Tag:airlines
Regulatory Framework for Airline Mergers: Recent Scrutiny by Regulators Leads to Splitting Antitrust Decisions by the DOJ and DOT
Alaska Airlines and Hawaiian Airlines’ proposed $1.9 billion merger has survived litigation by the U.S. Department of Justice (“DOJ”) and the Department of Transportation (“DOT”) following recent scrutiny of airlines by regulators. Earlier this year, a federal judge blocked the $3.8 billion acquisition of Spirit Airlines by JetBlue due to antitrust concerns. The DOJ successfully blocked the acquisition by arguing it would stifle competition and raise prices for consumers. The Alaska Airlines and Hawaiian Airlines merger managed to survive an inquiry by the DOT leading to split decisions by regulators.
Boeing’s Missteps Lead to Heavier Congressional Oversight
Boeing’s controversial history including the publicized suicide of one of its whistleblowers shortly before his deposition to TikTok videos of panels blowing off mid-air or planes catching fire have prompted public scrutiny. These events, mainly the latter, have raised also questions about Boeing’s compliance with Federal Aviation Administration (FAA) regulations the Department of Justice (DOJ) rulings. However, this is not the first time these concerns have come to light.
Airways Circumvent Inefficient Regulation with Inefficient Workaround
A 2010 regulation heightened the in-flight hour requirements for ‘First Officers’ (i.e., copilots) from 250 hours to 1500 hours. Advocacy for this regulation came from the families of Colgan Air Flight 3407, a fatal jetliner crash which the National Transportation Safety Board (NTSB) determined was caused by pilots failing to respond to warnings that the airplane was about to stall. However, years into the implementation of the 1500 hours rule, the regulation has shown only questionable increases in flight safety. Critics argue that debatable increases in passenger safety do not offset the sharp increase in costs associated with pilot training. Instead, airlines have figured out a way to circumvent this questionably inefficient regulation by sacrificing commercial efficiency.