries, gasoline,
healthcare, housing, utilities, and, yes, airfare. At the same
time, a vanishingly small number of companies is thriving.
Consider the S&P 500, a stock market index of 500 publicly
traded U.S. companies. Last month, The Financial Times
published an analysis showing that just five of those 500
companies, or one percent, accounted for 50 percent of the
growth of the index.
In the airline industry, the story of lopsided growth and
economic concentration is the same. In 2000, the four largest
carriers controlled roughly 60 percent of domestic traffic.
Today they control about 80 percent.
One merger after another has consolidated the market power
of the four major airlines: American, Delta, Southwest, and
United.
The result: Higher prices, lower wages, and growing
profits. Protecting competition requires regulators willing to
say ``no'' to corporate consolidation.
In 2023, the DOJ blocked JetBlue's attempted acquisition of
Spirit.
The result: Spirit continued to operate as an ultra-low-
cost airline, offering consumers lower prices than competitor
airlines, and driving down the price of tickets on competitors.
The Economists called this, quote, ``the Spirit effect.''
When an ultra-low-cost airline like Spirit operates a route,
the price of tickets on legacy carriers, like American, drops
by an average of 21 percent. As Judge Young, the Reagan-
appointed judge who upheld the DOJ decision to block the
Spirit-JetBlue merger, explained, quote,
If JetBlue were permitted to gobble up Spirit, at least as
proposed, it would eliminate one of the airline industry's few
primary competitors that provides unique innovation and price
discipline. It would further consolidate an oligopoly by
immediately doubling JetBlue's stakeholder size in the
industry. Worse yet, the merger would likely incentivize
JetBlue further to abandon its routes as a maverick, low-cost
carrier.
The DOJ's actions in 2023 protected consumers from
increased costs by focusing airlines to continue competing with
Spirit and its ultra-low airfares until skyrocketing prices
caused by Trump's disastrous war in Iran caused the airline to
collapse. Yet, our colleagues have taken the wrong lesson from
this story, claiming we need less antitrust enforcement rather
than more.
This is alarming because under the Trump Administration,
antitrust enforcement has already been twisted and corrupted
beyond recognition. Instead of being a tool to protect
competition and innovation and to prevent companies from
abusing their market power over consumers and workers, it's
become just one more grift perpetrated by the President and his
enablers for their own purposes of wealth maximization.
Antitrust practitioners talk about the Trump transaction tax,
the recognition that merger approval depends less on objective
considerations and competition factors and more on a company's
willingness to curry subjective political and financial favor
with the President and the money-making operation being
conducted at the White House.
The warning signs of gangster State crony capitalism are
everywhere. In the last 12 months, this administration has
cleared the Nexstar-Tegna local broadcast merger which will
undermine the diversity of independently owned news operations
and which a coalition of State AGs has already obtained a
preliminary injunction to halt.
It has settled the Live Nation Ticketmaster case with terms
so favorable to Live Nation that the basic sweeping harms to
artists, venues, and millions of fans remain largely
unaddressed. It cleared the Paramount Skydance Warner Brothers
discovery deal before career investigators had even completed
their antitrust analysis. Every senior antitrust official who
has cried foul over this pattern of concentration, including
Assistant Attorney General Gail Slater at Department of
Justice, and her principal Deputy Attorney General, Roger
Alford, has been pushed out or fired for the offense of simply
doing their jobs, the jobs they signed up to do and which the
law requires of them.
The consequences of this anti-antitrust corruption and
promono-
poly favoritism are simple: Corporations pass the Trump tax
onto consumers. We pay higher prices for fewer choices, less
competition, less innovation, and more instability. Instead of
concocting a cover story for the President, which blames Biden
for the disastrous consequences of the Trump tariff and the
Trump war in Iran, we should be doing serious oversight of an
antitrust enforcement system that has been thoroughly smashed
up in this administration.
Thank you, Mr. Chair. I yield back.
Mr. Fitzgerald. The gentleman yields back. Without
objection, all other opening statements will be included in the
record.
We will now introduce today's witnesses.
The Honorable Chris Sununu. Mr. Sununu is the President and
CEO of Airlines for America, a trade association of U.S.-based
passenger and cargo airlines. He previously served as the
Governor of New Hampshire and as a member of the Executive
Council of New Hampshire, and worked as an environmental
engineer.
Mr. Timothy Ravich. Mr. Ravich is a Senior Counsel at
Tressler where his practice focuses on aviation, aerospace,
airport, and commercial litigation. He previously was the
General Counsel of an unmanned aerial systems company, has led
research on matters affecting air space operations and safety
for the National Science Foundation, and the National Academies
of Science, Engineering, and Medicine, and is an author of an
aviation law textbook.
Mr. Christian Stout. Mr. Stout is Director of Innovation
Policy at the International Center for Law and Economics, where
his work focuses on competition, telecommunications, and
artificial intelligence policy. He previously worked as an
attorney, taught computer science at Rutgers University, and
held various roles at technology companies.
Professor Nancy Rose. Ms. Rose is the Charles P.
Kindleberger Professor of Applied Economics at the
Massachusetts Institute of Technology. She previously served as
the Deputy Assistant Attorney General for economic analysis in
the DOJ's antitrust division from 2014-2016.
We welcome our witnesses and thank them for appearing
today. We will be swearing you in at this point. Would you
please rise and raise your right hand.
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and correct to the best
of your knowledge, information, and belief, so help you God?
Let the record reflect that the witnesses have answered in
the affirmative. Thank you. Please be seated.
Please know that your written testimony will be entered
into the record in its entirety. Accordingly, we ask that you
summarize your testimony in five minutes.
Governor Sununu, you may begin.
STATEMENT OF THE HON. CHRISTOPHER T. SUNUNU
Mr. Sununu. Well, good morning. Thank you very much. Great
to see everybody. Chair Fitzgerald, Ranking Member Balint, and
the Members of the Subcommittee. I see Chair Jordan has joined
us as well.
My name is Chris Sununu. I am currently the President and
CEO of Airlines for America. Thank you for inviting me today to
testify on behalf of the airline industry, a sector that does
support millions of U.S. jobs and drives five percent of our
country's GDP.
When examining the State of the airline industry, the
defining story over the past two decades is the extensive
expansion of consumer choice and travel options that continues
despite significant headwinds that industry has faced,
particularly over the last eight months.
First, we were hit hard by two record-long government-
driven shutdowns, which cost the airlines billions and the
broader economy billions more, forced flight delays and
cancellations, all over political fights that have absolutely
nothing to do with our industry and hurt the American traveler.
Also, the increase in jet fuel prices due to the closure of the
Strait of Hormuz means that airlines will take an additional
financial hit of more than $8 billion this year. It is
aggressive competition that prevents airlines from passing all
those costs onto the consumers.
Despite these hurdles, the airline industry remains a
highly dynamic marketplace where travelers enjoy a suite of
fare options and unprecedented flexibility in how they choose
to fly.
A major catalyst for this variety has been the dramatic
expansion of airline business models. Twenty-five years ago, 60
percent of domestic passengers had access to low- and lower-
cost carriers. These days that has soared to 90 percent. Today,
the average number of competitors on domestic routes, it sits
at an all-time high with nearly half of all passengers
traveling in markets with four or more airline choices. That
range of options has never before existed for the American
traveler. It does today. At a time when Americans have spent
the last several years facing runaway inflation on basic
household goods, competitive airline pricing has bucked that
trend. Between 2019-2025, everyday consumer products rose by 26
percent, domestic airfares fell 3\1/2\ percent.
Travelers are no longer forced into a one-size-fits-all
ticket. They have the freedom to customize their journey and
pay only for the services that they value. The number of
Americans flying is greater than ever before. In the 1970s,
about one in five Americans took a flight on any given year.
Today it's about one in two. Airlines continue to prove
themselves as an affordability success story for the American
public.
The best part is that according to the April 2026 ASCI
survey, airlines are doing all of this with all-time high in
customer satisfaction. The recent Spirit Airlines bankruptcy,
as unfortunate as that was, was just the first airline
bankruptcy in the past 13 years, indicating stability for both
our workforce and networks. Airlines have actively used that
stability to reinvest over $24 billion annually every year back
into that customer experience. The people, the product, and the
planes.
The upgraded products we invest in include everything from
upgraded WiFi and apps that give more control to the customer
to better airports, better food, and faster TSA screening. The
list goes on and on in terms of customer experience.
Most importantly, airlines have invested in their people,
doubling the average wages and benefits since 2025, far
outpacing most any other industry in this country.
Now, given this robust State of competition, it's clear
that the biggest threat to healthy and competitive airline
industry is our short-staffed and woefully antiquated air
traffic control system. Policymakers can enhance competition
not by overregulating an already very competitive industry, but
by focusing on building a new air traffic control system that
will be safer, allow for more flights, and increase choice for
the consumer. Congress must build on its $12.5 billion down
payment toward air traffic control modernization with the next
round of funding to ensure that technology gaps that have been
completely ignored for the last 30 years that they are finally
get addressed.
Air traffic modernization is one of the few policies that
enjoys bipartisan, bicameral support as well as the support of
the nearly 60-member Modern Skies Coalition, consisting of
stakeholder organizations across the entire country. The
American traveler needs Congress to support policies that allow
this competitive marketplace to thrive, prevents additional
cost to the consumers, and ensures we continue to invest in the
safest airspace in the world. Thank you very much. I look
forward to the questions.
[The prepared statement of Mr. Sununu follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Fitzgerald. Thank you, Governor. Mr. Ravich, we now go
to you for your five minutes.
STATEMENT OF TIMOTHY M. RAVICH
Mr. Ravich. Good morning, Chair Fitzgerald, Ranking Member
Balint, and the Members of the Subcommittee. Thank you for the
invitation and the privilege to speak with you today.
As you heard from the kind introduction, my name is Tim
Ravich. I'm a Florida bar, board-certified lawyer working
currently with Tressler, LLP, which is a law firm in Chicago.
President Reagan once said that the nine most terrifying
words in the English language are ``I'm from the government,
and I'm here to help.'' Yet, one of the most important
deregulatory reforms in American history was championed by
Senator Edward Kennedy during the Ford Administration and
signed into law by President Jimmy Carter.
Airline deregulation was a bipartisan effort. That spirit
remains relevant today. We might agree that not every market
shortcoming requires a regulatory intervention. Regulation
provides benefits. It also carries costs. Aviation depends on
both competition and regulation. The title of today's hearing,
``The 30,000 Foot View: Competition and Regulation in the U.S.
Airline Industry,'' makes this point well. Every day, millions
of passengers and tons of cargo travel around the United States
safely and efficiently.
The overwhelming majority of trips occur without incident.
The success is easy to overlook. In the nearly 50 years since
enactment of the Airline Deregulation Act, passenger traffic
has increased exponentially. Airfares has declined. Air travel
is available to far more Americans than it was before
deregulation.
During the Senate hearings on airline deregulation decades
ago, Senator Kennedy recalled an East Boston constituent who
asked why he was holding the hearings about airlines when he
had never been able to afford to fly. Kennedy replied, quote,
``That's why I'm holding the hearings.''
I often think of that story when I teach aviation law. At
the start of each semester, I ask my students whether they have
ever flown on a commercial airline. Every hand goes up. In
fact, it may be the only time all semester that happens, but
many seem surprised by the question itself. Of course they have
flown. That reaction says a great deal about how much aviation
has changed over the last half-century and how competition has
expanded access to air transportation for millions of
Americans.
As titled, this hearing focuses on the right issue: When is
regulation necessary versus when markets should work freely.
The competition questions today are different from those
Congress confronted in 1978. Competition today is often shaped
less by fares and routes than by access, capacity, market
concentration, and mergers. These issues deserve attention.
Many competition decisions in commercial aviation occur not in
the air, but on the ground at airports. A carrier cannot
compete without access. Access to gates matters, access to
terminal matters and infrastructure matters. Competition also
requires capacity. No airline can compete with a flight it
cannot schedule, and no new entrant can compete without access
to gates, terminals, and airport infrastructure.
The same is true in the National Airspace System. Airlines
can only compete through flights they are able to schedule and
operate. Discussions about air traffic control modernization
and capacity are, therefore, also discussions about
competition. Recent litigation involving the proposed
acquisition of Spirit Airlines by JetBlue Airways illustrates
another challenge: Competition policy often requires regulators
and courts to predict future markets and future competitors.
Those predictions are not always easy. As we approach the 50th
anniversary of the Airline Deregulation Act, the central
question before this body is whether and how regulatory law can
best encourage competition, innovation, and new entry.
That question extends beyond today's airline industry.
Drones are here. Flying taxis, referred to as advanced air
mobility, are on the horizon. Commercial space transportation
is a reality. The issues we will discuss today--access,
competition, infrastructure, resource allocation, and yes,
regulation--will influence and are precedential as our Nation
explores the next frontiers in transportation. I look forward
to discussing these matters and answering the Subcommittee's
questions. Thank you.
[The prepared statement of Mr. Ravich follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Fitzgerald. Thank you, Mr. Ravich. Mr. Stout, you may
begin.
STATEMENT OF KRISTIAN STOUT
Mr. Stout. Chair, Ranking Member, and the Members of the
Subcommittee, good morning. Thank you for having me. I am the
Director of Innovation Policy at the International Center for
Law and Economics, and my work focuses on how law and
regulation shapes competition.
I have filed a longer written statement, so let me make one
central point and give three examples.
My central point is this: Many of the most important
barriers to airline competition arise from policy choices, not
from the airlines themselves. The most procompetitive things
Congress can do is to clear policy bottlenecks, not pile on new
ones.
The first example is Spirit. In January 2024, a Federal
court blocked the JetBlue-Spirit merger to protect competition.
The government won the case, and then it lost the carrier.
Spirit went bankrupt twice and shut down this May, a 34-year-
old airline gone, and with it, the Spirit effect, the downward
pressure its low fares put on every competitor in the market.
I am not here to say the Justice Department killed Spirit
by itself. An engine inspection crisis, high-fuel costs, and
the big carriers copying Spirit's product all played a part as
well. The point is narrower. The legal framework was too static
for a visibly fragile firm in a capital-intensive industry, and
it failed in two ways that are worth your attention.
First, the court itself found that a stronger JetBlue would
have competed harder against the Big Four carriers that fly
most Americans, a benefit to the broad flying public. Under the
old any-market analysis of cases like Philadelphia National
Bank and Topco, harm to the most price-sensitive travelers on a
handful of routes control the entire outcome, no matter how
large the nationwide benefit. The court blocked a merger it
appeared to be regarded as good for competition overall, to
preserve route-level rivalry, the market then itself erased.
Second, the failing firm defense asks a yes-or-no question:
Is the company about to collapse with no possible buyer? Spirit
could not meet that strict test in early 2024, so the court
treated it as a healthy, durable competitor that would keep
disciplining fares indefinitely. Eighteen months later, it was
liquidated. That is the flaw. In a capital-intensive industry,
shock-prone, the real question is not whether a carrier has
already failed, but how likely it is to still be competing in
five or 10 years from now. Merger analysis for network
industries needs a probability-weighted view of a firm's
durability and consistent credit for out-of-market benefits.
My second example is airport slots. At the most congested
airports, the FAA rations every takeoff and landing through
slots. Decades ago, those slots were handed to incumbent
carriers for free and locked in by grandfather rights. They
function as property in a sense; bought, sold, and pledged as
collateral worth tens of millions of dollars. Yet, a new
airline cannot simply decide to add service, and use-it-or-
lose-it rules push carriers to fly near-empty ghost flights
just to keep their slots. Where low-fare entry is actually
allowed, fares fall about 17 percent. The FAA already waives
these rules at times, so it plainly has the power to move
toward real slot markets.
My third example is the accumulation of consumer protection
mandates. Let me be clear. First, I am not against protecting
consumers. Airlines run on operational flexibility; the freedom
to cancel, swap aircraft, rebook passengers when weather and
mechanical problems hit. Every mandate that turns a judgment
call into a legal obligation converts a manageable risk into a
fixed cost. A wave of recent rules, like automatic cash refunds
and proposed European-style compensation regime, free family
seating, new fee disclosure requirements--each of these hits
hardest at the unbundled ancillary revenue model that lets
budget carriers like Spirit operate flexibly.
For a legacy airline like United or American, any one of
these is a friction. For an ultra-low-cost carrier on razor-
thin margins, the pileup of these mandates can become fatal.
The Fifth Circuit has already held that one of these rules
likely exceeds the Department's legal authority, a question
squarely within the Subcommittee's jurisdiction.
My recommendations come down to discipline and humility.
Modernize merger analysis for network industries, open
underused slots to new entrants, and put every operational
mandate through rigorous cost-benefit review tied to a real,
demonstrated problem. The competition we are missing in
industry is mostly foreclosed upstream by runways that the
government rations, by capital that it walls off, and by
mandates that fall hardest on the carriers least able to bear
them. Spirit's empty gates are a reminder that preserving a
competitor on paper is no substitute for letting competition
work in fact.
Thank you. I look forward to your questions.
[The prepared statement of Mr. Stout follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Fitzgerald. Thank you, Mr. Stout. We now recognize
Professor Rose.
STATEMENT OF NANCY L. ROSE
Ms. Rose. Chair, Ranking Members, and the Members of the
Subcommittee, thank you for inviting me to testify. I've spent
40 years studying competition, antitrust, and regulation,
including in the airline industry, and have served as the
Deputy Assistant Attorney General for economic analysis in the
antitrust division. I'd like to make three points, drawing from
my written testimony today.
First, antitrust did not kill Spirit Airlines. Let me say
that again because I think you've heard the opposite alleged.
Antitrust did not kill Spirit. Spirit's own leadership, as
you've heard, identified the cause as sudden, sustained spike
in jet fuel prices due to the Iran war that added hundreds of
millions of dollars in costs.
Instead, antitrust kept Spirit flying two years longer than
if JetBlue had been allowed to complete its merger and
eliminate Spirit's consumer-friendly pricing. That mattered not
only to Spirit passengers, but to everyone who flies. Spirit,
as you've heard, pioneered the ultra-low-cost carrier model in
this country, and its presence on the route forced other
airlines to lower their fares, often by 10-20 percent or more,
what's been called the Spirit effect.
For many travelers, Spirit was not a preference, it was the
only air travel they could afford. As one Spirit customer
recently put it, ``We don't fly Spirit because we're cheap. We
fly Spirit because we're broke.'' JetBlue never intended to
preserve that model. Its own deal modeling removed seats,
repainted the planes, and increased fares by 30 percent.
As you've heard, after hearing that evidence, Judge Young
found Spirit to be a uniquely disruptive competitor important
to a particular segment of cost-conscious customers, and he
blocked the deal. That was not overreach. That was the Clayton
Act working as Congress intended.
Nor was this a failing firm case. The parties did not mount
that defense at trial. Spirit's executives testified that the
company had a plan to return to profitability. It's difficult
to predict the future, but they had a plan. There had been
another bidder, Frontier, that management preferred because it
recognized that Frontier would preserve the ultra-low-cost
carrier model without the antitrust risk that JetBlue's offer
presented.
When people argued that DOJ should have waived the deal
through because Spirit was failing or flailing, we need to
recognize the danger in that argument. It would encourage
stronger rivals to rough up competitors and buy them out,
precisely when consumers most need those competitors to
survive.
Second, this is not just about airlines. Competition
concerns in the airline industry are a window into a much
larger problem. Across the economy, consolidation has often
left families with fewer choices and higher prices. Four firms
dominate cattle buying in the U.S., leaving many ranchers with
only a handful of buyers and Fourth of July hosts paying more
for the burgers that they're grilling. Three pharmacy benefit
managers control nearly 80 percent of U.S. prescriptions. Their
integration with insurers and pharmacies has forced higher
prices throughout the system. Hospital systems have merged and
then bought up physician practices, and recent research finds
that those acquisitions raise physician prices by 15 percent
with no clear improvement in quality.
These are pocketbook issues, what families pay for
groceries, medicine, or doctors' visit. Strong, evidence-based
antitrust enforcement is one of the tools that we have to keep
competition and prices affordable, as did the FTC and a
bipartisan group of State AGs when they successfully blocked
the Kroger-Albertsons supermarket merger.
Third, antitrust must remain vigilant and independent. When
I was at the antitrust division, every new employee heard the
same message on day one and repeated often: Antitrust is law
enforcement. We call balls and strikes based on the evidence,
not on personal preferences, political pressure, or who has
access in Washington. That principle has been under strain. In
the last year, we've seen a very troubling pattern: Senior
antitrust officials fired after privately objecting to an
inadequate settlement forced from above, the President
personally weighing in to support a media merger, a
monopolization case against Live Nation secretly settled mid-
trial by senior DOJ officials and White House counsel on terms
so favorable that Live Nation's share priced popped six percent
on the announcement.
Fortunately, in that case, Attorney Generals from 33 States
and the district leapt in to assume the litigation lead and
kept the trial moving forward to a jury that found for the
plaintiffs on every claim.
From the outside, it looks like there's a ``Justice for
Sale'' sign hanging on the fifth floor of the RFK building.
That should alarm us all, regardless of our party or our
ideology. When companies believe that they can buy an outcome
in Washington instead of competing on the merits, we all lose.
When antitrust becomes a tool of political favor or disfavor,
the predictable environment that businesses need to invest is
undermined.
Surely, we can find bipartisan support for rigorous,
evidence-based, politically independent antitrust enforcement
that protects the American consumer, the American worker,
honest businesses, and the competitive process itself.
[The prepared statement of Ms. Rose follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Fitzgerald. Thank you, Professor. We'll now proceed
under the five-minute rule with questions. I first recognize
the gentleman from California, Mr. Issa, for five minutes.
Mr. Issa. Thank you, Mr. Chair. Professor Rose,
notwithstanding those political comments you made at the end of
your opening statement, as a professor, would you say that the
No. 1 challenge that creates an antitrust situation is not lack
of competition, but is the, in fact, barrier to entry? In other
words, if someone begins to assert some benefit from a monopoly
or near monopoly, it is, in fact, the barrier to entry that
keeps others from coming in, whatever that barrier is. Is that
a basic principle of economics and antitrust?
Ms. Rose. I teach my students that there are three--
Mr. Issa. Ma'am, that was a yes or no, if you don't mind.
Ms. Rose. Oh. Then no.
Mr. Issa. Oh. OK.
Mr. Stout, I'm going to go for a differing opinion. The
fact that Spirit's gates are all being sold off to competitors
is that, in fact, by definition, as great or greater a barrier
to entry than, in fact, the consolidation under the previously
asked for one or the other mergers would have been? Meaning
that the gates that were not shared, the gates that were
expanded, the ability of--we'll just take JetBlue as the
example. Those gates were a major factor--not the aircraft, not
the pilots, all of which are important, but ultimately, access
to routes, bases, and operations, in fact, are sometimes the
hardest to get at the most desirable airports. Isn't that true?
Mr. Stout. From my understanding, that's correct.
Mr. Issa. As we're looking at antitrust relative to
aviation, and I'm going to go to the Governor in a moment, we
are looking at whether the opportunity for competition is
there, every bit as much as the professor's narrow theory that
an entity that was losing money because they said we'd like to
turn around, we hope to turn around, we have a plan to turn
around, somehow was a perfectly good reason to take a money-
losing airline and not sell it to an airline that might, in the
combination, make money.
Mr. Stout. Your question is allowing competitors to enter,
would that have helped offset some of the concerns about that
transaction? Is that correct?
Mr. Issa. Correct.
Mr. Stout. I believe that's correct.
Mr. Issa. Second, in your opening statement, you said
something that was very profound. Everytime we in Washington or
our agencies create new rules, new nice-to-have, socially
interesting, and responsible rules, we do not disfavor the
large airlines. We, in fact, hurt the very entities like Spirit
that want to offer a low budget and do not necessarily have the
means of a United or American. Is that correct?
Mr. Stout. Yes. I believe that is correct.
Mr. Issa. Thank you. Governor, welcome. For more than 12
years, you led a State successfully. You're now looking at a
myriad of companies that are struggling against international
competition. Now, this is an antitrust hearing, and we will
focus on that more than anything else today. If, in fact, the
relevant market are the domestic airlines, the four plus a
plethora of smaller airlines, and we ignore global giants,
including ones backed by their governments, do we, in fact,
almost guarantee the demise of the U.S.-based airline industry
as we know it?
Mr. Sununu. Absolutely have to keep in mind that when you
look at the worldwide market, you have so many actors out there
that are State sponsored, they're State supported, State
subsidized, and they aren't free markets. Again, to ignore that
fact on a competitive basis would definitely be to our demise.
We are competing against entire governments--as individual
airlines, we are effectively competing against the financial
wherewithal of entire governments.
Mr. Issa. Now, I'm going to touch on the same subject that
I didn't get the answer I wanted from the professor on. If we,
the Federal Government, use our ability to lean into expanding
routes, modernization, and places to put the aircraft when
they're on the ground, if we modernize that and make more of
them available, will we inherently give an ability for entrants
to new and competitive airlines?
Mr. Sununu. Absolutely. I think Breeze is a good example. I
don't represent Breeze, but Breeze is a fairly new airline
opening up at gates that might not be traditional airports.
Gate access and slot access and competition there is very
important.
Mr. Issa. Thank you. Mr. Stout, with the remaining time,
should this Committee look at referring to the other Committees
of jurisdiction the idea that we do lean into that, and we also
look at the barriers created by overregulation, maybe even a
two-tier system to allow smaller airlines to waive those large
mandates?
Mr. Stout. I think that's right. If we find ways to
introduce markets into slot access, that we could have a lot of
procompetitive benefits.
Mr. Issa. Thank you. I yield back.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the Ranking Member of the Full Committee, Mr. Raskin again, for
five minutes.
Mr. Raskin. Mr. Chair, thanks much. Professor Rose, as a
professor, you give grades, right?
Ms. Rose. I do.
Mr. Raskin. What grade would you give the antitrust
enforcers in the Trump Administration today?
Ms. Rose. I would have to fail them.
Mr. Raskin. What letter grade would that be?
Ms. Rose. ``F.''
Mr. Raskin. Give them an ``F''?
Ms. Rose. I do. I don't give that very often at MIT, but in
this case, I think it's fully merited.
Mr. Raskin. What's your justification for that?
Ms. Rose. That we no longer have an antitrust enforcement
agency at the Department of Justice that's based on principles
of evidence. It seems, instead, to be based on principles of
either who has the Administration's ear or their willingness to
pay.
Mr. Raskin. It's a game of political influence rather than
objective economic factors.
Ms. Rose. As an outsider, it appears to be the case.
Mr. Raskin. I saw an article a couple days ago in The Wall
Street Journal titled, ``They can't fly Spirit anymore so
they're taking the bus instead.'' It reported that Greyhound
and other bus services saw passenger traffic increase 30
percent on the 130 routes that they had shared with Spirit.
What does that surge in bus travel say about the importance
that Spirit Airlines had for air travel?
Ms. Rose. That's exactly what I alluded to in my testimony,
that Spirit was really focused in this model of stripping down
fares to be the lowest possible. Other airlines, while they're
making inroads into that, do not have the same impact. Many
passengers who flew on Spirit could not afford the higher fares
at other airlines. As a consequence, they're either not flying
or not making the trip.
Mr. Raskin. Are you basically saying that the combination
of terribly foolish policy decisions, like the unilateral
illegal tariff war against the world and the unilateral illegal
war in Iran, with the consequent jump in oil and gasoline
prices, combined with weak antitrust enforcement, is causing
this massive consolidation within the business economy?
Ms. Rose. It's definitely contributing to it.
Mr. Raskin. What are some of the problems associated with
high levels of concentration and consolidation?
Ms. Rose. Particularly, when consolidation or concentration
happens because you're buying up your competitors, you tend to
see higher prices, lower quality, less choice for consumers,
and I think that follows right through to pocketbook issues
that households are facing.
At the same time, you may see also workers have less
ability to compete for their services with employers. You can
also see wages going down and workers--
Mr. Raskin. Can you explain that a little bit further?
People understand why the diminished competition is terrible
for consumers, but how do workers in the industry suffer from
that kind of economic concentration?
Ms. Rose. Let's say we've got three employers right now
that are possible options for someone with my particular skill
set. If we allow a merger between two of those, now I've only
got two choices. The employers recognize that reduced
competition. They don't have to compete as hard to get me to
work for them. They don't have to pay me as much.
Mr. Raskin. The parties justified the merger is needed to
allow them to compete better with the Big Four airlines. Some
written testimony argues for antitrust giving these cross-
market efficiencies weight in making antitrust decisions. Can
you explain, in simple terms, what this is and whether or not
you support that analysis?
Ms. Rose. Yes. It's a backdoor way to reintroduce the
Borkian argument, the arguments Robert Bork made, which was to
try and broaden the spectrum so large, so wide, that you
couldn't really enforce the antitrust laws effectively.
What it's saying is, we might have some consumers who
benefit and some who are harmed by the merger. Instead of
recognizing that the antitrust laws say a merger is illegal if
it substantially reduces competition in any relevant market, we
should say, ``Well, don't worry about those consumers that are
being harmed. They're not able to pay very much for their
airfare anyway. They don't have very much income. They don't
have very much demand. Let's instead protect the business
travelers who would like to have the kind of expanded JetBlue
options.''
It's an argument you could make. It's not what our current
antitrust system says, and it would be an enormous mistake to
go to that.
Mr. Raskin. What would you say up until now the major
antitrust decisions have been by the Trump DOJ officials, who
you graded ``F,'' and what are the specific effects of those
decisions?
Ms. Rose. Well, we're seeing consolidation in media
markets, both--take Paramount-Skydance, which has just been
cleared, but also these local broadcast stations. That's going
to increase advertising rates. It's going to reduce the
diversity of views. It's going to make it more difficult for
local broadcasters to sustain newsrooms. That's going to be a
cost both in terms of the information that we have and in terms
of the people who work in that market, and in terms of people
who are looking to that for their news and their information
content.
In other markets, like the Ticketmaster--the Live Nation
Ticket-
master monopolization case, we're going to see continued abuse
of consumers and higher fees.
Mr. Fitzgerald. The gentleman's--
Mr. Raskin. Thank you, Mr. Chair.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the gentleman from North Carolina for five minutes.
Mr. Harris. Thank you, Mr. Chair, and I thank all of you on
the panel for being here today.
Governor Sununu, thank you for coming to testify today. I
want to take just a moment to talk about the past interactions
Congress has had with the airline industry. We've already
touched on it this morning that Congress passed the
Deregulation Act in 1978. The goal was free up the airline
industry from the burdensome, inefficient government boards
that dictated the fares, routes, and new entry to the market.
I'd really like to know, from your experience, how did the
Airline Deregulation Act change the way, in your mind, that the
airline industry is regulated? How did that deregulation really
benefit customers?
Mr. Sununu. Well, again, it opens up a true free market as
opposed to having the government decide what the fares are
going to be and who can have what routes. Free market
competition works, without a doubt. The proof in that is just
let's go to pricing. I'm a big believer that nothing shows
competition more than the price. In the late 1970s, let's call
it what it was. Basically, rich White people could fly on a
plane, right? Today, almost any American, through a variety of
different ways, can afford to fly from point A to point B. We
have ultra-low-cost carriers. We have multiple routes. We have
more competition if you want to go to--and that's the other
definition of competition that's very important here. It's not
just the overall number of carriers. When I go to buy a ticket,
oh, I have four, five, or six carriers going from Wichita to
Dallas. Now, they're all competing on that exact same route. We
have more competition per route than ever before. That is
allowed now, right? Because they can compete freely, and it's
not the government saying, ``Well, you're going to go here, and
you're going to go there.''
On pricing alone, it has been a game changer. On low-income
and everyday Americans, it's been an absolute game changer. On
the ability for the airlines themselves to create their own
models, one of the challenges I would say Spirit has--they had
a lot of challenges. There's a lot of reasons Spirit went
bankrupt. One of the challenges was some of the bigger carriers
said, ``we're going to compete.'' We're going to provide a
basic economy ticket that we didn't provide before at a very
low-cost level, and the government doesn't get involved in the
economics of that, to provide more options. It isn't just one
carrier for low-income families or folks that don't have the
money to spend for the extra frills. More carriers were
competing at a lower cost level. That's all because of the
deregulation opportunities that came from the late 1970s.
Mr. Harris. In that same vein, in what ways would you say--
I know part of this hearing is looking at when to regulate and
when not to regulate or deregulate. In what ways do you think
Congress maybe specifically could further deregulate the
airline industry to benefit consumers?
Mr. Sununu. One area where the airlines have taken a clear
position; first, the airlines do a lot for their customers,
right? They put over $1 billion of their own money into
compensation. They already have massive refund policies. Please
understand there's a big difference between a refund--your
flight didn't take off, you get your money back--and
compensation, which is like the punitive penalty. The airlines
and some of the regulatory proposals that we've seen in the
past basically said, ``We're going to penalize you for acts of
God. There's a huge weather storm. The plane didn't take off.
You now have to write not just a refund but compensation on top
of that.'' Right? An airline wanted to change their tail number
for a certain reason. Oh, that's a canceled flight. No, the
flight isn't canceled. We're just changing the tail number.
Nope. The previous administration said, ``No, that's going to
count against you as a''--so it's things that are out of our
control which then burden us which, ultimately, those costs
probably get passed down to the consumer.
That's been the hardest part. We're an industry that has an
average profit margin of 4\1/2\ percent. Virtually every dollar
the airlines make go back into airports and better products and
all that sort of thing. Additional regulations--right? Some
regulations have value. All regulations have cost. Right? You
have to understand that kind of the pros and the cons there,
and those costs, ultimately, unfortunately, would probably have
to go down a lot to the customers. More regulation can be very
burdensome for the customer in terms of cost.
Mr. Harris. Thank you, sir. Mr. Ravich, in my final minute
here, I want to touch base with you on this topic of cabotage,
if I may, and referring to the practice of a foreign air
carrier operating between two U.S. airports. Under current law,
I'm told the United States only allows for cabotage when
authorized by the Secretary of Transportation. How might
cabotage increase competition and benefit consumers, Mr.
Ravich?
Mr. Ravich. Congressman, thank you for the question.
Cabotage is a maritime term, the concept being that a
foreign carrier can operate domestically. British Airways could
fly from Tampa to Toledo or something. You would have
competition. You'd have more firms in the marketplace
potentially, perhaps an infusion of capital, and all the
competition that flows there from.
The issue, of course, is what's already been referred to,
which is how those carriers are subsidized or sponsored. There
are some national security concerns. It is something worthwhile
to at least explore and understand how you might get more firms
into the marketplace.
Mr. Harris. Very good. Thank you. With that, Mr. Chair, I
yield back.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the gentlewoman from Vermont for five minutes.
Ms. Balint. Thank you, Mr. Chair. I thank the witnesses for
your time today.
Professor Rose, in April, Transportation Secretary Duffy
said, quote, ``There is still room for mergers in the aviation
industry.'' I want to get your take on that. Do you agree with
that assessment? Still room for mergers?
Ms. Rose. There may be, but only in a very specific part of
the market. I do not anticipate that there is room--if you care
about competition--for the Big Four to be acquiring additional
carriers.
There could be an argument--the two of the smaller carriers
who don't have much overlap, have complementary networks, might
be stronger if they merged operations. That would have to be
something that you'd look at carefully at the evidence. I
wouldn't want to rule it in and out. It's very important that
you look at where there's room to merge, and I don't see that
at the top.
Ms. Balint. That's an important distinction. You have
touched on this, but just to make it really clear for my
constituents back home. From your perspective, what would be
the effects of further mergers in an industry that's already
incredibly consolidated?
Ms. Rose. We're just going to see higher prices. I want to
make this point that while it is true that airfares in real
terms have declined, we've seen dramatic reductions in airfares
over time due to some of the benefits of opening up
competition. That doesn't mean that the fares we're seeing
today are as low as they might have been had we not allowed the
industry to consolidate. There is interesting economic work
that's been done that suggests that the Big Four, in
particular, are behaving in a much more coordinated pricing,
live and let live fashion that's raising airfares on routes
that they compete on.
Ms. Balint. I share those concerns. I'm wondering if we
could turn for a moment about low-cost and ultra-low-cost
carriers, the ULCCs that people have talked about today.
There's research that argues that the presence of a ULCC in a
market or on a specific route decreases base fares by as much
as 20 percent. Earlier this year, there were press reports that
two ULCCs, Sun Country and Allegiant, may combine.
What effect do these ULCCs play in the market? How would
further consolidation among the ULCCs impact flyers across this
country?
Ms. Rose. Again, it depends on whether they're currently
competing or whether they have complimentary networks with not
much competition. If it's the latter, they could expand their
operations, maybe they operate more efficiently because of that
scale, and they could extend that benefit to more markets, that
would be great. It's important how they affect markets, they do
it two ways.
First, they offer consumers who buy tickets on their
flights much, much lower fares.
Second, as we mentioned before, they force incumbent
airlines on the routes that they enter to reduce their fares.
That's extending the benefits across a wide set of flyers, many
of whom would never have purchased a ticket on the--
Ms. Balint. I agree. I want to touch on how companies are
navigating the Trump Administration's antitrust approach as it
were. Antitrust defense lawyers are telling their clients they
should hire lobbyists and political fixers with close
connections to the White House to get their deals past
antitrust enforcers. We've heard from whistleblowers, like
Roger Alford, who have described a pay-to-play environment in
DOJ antitrust.
When you were at DOJ, Professor Rose, especially in your
time working on the JetBlue-Spirit case, did the President ever
lay in with you or your team?
Ms. Rose. Absolutely not. In fact, we weren't even allowed
to be at meetings with White House officials, not related to
antitrust topics, but if it was for a sector where we had an
antitrust investigation going on.
Ms. Balint. From your perspective, this is outrageous. The
shift is completely and totally outrageous?
Ms. Rose. Absolutely.
Ms. Balint. Why is it so important that this doesn't
happen, that you don't have a President interfering?
Ms. Rose. Because if we have a pay-to-play system, both
businesses that want to operate honestly, effectively, and
consumers and workers all lose. We're subject to the capricious
whims of whoever's willing to pay more to get the outcome that
they want.
Ms. Balint. I agree. We have bipartisan agreement in this
room that air travel--maybe we do, maybe we don't, actually,
now that I listen to some of my questions from my colleagues.
If you ask regular Americans, they think things aren't
working very well for them in the flying public. History has
shown us that Congress has policy levelers that we can pull
here. Whether it's a return to a pre-1978 regulation model or
stronger oversight or passing laws to break up these massive
airlines, the traveling public wants change.
We all fly every week. I can tell you, when I'm sitting in
that waiting room, I don't hear people saying things are
working great here, we feel really great about the state of the
airlines today.
I turn to you, Professor Rose, for a final word. What
should Congress do to ensure a more competitive industry going
forward?
Ms. Rose. Keep our eye on the ball with respect to
antitrust. Some of these arguments about how to expand
infrastructure, reducing barriers to entry could be an enormous
benefit.
Ms. Balint. Thank you, Professor Rose. I yield back.
Mr. Fitzgerald. The gentlelady yields back. I now recognize
the Chair of the Full Committee, Mr. Jordan, for five minutes.
Chair Jordan. Thank you, Mr. Chair. Mr. Stout, there are
four big players, right, four big airlines?
Mr. Stout. Yes.
Chair Jordan. United, Delta, and American. Then, Southwest
is big, but not quite as big as the other three. Is that right?
Mr. Stout. That's correct.
Chair Jordan. Then, there's a second category, this low-
cost carriers, sort of in the middle. That's people like
JetBlue and airlines like that. Then, you have the super-low
cost, the ultra-low cost: Frontier, Allegiant, and others,
right?
Mr. Stout. Correct.
Chair Jordan. That's the state of play?
Mr. Stout. So far, yes.
Chair Jordan. OK. Oe of the guys in the middle was going to
buy one of the guys in the smaller category. Is that right?
JetBlue was going to buy Spirit.
Mr. Stout. That's right.
Chair Jordan. OK. By the way, what are the Big Four? What
percentage of the airline industry is the Big Four?
Mr. Stout. The numbers I've seen are about 75 percent, but
I've heard 80 or a little bit lower--
Chair Jordan. Seventy-five to 80 percent. So pretty big.
Then, the JetBlue-Spirit was going to be what percentage of the
business then?
Mr. Stout. I don't remember the exact number.
Chair Jordan. If that merger would have happened--
Mr. Stout. It was a much smaller percentage.
Chair Jordan. Yes, but I heard like 10 percent?
Mr. Stout. It was something like that, yes.
Chair Jordan. All right. This is proposed a couple of years
ago, like three or four years ago. A couple years later, it's
like the Justice Department sues; says, no, you can't do it,
this is bad; Ms. Rose says it's terrible, and it all falls
apart. Is that right?
Mr. Stout. That's correct.
Chair Jordan. We've got this famous tweet now from Senator
Warren. She said,
I've warned for months that a JetBlue-Spirit Airlines merger
would have led to fewer flights and higher rates.
Seems to me now that Spirit's went out of business, we have got
fewer flights and higher rates. Is that true?
Mr. Stout. I believe that is correct.
Chair Jordan. Yes. Maybe if they'd have merged, we wouldn't
have that, right?
Mr. Stout. That's correct.
Chair Jordan. Yes. Ms. Rose said, ``JetBlue was going to
raise prices 30 percent.'' Would raising prices by 30 percent
still be lower than the Big Four?
Mr. Stout. It would, and it would also still provide
airline services where now there's none.
Chair Jordan. Right. Right. There would still be lots of
employees at Spirit probably still working.
Mr. Stout. Right. Effectively, the price is infinite now
because there is no option.
Chair Jordan. How many Spirit employees lost their job, do
you know?
Mr. Stout. I actually don't have that number, sir.
Chair Jordan. Seventeen thousand people lost their job
because the Biden DOJ said, ``no, we don't want a middle-class,
lower-cost airline buying a super low-cost airline.'' Even if
they raised prices 30 percent, it's still lower than the Big
Four. They would account for 10 percent of the market and be
able to compete against the 80 percent. What am I missing in
there? Is that accurate?
Mr. Stout. No, I think that's accurate.
Chair Jordan. Yes. The Biden Administration said, ``no, we
can't do that.'' Elizabeth Warren even said it's going to help
consumers, when today, in fact, because Spirit's out of
business, there are less fights--less flights, less people
working, 17,000 thousand people out of a job.
Mr. Stout. That's correct, sir.
Chair Jordan. All they want to do is talk about the Trump
Administration antitrust?
Mr. Stout. Well, part of the problem is that this is an
antitrust doctrinal problem. The Biden DOJ was actually
pursuing antitrust case law the way it is established. Part of
what I've been trying to be here today to convey is that we do,
in fact, need to think about out-of-market efficiencies when
we're looking at these competition concerns. Because JetBlue
providing more extended service was a benefit to consumers that
was completely discounted under current antitrust doctrine.
This Committee has the jurisdiction to solve that problem.
Chair Jordan. I think we do too. Mr. Ravich, anything you
want to add to that?
Mr. Ravich. No, I would add something like this, which is
Spirit is an example of deregulatory success. They created a
completely fresh innovation that actually--
Chair Jordan. Fresh they named it after them, right?
Mr. Ravich. Right. Their yellow planes were remarkable.
Chair Jordan. They were so unique, so new that they
actually called it the Spirit effect in the airline industry.
Imagine that.
Mr. Ravich. Yes, sir.
Chair Jordan. Elizabeth Warren says, ``no, no, no, we're
going to put them out of business, not let them continue.'' We
can't let JetBlue buy. Oh, we can't have a merger. Because five
big people competing would be somehow harmful to consumers when
right now it's four big players. That makes no sense to me. I
didn't mean to jump in. Keep going.
Mr. Ravich. No, I have nothing to add. Mic drop on that.
Chair Jordan. OK. Governor, you get the last minute to
hopefully educate the Committee on why we need to do things the
right way at the Justice Department versus how it was done
before. Anything you want to add?
Mr. Sununu. You want me to free form?
Chair Jordan. Oh, yes.
Mr. Sununu. No, well, look, I would just--when we talk
about--the one thing I've picked up here is, today, 46 percent
of all passengers fly on low-cost or ultra-lost-cost carriers.
That number was about 25 percent in the year 2000. It was about
four percent around the time of deregulation. More people are
flying on these other low-cost carriers and low-cost carriers
than ever before, which is an opportunity. I would just
caution, I know 75-80 percent has been thrown around. You have
to be careful. That can be miles traveled, that can be number
of flights. When you look at actual number of passengers, they
have about 50 percent of--low-cost and ultra-low-cost carriers.
That's a great thing.
Chair Jordan. Yes.
Mr. Sununu. Right? That increased competition with low-cost
pricing has forced the big guys to create low-cost models that
they traditionally didn't have to allow, again, more
competition for lower-income families.
Chair Jordan. Imagine that. Competition in the marketplace.
Mr. Sununu. It works.
Chair Jordan. Imagine that. Mr. Chair, I yield back.
Mr. Fitzgerald. The Chair yields back. I now recognize the
gentleman from Illinois.
Mr. Garcia. Thank you, Mr. Chair. As my Democratic
colleagues have laid out, Republican attempts to blame the
Biden Administration for the collapse of Spirit is nonsense.
It's a distraction from the Iran war, which is illegal,
unpopular, and cruel. It was fuel prices that was a major
factor in Spirit going under. It's a distraction from the
cesspool of corruption in the DOJ Antitrust Division and what
it's become. It's a distraction from the real competition
issues facing commercial aviation today.
Despite the rosy picture that Governor Sununu paints, only
31 percent of Americans have a positive view of the airline
industry, and consolidation has fueled anticompetitive
practices that are ripping off constituents like mine and
hurting the aviation system.
We're seeing these practices, for example, at Chicago
O'Hare, which is the only dual-hub airport in the country. That
competition seems to bother United CEO Scott Kirby. Mr. Kirby
has said that his long-term plan is for United to take over
American's gates and threaten to add, quote, ``as many flights
as are required,'' crowd out American.
After United tried to flood O'Hare with unprofitable
flights, the FAA imposed a flight cap to address congestion
that would have overstressed the system and jeopardized safety.
This turf war and the flight cap likely influenced Southwest's
decision to leave O'Hare and the decisions of low-cost carriers
to reduce capacity there as well.
Professor Rose, how has airline consolidation and the rise
of fortress hubs led to more anticompetitive practices like
what we're seeing at O'Hare?
Ms. Rose. I want to first note that, as you did, how the
airlines can confer benefits for local travelers by offering
frequent nonstop service to many destinations. The economics
literature shows that hub airlines can cement their market
power and high fares by tactics to keep their rivals small or
to force them out, as you've alluded to.
Chicago has long benefited from competition between two hub
airlines at O'Hare, giving them the benefits of that intense
set of offerings but constraining the anticompetitive effects.
The evidence shows that United seems to be working to reduce
those competitive constraints. Unchecked, it could have
enormous adverse consequences for Illinois travelers.
Mr. Garcia. Thank you. I want to discuss another
anticonsumer practice: surveillance pricing. Last year, Ranking
Member Nadler and I demanded answers after Delta executives
indicated that they were partnering with an Israeli AI pricing
company to adopt surveillance-based pricing.
Governor Sununu, let me ask you, do any of your members
charge individualized prices to consumers based on personal
information, like purchase history, web browsing behavior,
geolocation, social media activity, or financial status?
Mr. Sununu. One hundred percent absolutely not.
Surveillance pricing is different than dynamic pricing. Dynamic
pricing, virtually every industry uses surveillance pricing, as
you've pointed out, looks at personal information. We
absolutely do not participate in that.
Mr. Garcia. Well, since these companies claim that they're
not engaged in surveillance pricing, would Airlines for America
support legislation banning this practice?
Mr. Sununu. Banning surveillance pricing?
Mr. Garcia. Yes.
Mr. Sununu. A hundred percent. Yes, it's terrible.
Mr. Garcia. If you're not going to adopt surveillance
pricing, then you should have no objection to banning it. From
an antitrust enforcement to reforming gate and slot
allocations, there are many other policy solutions that would
increase competition, lower prices, and protect workers.
Congress should be enacting them, not covering up Trump's
corruption and criminality.
Before I yield back, I would ask for unanimous consent to
submit for the record my letter with Ranking Member Nadler to
Delta about surveillance pricing. I also ask unanimous consent
to submit this January 2024 report titled, ``How to Fix Flying:
A New Approach to Regulating the Airline Industry.''
Thank you, and I yield back.
Mr. Fitzgerald. Without objection. We now recognize the
gentlelady from Vermont for a UC request.
Ms. Balint. Mr. Chair, I have some UCs. Thank you, Mr.
Chair.
First, from Reuters, ``Spirit Airlines shuts down,
industry's first Iran war casualty.''
Second, from the BBC, ``Trump says, quote, `I love the
inflation' as U.S. prices rise at fastest rate in 3 years.''
Third, from Frommer's, ``U.S. Airlines Try to Abandon
Passenger Rights and Performance Reports--to Secretly Police
Themselves.'' Airline lobbyists are pressuring regulators to
abandon your protections.
Fourth, from the Travel Technology Association, a prepared
statement for the record.
Mr. Fitzgerald. Without objection.
Ms. Balint. Thank you.
Mr. Fitzgerald. I now recognize the gentlewoman from
Wyoming for five minutes.
Ms. Hageman. Thank you. I do want to remind everyone that
the Spirit-JetBlue merger failed because of the Biden
Administration's outright hostility to mergers during those
four years when they were in office.
Lina Khan took the position that no merger would be allowed
unless the parties ended up worse off than before, which I
think is incredibly, stunningly stupid. That was the position
that they took, and now we are where we are. That Mr. Stout and
Mr. Ravich and Governor Sununu, you have described the economic
consequences of those kinds of decisions.
One of the frustrations that I have had being in Congress
is that I have not found many people in Washington, DC, who
understand the concept of opportunity costs. I would love it if
we had a requirement--maybe we can pass a constitutional
amendment that before you can become a Member of Congress, you
actually have to take an economics class to learn something
that basic.
I come from Wyoming, and despite being one of America's
most rural States, Wyoming's air service is a significant
economic contributor. Wyoming's 39 public-use airports
collectively contribute approximately 3.5 billion in annual
economic impact, while nine commercial service airports support
over 20,000 jobs each year. Over 875,000 passengers boarded
flights departing from Wyoming's airports in 2025, with my
State ranking seventh nationally in passenger growth since
2019.
Wyoming has the second-highest average fare in the country.
It is 53 percent more than the national average. With new
industries moving into Wyoming each year and tourism being one
of our largest business sectors in terms of economic impact,
maintaining accessible, reliable air service is critical for
economic growth and development. In many rural markets, there's
effectively only one network carrier providing meaningful
connectivity.
Mr. Ravich, what metric should Congress use to determine
whether competition is improving for rural consumers?
Mr. Ravich. Congresswoman, thank you for the question. Some
of the metrics you gave are compelling for Wyoming for example,
right. You can look at those things and see that there's a
magnetism to Wyoming, Cheyenne, et cetera.
We don't want to disconnect certain communities. That was
always a concern of deregulation. At the same time, government
subsidization of airlines, making them go to places that aren't
necessarily compelling business cases, I think is a fair thing
to say. We just have to sort of balance those opportunities--
economic opportunities for firms to reasonably decide what
business model they want, while also giving Americans and
emerging places and dynamic places the opportunity to travel
where they want and can.
Ms. Hageman. OK. Governor Sununu, in your written
testimony, you cite that 5.5 percent of U.S. domestic market
passengers traveling in city pairs were left with just one
carrier. With limited exceptions, this statistic is broadly
applicable to Wyoming, as most of our communities solely rely
on United Airlines for commercial air service.
What responsibility do major airlines have to maintain
access to the national air transportation system for rural
communities?
Mr. Sununu. Let me, if I may, begin by saying, I think
you're absolutely correct, Wyoming especially is
disproportionately--even as you're talking rural areas--really
disproportionately challenged when it comes to access,
specifically in Cheyenne and Jackson. I know the airlines have
looked at different opportunities there.
A couple of things. Rural access is absolutely critical,
right? That's about choice. That's about competition. What we
find is that consumers are making interesting choices. They're
not just looking at their smaller airports. They're willing to
travel further because smaller airports are typically more
expensive, unfortunately. That's why EAS, the essential air
service (EAS) program, is vital. We're huge supporters of it.
Frankly, it should probably be expanded to make sure that these
connectivity points are really there.
To your point, this is where--in some markets you do have
five, six, seven, and eight different competitors flying from
point to point; not in Wyoming.
Ms. Hageman. Not in Wyoming.
Mr. Sununu. Not in Wyoming. It's really, really tough.
Again, anything we can do to make sure that with--on a
deregulatory basis, making sure that the financial
opportunities flow to the customer, not to the government or--
to the customer, those opportunities will flow there, so that
competition can thrive reducing the cost on airports, making
sure that infrastructure is done, making sure that--again, I go
back to even looking at our national airspace, right.
Right now, we manage--every little pocket manages its own
little part of the national airspace, as opposed to this new
modernized system that where Bryan Bedford and the FAA are
bringing into play, which will allow more efficiency,
especially in rural areas that right now you could have small
airports that could have unmanned towers right now, right. A
major carrier isn't going to fly there necessarily. By having a
more comprehensive air control system as well you are going to
have more opportunity in rural areas.
Ms. Hageman. I am out of time, but if you have an
opportunity, I would love for each of you during the course of
this hearing to give one example of what you think Congress
should do to improve this situation. Thank you. I yield back.
Mr. Fitzgerald. The gentlelady yields back. I now recognize
the gentleman from Georgia for five minutes.
Mr. Johnson. Thank you, Mr. Chair. It's been years since
the Biden Administration challenged the acquisition of Spirit
by JetBlue. It's been years.
Isn't it a fact that Spirit collapsed because Trump's
unconstitutional war of choice with Iran caused fuel prices to
surge uncontrollably? Isn't that a fact, Professor Rose?
Ms. Rose. That's what the Spirit CEO said.
Mr. Johnson. We have all felt the pain at the pump with our
cars, and the price of jet fuel went up even more steeply than
the price of gasoline. Once Trump went to war with Iran, the
price of jet fuel became more than double the cost that was
contemplated in Spirit's restructuring projections, costing
Spirit nearly $100 million more than they were expecting in
March and April alone. In fact, as you note, Professor Rose,
their bankruptcy filings admit that it was untenable fuel costs
that led to their downfall.
The impact of Trump's reckless war extends beyond Spirit.
The Bureau of Transportation Statistics reported that airlines
paid nearly $6.5 billion in fuel costs in April 2026, which is
78 percent higher than what they paid a year before the war
began. Isn't that right, Mr. Sununu?
Mr. Sununu. No, it's not right.
Mr. Johnson. OK. Well, isn't it correct that airlines could
not absorb the added cost of the Iran war and the price of jet
fuel, and so that's why they had to raise prices over 30
percent--
Mr. Sununu. Oh, the airlines as a whole, yes, sir. Sorry.
Spirit Airlines was in major financial distress years before
the issue in Iran, though.
Mr. Johnson. Iran pushed them over the brink, though.
Mr. Sununu. Two months of increased fuel costs did not sink
Spirit. That's not what sunk Spirit.
Mr. Johnson. Well, it certainly wasn't the denial of the
merger that did it. Let me move on.
Even people who are not flying are hurting because of
Trump's war of choice. The diesel prices are skyrocketing.
Trucks that deliver goods to grocery stores use diesel, so they
need to pass those expenses on to consumers. In just the first
few months of this unconstitutional war, American households
paid an extra $450 on average. Wholesale prices are rising,
hiring plans are delayed, and farmers cannot get their
fertilizer for their cops.
Trump went in without a plan, and who knows how long this
war is actually going to last. American businesses and
consumers were finally free from Trump's tariffs just in time
to be slapped down again by a price increase from this war of
choice.
Professor Rose, one of the phrases in your written
testimony really struck me. You said that you were concerned
that under the Trump Administration, antitrust enforcement is
turning into, quote, ``a political favor factory.'' I don't
think it could be put any better than that.
Can you talk a little bit more about why the entire system
suffers when the wealthy and the politically connected can buy
the outcome that they prefer?
Ms. Rose. Yes. I always thought of antitrust as being the
domain that preserved a consumer- and worker-facing interest in
competition. Honestly, for other small businesses or businesses
that want to grow preserved their ability to expand. When you
don't have that protection, then you empower companies,
particularly stronger companies or companies who are seeking
competitive advantage and monopoly rent, to raise prices, to
create barriers to entry to competition, and to restrict others
from coming into the market.
As I mentioned before, you can have workers getting paid
less because you're reducing competition for their employment,
and all of that has tremendous cost for the American people.
Mr. Johnson. Thank you. Mr. Sununu, I find it curious, I'm
curious about your disagreement with the Chair of Spirit
admitting that it was untenable fuel cost that was the cause of
their demise. You take issue with that. I don't understand why.
Let me ask Professor Rose. Do you think that concentrated,
unchecked economic power poses a threat to freedom?
Ms. Rose. Yes, sir, although I'm not sure that's accessible
through the antitrust laws, at least as currently written.
Mr. Johnson. All right. Thank you. I'm out of time. I yield
back.
Mr. Fitzgerald. The gentleman yields back. I now recognize
the gentleman from Kansas for five minutes.
Mr. Schmidt. Thank you, Mr. Chair. I want to thank all our
witnesses for being here.
Listening carefully to the questioning, the back-and-forth,
as always, it's been informative, and listening to our friends
on the other side who've talked a great deal about fuel cost.
I'd like to take up that line of discussion, Governor, perhaps
with you, knowing that you most directly reflect--your folks
have used the industry.
I would hope the answer to this question is no, but,
Governor, would it surprise you--
Mr. Sununu. No.
Mr. Schmidt. Thank you very much. That's the best witness
I've had all day. That's good. Would it surprise you to know
that jet fuel prices on average at the height of the war in
Iran were the same as they were in April 2022?
Mr. Sununu. No.
Mr. Schmidt. Of course, in April 2022, we were about two
months after the Russian invasion of Ukraine. Isn't that right?
Mr. Sununu. There was a brief spike there, yes.
Mr. Schmidt. It was only three months after April 2022, in
July 2022, that the merger of JetBlue-Spirit was publicly
proposed. Isn't that right?
Mr. Sununu. I believe that's right.
Mr. Schmidt. At the time the antitrust reviewers in the
prior administration began their consideration and ultimately
review of the merger, didn't they know or shouldn't they have
known that fuel price spikes were not only a possibility but a
recent reality?
Mr. Sununu. I would imagine so, yes.
Mr. Schmidt. Would they have taken that into account in
their review?
Mr. Sununu. I would have hoped so, yes.
Mr. Schmidt. Would airline managers, leadership, have taken
that into account in their planning for the future
survivability of their firms?
Mr. Sununu. Yes. I would just say each of the airlines
hedges against fuel in very different ways, and some of them
don't hedge at all. They used to hedge; they don't quite
anymore in terms of how they manage the risk. They all manage
that risk profile differently.
Mr. Schmidt. Let me talk a little bit about fuel prices,
Governor, because it's been so central to today's discussion, I
think it's very relevant. Going forward, there are going to be
future fuel spike--high spikes through international events,
through other market factors. It is going to happen, as it
happened in April 2022, and it happened again within the last
six months or so. Something will happen down the road.
As airline leadership, managers, whether they're from the
Big Four or from the midsize or from the small planes, they all
pay the same fuel prices. Don't they, Governor?
Mr. Sununu. Relatively, yes.
Mr. Schmidt. They all have to consider planning to hedge
against that risk of a spike in prices. Isn't that right?
Mr. Sununu. Yes, they have to plan. That's for sure.
Mr. Schmidt. As they're planning, do they take into account
ways that they might be able to mitigate the price of jet fuel
going forward?
Mr. Sununu. Yes, they do, and they all do it a little bit
differently.
Mr. Schmidt. Would that include a discussion of ultimate
forms of jet fuel that might be coming onto the market in ways
that are commercially relevant?
Mr. Sununu. Of course. They're all big believers in users
in SAF, as you know, and that continues to rise.
Mr. Schmidt. Let's talk about SAF just a little bit. It's
obviously an interest of ours in farm country. We care a lot
about it. We care about it not only because it helps our
producers and it helps our local economies when it's produced
domestically, and the investment comes here, but also because
it helps our consumers who are ultimately flying on the
aircraft that have the potential.
Can you share with us a little bit about how a mature
domestic SAF industry at scale could have an effect on the
planning for airlines to be more competitive, including price
competitive for consumers?
Mr. Sununu. Sure. As the industry matures, the economics
get better and better, right? Because, like any fairly new
technology--and it is a fairly new introduction into the
industry--it starts out fairly costly. Lots of new--I don't
want to say barriers to entry but, costs are indeed--all our
airlines are investing in various forms of research and
development to make SAF more accessible, easier to produce,
whatever it may be; trying to get more companies that actually
make--giving more time for more companies that actually make
SAF to come onto the market. I actually just met with one of
the largest SAF manufacturers, and they're building a brand-new
plant. They're expanding.
There's no doubt that over time prices should definitely
come down, be much more competitive with standard jet fuels,
and provide more options, potentially, as you may see severe
spikes in the future.
Mr. Schmidt. Are there ways that Congress could better
partner with the industry to help that transition to scale
occur?
Mr. Sununu. Look, any sort of infrastructure investment. I
would say, for airlines in particular, some of the investments
we look at are the transportation, right? You have your own
transportation system for SAF because you're not mixing it with
other traditional jet fuels.
Permitting. Permitting reforms to make sure that we can
build and develop, whether it's folks that want to develop SAF,
or the pipelines to move SAF from point A to point B, or
getting storage tanks approved at various airports. That's one
of the bigger barriers because you need a whole separate system
for it, so that requires a lot more infrastructure. Permitting
and investment in that infrastructure would be very helpful.
Mr. Schmidt. These are discussions that will involve
everybody in the industry, except Spirit, right? Is it not
relevant to them anymore?
Mr. Sununu. Not anymore, unfortunately, yes.
Mr. Schmidt. Mr. Chair, I yield back.
Mr. Fitzgerald. The gentleman yields back. I think we've
gone through just about all the Members that are available
today. I was just going to utilize my five minutes to ask two
more questions.
Governor Sununu, this is a topic that came up a couple of
times, just to dig into this a little bit more. At the slot-
controlled airports, the incumbent carriers benefit by a use-
it-or-lose-it system, right?
Mr. Sununu. That's right.
Mr. Fitzgerald. Do you think the slot system harms
competition because of the way it's kind of designed?
Mr. Sununu. No. Well, a couple things. When a smaller
carrier wants a slot, that's worked out between the carrier and
the airport itself. If the carrier isn't happy or feels like
they're being unfairly treated, there is an appeals process up
to the FAA that they can use, but that's really a carrier-
airport-type decision.
I would argue and let you know that more slots are
allocated to low-cost carriers today than ever before, right.
They have and continue to grow capacity.
Yes, the slots not--and by the way, not every airport is
slotted. That's another thing to be aware of. Some airports
are, some airports aren't.
One of the things I've learned in this industry is there's
a saying, ``if you've seen one airport, you've seen one
airport.'' That's in terms of its structure, their management,
their slot system, how they allocate, the infrastructure, and
the airlines coming into it. Everyone is truly taken unique.
Again, we want that broad variety. I represent a lot of
airlines, right. I want everybody to have a fair shot at that
pie.
Mr. Fitzgerald. Very good. Thank you. Mr. Ravich, what's
your take on the slot system and the impact it has on overall
operations nationwide?
Mr. Ravich. Chair, I do think you've identified an issue
that's worth the attention of this Committee. As Governor
Sununu rightly points out, A4A even has a diverse constituency,
right. There's no sort of monolithic airline industry. They
even compete with one another, and they don't agree
necessarily. Some of these airlines want the other airline
slots, even with United and American are big airlines.
There is some anticompetitive pressure or tendencies in
slots and gates that does need evaluation. I should refer to
pending legislation, right, in the Senate with the gateway
access law, which does have some merit to it.
Mr. Fitzgerald. Well, very good. That concludes today's
hearing. I want to thank the witnesses for appearing before the
Subcommittee today.
Without objection, all Members will have five legislative
days to submit additional written questions to the witnesses or
additional materials for the record.
Mr. Raskin. Mr. Chair.
Mr. Fitzgerald. The gentleman is recognized.
Mr. Raskin. I just want to add a couple of UC requests, if
that's all right, Mr. Chair.
Mr. Fitzgerald. Yes.
Mr. Raskin. First, the decision of the Reagan appointee,
Judge Young, in U.S. v. JetBlue Airways Corporation, January
16, 2024.
Second, an article from Law360 titled, ``Biden-Era M&A Data
Shows Continuity, Not Revolution.''
Finally, this was an article February 21, 2025, ``Spirit
Airlines to exit Chapter 11 `within weeks' as court backs
recovery plan.'' That, of course, was just a few days before
the war started in Iran.
Mr. Fitzgerald. Without objection. With that, this hearing
is adjourned.
[Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]
All materials submitted for the record by Members of the
Subcommittee on the Administrative State, Regulatory Reform,
and Antitrust can be found at: https://docs.house.gov/
Committee/
Calendar/ByEvent.aspx?EventID=119409.
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