May 26 Members of U.S. Congress Are Advocating the “Mother of all Subsidies” 


The American people would be saddened and sickened to learn that some Members of Congress not only put their own personal interests before their constituents’ but also can go much further and inflict financial harm on the traveling public, mid-size communities and those seeking employment in the travel and tourism industry.

Members are allowed to double and triple book flights home from Washington and pay nothing week in and week out for multiple changes while, in contrast, ordinary citizens can pay hundreds of dollars to make just a single flight change.

Airlines cultivate a cozy relationship with Members through that practice as well as special reservations desks that begin the very exceptional treatment Members receive throughout the entire travel experience. Airlines are repaid handsomely when they receive generous legislative support and when Members sign letters that airline lobbyists put before them.  

While this convenient relationship substantially undermines credibility, specifically of a recent letter that 262 Members of the House of Representatives signed on behalf of the BIG 3 U.S. airlines - American, Delta and United - it nevertheless underscores what is so very wrong with Washington’s unyielding focus on its own interests and those of Special Interests at the expense of everyday consumers.

The BIG 3 claim that the Gulf airlines -- Emirates, Qatar and Etihad - receive government support that is harming the U.S. carriers. The Congressional letter supports the BIG 3’s call for a freeze in new air services by the Gulf airlines -- all without having allowed those carriers an opportunity to respond to the allegations, not to mention the glaring hypocrisy that the U.S. airline industry, by the BIG 3’s very own math, has been the most heavily taxpayer subsidized and structurally advantaged in history of commercial aviation.

Now that U.S. airlines have secured antitrust immunity for their global alliances and achieved radical consolidation of the U.S. airline industry, they want to block new competition. Members are all too willing to lend a hand in this building of “Fortress America” first by supporting U.S. airlines’ continuing quest to prevent Norwegian Air International from introducing new competitive flights to the U.S. and second by endorsing the airlines’ overarching strategy to increase profits by foreclosing on new competition from the Gulf carriers.

If successful in frustrating foreign carrier new entry and robust competition, then Members of Congress will have inflicted financial injury on virtually all Americans through the “Mother of all Subsidies” -- artificially higher airfares and fees. What’s more, Members will be responsible for lost travel and tourism jobs and reduced economic development for mid-sized communities due to lost connectivity to the world’s important business centers and emerging markets. 

When it comes commercial aviation, antitrust and competition policy, the consumer represents the North Star; policy needs to be in alignment with consumers’ interests. Moreover, in the U.S. free enterprise system, consumers have sovereignty -- the power or freedom to have final say. In the end, consumers determine whether any business succeeds or fails. Government protectionist policies rob consumers of this power and distort markets. No market in the world is fair; to succeed market participants must play to their unique strengths and advantages. Members of Congress need to understand this and act accordingly and in the best interests of consumers.

First published in The Hill; republished with permission.

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