“The 30,000 Foot View: Competition and Regulation in the U.S. Airline Industry”

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                  THE 30,000 FOOT VIEW: COMPETITION AND5                   REGULATION IN THE U.S. AIRLINE INDUSTRY6=======================================================================78                                HEARING910                               BEFORE THE1112               SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,13                 REGULATORY REFORM, AND ANTITRUST1415                       COMMITTEE ON THE JUDICIARY1617                     U.S. HOUSE OF REPRESENTATIVES1819                    ONE HUNDRED NINETEENTH CONGRESS2021                             SECOND SESSION2223                               __________2425                        WEDNESDAY, JUNE 24, 20262627                               __________2829                           Serial No. 119-743031                               __________3233         Printed for the use of the Committee on the Judiciary3435[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3637               Available via: http://judiciary.house.gov3839                              __________4041                U.S. GOVERNMENT PUBLISHING OFFICE4264-097                 WASHINGTON : 202643=======================================================================4445                       COMMITTEE ON THE JUDICIARY4647                        JIM JORDAN, Ohio, Chair4849DARRELL ISSA, California             JAMIE RASKIN, Maryland, Ranking50ANDY BIGGS, Arizona                      Member51TOM McCLINTOCK, California           JERROLD NADLER, New York52THOMAS P. TIFFANY, Wisconsin         ZOE LOFGREN, California53THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee54CHIP ROY, Texas                      HENRY C. ``HANK'' JOHNSON, Jr.,55SCOTT FITZGERALD, Wisconsin              Georgia56BEN CLINE, Virginia                  TED LIEU, California57LANCE GOODEN, Texas                  PRAMILA JAYAPAL, Washington58JEFFERSON VAN DREW, New Jersey       J. LUIS CORREA, California59TROY E. NEHLS, Texas                 MARY GAY SCANLON, Pennsylvania60BARRY MOORE, Alabama                 JOE NEGUSE, Colorado61HARRIET M. HAGEMAN, Wyoming          LUCY McBATH, Georgia62LAUREL M. LEE, Florida               DEBORAH K. ROSS, North Carolina63WESLEY HUNT, Texas                   BECCA BALINT, Vermont64RUSSELL FRY, South Carolina          JESUS G. ``CHUY'' GARCIA, Illinois65KEVIN KILEY, California              SYDNEY KAMLAGER-DOVE, California66GLENN GROTHMAN, Wisconsin            JARED MOSKOWITZ, Florida67BRAD KNOTT, North Carolina           DANIEL S. GOLDMAN, New York68MARK HARRIS, North Carolina          JASMINE CROCKETT, Texas69ROBERT F. ONDER, Jr., Missouri       SUMMER LEE, Pennsylvania70DEREK SCHMIDT, Kansas71BRANDON GILL, Texas72MICHAEL BAUMGARTNER, Washington73                                 ------7475               SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,76                    REGULATORY REFORM, AND ANTITRUST7778                   SCOTT FITZGERALD, Wisconsin, Chair7980DARRELL ISSA, California             JERROLD NADLER, New York, Ranking81BEN CLINE, Virginia                      Member82LANCE GOODEN, Texas                  J. LUIS CORREA, California83HARRIET HAGEMAN, Wyoming             BECCA BALINT, Vermont84MARK HARRIS, North Carolina          JESUS G. ``CHUY'' GARCIA, Illinois85DEREK SCHMIDT, Kansas                ZOE LOFGREN, California86MICHAEL BAUMGARTNER, Washington      HENRY C. ``HANK'' JOHNSON, Jr.,87                                         Georgia8889               CHRISTOPHER HIXON, Majority Staff Director90                ARTHUR EWENCZYK, Minority Staff Director9192                            C O N T E N T S9394                              ----------9596                        Wednesday, June 24, 20269798                           OPENING STATEMENTS99100                                                                   Page101The Honorable Scott Fitzgerald, Chair of the Subcommittee on the102  Administrative State, Regulatory Reform, and Antitrust from the103  State of Wisconsin.............................................     1104The Honorable Becca Balint, a Member of the Subcommittee on the105  Administrative State, Regulatory Reform, and Antitrust from the106  State of Vermont...............................................     3107The Honorable Jamie Raskin, Ranking Member of the Committee on108  the Judiciary from the State of Maryland.......................     5109110                               WITNESSES111112The Hon. Christopher T. Sununu, President, CEO, Airlines for113  America (A4A)114  Oral Testimony.................................................     7115  Prepared Testimony.............................................    10116Timothy M. Ravich, Senior Counsel, Tressler LLP117  Oral Testimony.................................................    22118  Prepared Testimony.............................................    24119Kristian Stout, Director, Innovation Policy, International Center120  for Law and Economics (ICLE)121  Oral Testimony.................................................    37122  Prepared Testimony.............................................    39123Nancy L. Rose. Charles P. Kindleberger Professor of Applied124  Economics, Massachusetts Institute of Technology125  Oral Testimony.................................................    55126  Prepared Testimony.............................................    57127128          LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING129130All materials submitted for the record by the Subcommittee on the131  Administrative State, Regulatory Reform, and Antitrust are132  listed below...................................................    89133134An article entitled, ``Don't Let What Happened to Spirit Airlines135  Happen to Warner Bros,'' Jun. 8, 2026, National Taxpayers136  Union, submitted by the Honorable Scott Fitzgerald, Chair of137  the Subcommittee on the Administrative State, Regulatory138  Reform, and Antitrust from the State of Wisconsin, for the139  record140Materials submitted by the Honorable Jesus G. ``Chuy'' Garcia, a141  Member of the Subcommittee on the Administrative State,142  Regulatory Reform, and Antitrust from the State of Illinois,143  for the record144    A letter to Ed Basrian, Chief Executive Officer, Delta145        Airlines, from Members of Congress, Nov. 5, 2025146    A report entitled, ``How to Fix Flying: A New Approach to147        Regulating the Airline Industry,'' Jan. 2024, American148        Economic Liberties Project149Materials submitted by the Honorable Becca Balint, a Member of150  the Subcommittee on the Administrative State, Regulatory151  Reform, and Antitrust from the State of Vermont, for the record152    An article entitled, ``Spirit Airlines shuts down, industry's153        first Iran war casualty,'' May 2, 2026, Reuters154    An article entitled, ``Trump says `I love the inflation' as155        US prices rise at the fastest rate in three years,'' Jun.156        11, 2026, BBC157    An article entitled, ``U.S. Airlines Try to Abandon Passenger158        Rights and Performance Reports--to Secretly Police159        Themselves,'' Sept. 4, 2025, Frommer's160    A statement from the Travel Tech Association, Jun. 24, 2026161Materials submitted by the Honorable Jamie Raskin, Ranking Member162  of the Committee on the Judiciary from the State of Maryland,163  for the record164    A Decision from the United States District Court of165        Massachusetts, United States of America, Commonwealth of166        Massachusetts, District of Columbia, State of California,167        State of Maryland, State of New Jersey, State of New168        York, and State of North Carolina v. Jetblue Airways169        Corporation, and Spirit Airlines, Inc., Jan. 16, 2024170    An article entitled, ``Biden-Era M&A Data Shows Continuity,171        Not Revolution,'' Feb. 21, 2025, Law360172    An article entitled, ``Spirit Airlines to exit Chapter 11173        `within weeks' as court backs recovery plan,'' Feb. 21,174        2025, AeroTime175176 THE 30,000 FOOT VIEW: COMPETITION AND REGULATION IN THE U.S. AIRLINE177                                INDUSTRY178179                              ----------180181                        Wednesday, June 24, 2026182183                        House of Representatives184185               Subcommittee on the Administrative State,186187                    Regulatory Reform, and Antitrust188189                       Committee on the Judiciary190191                             Washington, DC192193    The Subcommittee met, pursuant to notice, at 10:04 a.m., in194Room 2141, Rayburn House Office Building, the Hon. Scott195Fitzgerald [Chair of the Subcommittee] presiding.196    Present: Representatives Fitzgerald, Issa, Cline, Hageman,197Harris, Schmidt, Baumgartner, Balint, Garcia, and Johnson.198    Also present: Representatives Jordan and Raskin.199    Mr. Fitzgerald. The Subcommittee will come to order.200Without objection, the Chair is authorized to declare a recess201at any time.202    We welcome everybody to today's hearing on regulation and203competition in the airline industry.204    Without objection, Mr. Nehls of Texas will be permitted to205participate in today's hearing for the purpose of questioning206the witnesses if a Member yields them time for that purpose.207    I will now recognize myself for an opening statement.208    Today's hearing will examine competition in the U.S.209airline industry and the government regulations that limit such210competition. As well, we will hear from witnesses. Consumers211have more choice than ever before when it comes to both212domestic and international air travel. Annual passenger traffic213has nearly quadrupled since the 1970s, and consumers now214benefit from a range of choices, from the legacy airlines to215the low-cost and ultra-low-cost carriers.216    That is all thanks to the Airline Deregulation Act of 1978.217Prior to passage of this law, the U.S. airline industry was218regulated by a government-created body known as the Civil219Aeronautics Board (CAB). The CAB heavily regulated the220industry, setting restrictions on fares, routes, and entry into221the market. In other words, the government played a significant222role in choosing which airlines could fly, where they could223fly, and what prices they could charge. This system was224severely flawed, highly ineffective, and protected the existing225carriers at the expense of promoting competition.226    Recognizing these flaws, Congress passed the Airline227Deregulation Act, which phased out the old system and allowed228airlines to freely compete. This deregulation transformed the229market into what we see today. Unshackled by government230regulation, what we saw over time was intense competitive231pressure that pushed prices down and consumer choice up.232    That pressure also led to a significant number of mergers,233acquisitions, and bankruptcies. Between 1978-2005, for example,234162 airlines filed for bankruptcy. Today's airline industry,235while certainly more accessible and more competitive, is also236more concentrated than ever before. The Big Four air carriers,237American, United, Delta, and Southwest, control nearly 80238percent of domestic airline travel. While the Airline239Deregulation Act freed the airlines from the decrees of240government boards, the government still occupies a major role241in commercial aviation that often benefits the incumbents at242the expense of new entrants.243    For example, at seven of the Nation's busiest airports, the244Federal Aviation Administration, or the FAA, controls or245distributes access to takeoffs and landings through what's246known as a slot system.247    Slot allocations are highly sought after, particularly for248new entrants. An example--at London's Heathrow, for example, a249single slot allocated sold for tens of millions of dollars. The250FAA cannot auction these slots, instead distributing them251largely to incumbent carriers who own them in perpetuity252through what's known as the grandfather rights.253    Many of these slots' allocations also tend to be awarded to254air carriers with existing infrastructure, such as gate access.255At DCA and Chicago O'Hare, for example, slot allocations256heavily favor American and United, who operate main hubs. At257other major airports, such as Atlanta and Dallas-Fort Worth,258legacy carriers control over 70 percent of the existing gates.259    Lease agreements for these gates are often long-term and260can last for decades. For example, in 2016, Delta signed a 20-261year lease agreement with the city of Atlanta for its airport.262That lease agreement also stipulated that the city of Atlanta263could not operate a second airport. These agreements create a264significant barrier to entry for competitors seeking to gain a265foothold at major airports. If a competitor can't access a266gate, it can't compete for a slot.267    Airports are also limited by government regulations that268make expanding difficult. To build new runways or terminals,269airports must submit environmental reviews to the FAA. This270process can easily be weaponized to delay airport construction.271Across the country, environmental activists file lawsuits using272the National Environmental Policy Act to delay these new273projects. These regulations act as a constraint, which in turn274limits the airline's ability to expand and compete.275    Finally, like domestic ocean shipping, the United States276reserved domestic air transportation only to its U.S. air277carriers. This practice, known as cabotage, creates significant278tension between protecting our domestic airlines and promoting279competition.280    As these examples show, the government is still heavily281involved in the airline industry.282    Consumers deserve a system where airlines compete freely283and can innovate and grow, not a system where the government284consistently puts its thumb on the scale to foreclose285competition.286    The government-imposed barriers destroy competition,287leaving consumers worse off. The most recent example of this288was the proposed Spirit-JetBlue merger. In 2023, the Biden-289Harris DOJ sued to block the proposed $3.8 billion merger. The290DOJ claimed the merger would remove Spirit from the market and291reduce competition. At the time, the proposed merger would have292created the fifth largest airline domestically with 10 percent293market share and increased competition against the Big Four.294However, one year later, a Federal judge in Massachusetts sided295with the DOJ and blocked the deal.296    Spirit later filed for bankruptcy twice and ultimately297shutdown operations in May of this year. The blocked merger of298Spirit-JetBlue offers a cautionary tale about government299overregulation. By blocking the transaction, regulators300prevented the market from testing whether a strong competitor301could emerge to challenge the industry's largest incumbents.302    At a minimum, the case demonstrates the importance of303ensuring that antitrust enforcement promotes competition rather304than merely preserving the status quo. As Congress evaluates305the future of the airline industry, we should remain mindful of306the lessons of deregulation. Competition, not heavy-handed307regulation, has been the primary driver of lower fares, greater308consumer choice, and increased innovation.309    In the words of the Airline Deregulation Act, the airline310industry needs a maximum reliance on competitive market forces.311Our goal should be to remove unnecessary barriers to entry,312encourage robust competition, and ensure that consumers, not313regulators, are the ultimate beneficiaries of airline policy. I314look forward to today's discussion.315    I now recognize Ms. Balint for an opening statement.316    Ms. Balint. Thank you, Mr. Chair. Good morning.317    Clearly, we could not see things more differently. It's no318secret that flying has gotten worse over the years. Tickets319cost more, more flights are canceled, and everything from seat320selection to carry-ons are now perks that you get to pay for.321This is the predictable result of a market that has been322allowed to consolidate for over 60 years, and an administration323that continues to prioritize the demands of huge corporations324at the cost of everyday Americans.325    Americans were promised that consolidation would produce a326more reliable, efficient, and affordable aviation system. It327has done the opposite. Flyers face new and rising fees, fewer328alternatives, no bargaining power, and increasing barriers to329affordable travel.330    In 1960, before deregulation, Americans had 40 major331airline carriers to choose from. Today, just four airlines332control over two-thirds of the domestic passenger market. We333went from 40 to four. That is not competition.334    At the same time, airline executives argue that further335consolidation is necessary to address the industry's336challenges. It was shocking to hear United Airlines, the fourth337largest airline in the U.S., float a merger with American338Airlines, the second largest carrier. The combined United339American Airline would control 34 percent of the domestic340market. Transportation Secretary Sean Duffy called the341proposal, quote, ``interesting.''342    This is alarming. We need to get back to antitrust343enforcement on the merits. For instance, in 2024, Democrats344blocked the Spirit-JetBlue merger because evidence showed it345would raise fares by up to 40 percent on dozens of routes. We346knew it would cause harm to consumers who could at least afford347it. Even a Reagan-appointed Federal judge agreed. Spirit is348gone now, not because of antitrust enforcement. Spirit is gone349because of the massive spike in jet fuel costs that are a350direct result of President Trump's unconstitutional war with351Iran. Even the Spirit CEO said that fuel prices were the352biggest factor in closing the airline.353    President Trump's war of choice has made it all worse. Jet354fuel prices have roughly doubled since the beginning of this355war. Airlines are passing that burden directly down to356passengers through higher fares, more fees, and new fuel357surcharges. Americans never agreed to this war, and that's why358I introduced a war powers resolution to end it, because359Congress, not the President, has the constitutional authority360to take this country into a military conflict. This361unauthorized, uncalled-for war is causing a rolling series of362financial blows to Americans across this country.363    Americans have spent nearly $450 more on fuel-related364expenses just since February. At the grocery store, food prices365have gone up more than three percent since last year. At the366airport, fares are up more than 20 percent in just four months.367It's the same shock to the system over and over, coming from368every direction.369    For a country our size, flying is not a perk. It is how370families see each other. It's how small business owners reach371their customers. It's how a Vermont student gets home from372college. When the cost of flying goes up, it does not just373inconvenience people; it cuts them off from what has become a374necessity in this country.375    Instead of addressing this rapidly consolidating industry376that is squeezing consumers, this administration has spent the377last year pandering to the interests of their wealthy friends.378The Biden Department of Transportation required airlines to379provide cash refunds when customers were owed. Airlines had to380disclose all fees upfront. Those policies were rolled back by381the Trump DOT. These rules were estimated to save consumers382more than half a billion dollars a year. Major airlines and383their trade associations spent millions lobbying this384administration the first nine years--excuse me--the first nine385months of 2025 to get these key consumer protections cut. It's386no surprise that the current Transportation Secretary, Sean387Duffy, was an airline lobbyist before he took his current job.388Members of Congress have pushed for an investigation into389whether Duffy continues to improperly favor the interests of390the industry that he used to represent.391    Working families across this country deserve so much better392than this. Antitrust laws are supposed to make sure the markets393work for us. Americans need to know that antitrust enforcement394decisions will be based on law, evidence, and the interests of395regular people, not political access, backroom discussions, or396the preferences of powerful corporations. Americans simply want397choices. We don't want a handful of companies to control and398limit our freedom of choice, and we don't want a Federal399Government that approves consolidation because its corporate400and political allies want it to.401    They are the reasons why I will not stop stressing the402importance of good rule of law antitrust enforcement, and I403will keep pressing the current administration on their404perversion of this critical tool for consumer protection.405    Thank you, and I yield back.406    Mr. Fitzgerald. The gentlelady yields back. While we wait407for Chair Jordan to arrive, I will now recognize the Ranking408Member of the Full Committee, Mr. Raskin, for his opening409statement.410    Mr. Raskin. Thank you, Mr. Chair, and thanks to all our411witnesses for joining us today.412    Spirit Airlines was once the Nation's leading ultra low-413cost carrier and one of the strongest forces in the economy,414holding down ticket prices for consumers. It's now collapsed.415We cannot have a serious conversation about the demise of416Spirit without talking about the obvious main culprit: The417President's disastrous and illegal war in Iran. The Iran war418has not only cost the lives of 13 American service members and419thousands of Iranian civilians, including hundreds of children,420it has cost American taxpayers more than $100 billion, and it's421cost American consumers more than $60 billion in increased fuel422costs alone, which averages to more than $470 per American423household.424    It also caused the cost of jet fuel to double overnight,425forcing Spirit to take on an extra $100 million in unexpected426costs in just a couple of months. For an ultra-low-cost carrier427like Spirit which operates on thin margins to deliver the best428value to customers, that was a corporate death sentence. As429Spirit Airlines explained in its legal filings, the company430went under because, quote, ``recent geopolitical events have431resulted in a massive and sustained increase in fuel prices.''432    Desperate to avoid any mention of Donald Trump's calamitous433and historic blunder in Iran, which has split the Republican434party, my colleagues today have decided instead, somewhat435comically, to blame overzealous antitrust enforcement.436    Americans are paying more today for groceries, gasoline,437healthcare, housing, utilities, and, yes, airfare. At the same438time, a vanishingly small number of companies is thriving.439Consider the S&P 500, a stock market index of 500 publicly440traded U.S. companies. Last month, The Financial Times441published an analysis showing that just five of those 500442companies, or one percent, accounted for 50 percent of the443growth of the index.444    In the airline industry, the story of lopsided growth and445economic concentration is the same. In 2000, the four largest446carriers controlled roughly 60 percent of domestic traffic.447Today they control about 80 percent.448    One merger after another has consolidated the market power449of the four major airlines: American, Delta, Southwest, and450United.451    The result: Higher prices, lower wages, and growing452profits. Protecting competition requires regulators willing to453say ``no'' to corporate consolidation.454    In 2023, the DOJ blocked JetBlue's attempted acquisition of455Spirit.456    The result: Spirit continued to operate as an ultra-low-457cost airline, offering consumers lower prices than competitor458airlines, and driving down the price of tickets on competitors.459    The Economists called this, quote, ``the Spirit effect.''460When an ultra-low-cost airline like Spirit operates a route,461the price of tickets on legacy carriers, like American, drops462by an average of 21 percent. As Judge Young, the Reagan-463appointed judge who upheld the DOJ decision to block the464Spirit-JetBlue merger, explained, quote,465466        If JetBlue were permitted to gobble up Spirit, at least as467        proposed, it would eliminate one of the airline industry's few468        primary competitors that provides unique innovation and price469        discipline. It would further consolidate an oligopoly by470        immediately doubling JetBlue's stakeholder size in the471        industry. Worse yet, the merger would likely incentivize472        JetBlue further to abandon its routes as a maverick, low-cost473        carrier.474475    The DOJ's actions in 2023 protected consumers from476increased costs by focusing airlines to continue competing with477Spirit and its ultra-low airfares until skyrocketing prices478caused by Trump's disastrous war in Iran caused the airline to479collapse. Yet, our colleagues have taken the wrong lesson from480this story, claiming we need less antitrust enforcement rather481than more.482    This is alarming because under the Trump Administration,483antitrust enforcement has already been twisted and corrupted484beyond recognition. Instead of being a tool to protect485competition and innovation and to prevent companies from486abusing their market power over consumers and workers, it's487become just one more grift perpetrated by the President and his488enablers for their own purposes of wealth maximization.489Antitrust practitioners talk about the Trump transaction tax,490the recognition that merger approval depends less on objective491considerations and competition factors and more on a company's492willingness to curry subjective political and financial favor493with the President and the money-making operation being494conducted at the White House.495    The warning signs of gangster State crony capitalism are496everywhere. In the last 12 months, this administration has497cleared the Nexstar-Tegna local broadcast merger which will498undermine the diversity of independently owned news operations499and which a coalition of State AGs has already obtained a500preliminary injunction to halt.501    It has settled the Live Nation Ticketmaster case with terms502so favorable to Live Nation that the basic sweeping harms to503artists, venues, and millions of fans remain largely504unaddressed. It cleared the Paramount Skydance Warner Brothers505discovery deal before career investigators had even completed506their antitrust analysis. Every senior antitrust official who507has cried foul over this pattern of concentration, including508Assistant Attorney General Gail Slater at Department of509Justice, and her principal Deputy Attorney General, Roger510Alford, has been pushed out or fired for the offense of simply511doing their jobs, the jobs they signed up to do and which the512law requires of them.513    The consequences of this anti-antitrust corruption and514promono-515poly favoritism are simple: Corporations pass the Trump tax516onto consumers. We pay higher prices for fewer choices, less517competition, less innovation, and more instability. Instead of518concocting a cover story for the President, which blames Biden519for the disastrous consequences of the Trump tariff and the520Trump war in Iran, we should be doing serious oversight of an521antitrust enforcement system that has been thoroughly smashed522up in this administration.523    Thank you, Mr. Chair. I yield back.524    Mr. Fitzgerald. The gentleman yields back. Without525objection, all other opening statements will be included in the526record.527    We will now introduce today's witnesses.528    The Honorable Chris Sununu. Mr. Sununu is the President and529CEO of Airlines for America, a trade association of U.S.-based530passenger and cargo airlines. He previously served as the531Governor of New Hampshire and as a member of the Executive532Council of New Hampshire, and worked as an environmental533engineer.534    Mr. Timothy Ravich. Mr. Ravich is a Senior Counsel at535Tressler where his practice focuses on aviation, aerospace,536airport, and commercial litigation. He previously was the537General Counsel of an unmanned aerial systems company, has led538research on matters affecting air space operations and safety539for the National Science Foundation, and the National Academies540of Science, Engineering, and Medicine, and is an author of an541aviation law textbook.542    Mr. Christian Stout. Mr. Stout is Director of Innovation543Policy at the International Center for Law and Economics, where544his work focuses on competition, telecommunications, and545artificial intelligence policy. He previously worked as an546attorney, taught computer science at Rutgers University, and547held various roles at technology companies.548    Professor Nancy Rose. Ms. Rose is the Charles P.549Kindleberger Professor of Applied Economics at the550Massachusetts Institute of Technology. She previously served as551the Deputy Assistant Attorney General for economic analysis in552the DOJ's antitrust division from 2014-2016.553    We welcome our witnesses and thank them for appearing554today. We will be swearing you in at this point. Would you555please rise and raise your right hand.556    Do you swear or affirm under penalty of perjury that the557testimony you are about to give is true and correct to the best558of your knowledge, information, and belief, so help you God?559    Let the record reflect that the witnesses have answered in560the affirmative. Thank you. Please be seated.561    Please know that your written testimony will be entered562into the record in its entirety. Accordingly, we ask that you563summarize your testimony in five minutes.564    Governor Sununu, you may begin.565566          STATEMENT OF THE HON. CHRISTOPHER T. SUNUNU567568    Mr. Sununu. Well, good morning. Thank you very much. Great569to see everybody. Chair Fitzgerald, Ranking Member Balint, and570the Members of the Subcommittee. I see Chair Jordan has joined571us as well.572    My name is Chris Sununu. I am currently the President and573CEO of Airlines for America. Thank you for inviting me today to574testify on behalf of the airline industry, a sector that does575support millions of U.S. jobs and drives five percent of our576country's GDP.577    When examining the State of the airline industry, the578defining story over the past two decades is the extensive579expansion of consumer choice and travel options that continues580despite significant headwinds that industry has faced,581particularly over the last eight months.582    First, we were hit hard by two record-long government-583driven shutdowns, which cost the airlines billions and the584broader economy billions more, forced flight delays and585cancellations, all over political fights that have absolutely586nothing to do with our industry and hurt the American traveler.587Also, the increase in jet fuel prices due to the closure of the588Strait of Hormuz means that airlines will take an additional589financial hit of more than $8 billion this year. It is590aggressive competition that prevents airlines from passing all591those costs onto the consumers.592    Despite these hurdles, the airline industry remains a593highly dynamic marketplace where travelers enjoy a suite of594fare options and unprecedented flexibility in how they choose595to fly.596    A major catalyst for this variety has been the dramatic597expansion of airline business models. Twenty-five years ago, 60598percent of domestic passengers had access to low- and lower-599cost carriers. These days that has soared to 90 percent. Today,600the average number of competitors on domestic routes, it sits601at an all-time high with nearly half of all passengers602traveling in markets with four or more airline choices. That603range of options has never before existed for the American604traveler. It does today. At a time when Americans have spent605the last several years facing runaway inflation on basic606household goods, competitive airline pricing has bucked that607trend. Between 2019-2025, everyday consumer products rose by 26608percent, domestic airfares fell 3\1/2\ percent.609    Travelers are no longer forced into a one-size-fits-all610ticket. They have the freedom to customize their journey and611pay only for the services that they value. The number of612Americans flying is greater than ever before. In the 1970s,613about one in five Americans took a flight on any given year.614Today it's about one in two. Airlines continue to prove615themselves as an affordability success story for the American616public.617    The best part is that according to the April 2026 ASCI618survey, airlines are doing all of this with all-time high in619customer satisfaction. The recent Spirit Airlines bankruptcy,620as unfortunate as that was, was just the first airline621bankruptcy in the past 13 years, indicating stability for both622our workforce and networks. Airlines have actively used that623stability to reinvest over $24 billion annually every year back624into that customer experience. The people, the product, and the625planes.626    The upgraded products we invest in include everything from627upgraded WiFi and apps that give more control to the customer628to better airports, better food, and faster TSA screening. The629list goes on and on in terms of customer experience.630    Most importantly, airlines have invested in their people,631doubling the average wages and benefits since 2025, far632outpacing most any other industry in this country.633    Now, given this robust State of competition, it's clear634that the biggest threat to healthy and competitive airline635industry is our short-staffed and woefully antiquated air636traffic control system. Policymakers can enhance competition637not by overregulating an already very competitive industry, but638by focusing on building a new air traffic control system that639will be safer, allow for more flights, and increase choice for640the consumer. Congress must build on its $12.5 billion down641payment toward air traffic control modernization with the next642round of funding to ensure that technology gaps that have been643completely ignored for the last 30 years that they are finally644get addressed.645    Air traffic modernization is one of the few policies that646enjoys bipartisan, bicameral support as well as the support of647the nearly 60-member Modern Skies Coalition, consisting of648stakeholder organizations across the entire country. The649American traveler needs Congress to support policies that allow650this competitive marketplace to thrive, prevents additional651cost to the consumers, and ensures we continue to invest in the652safest airspace in the world. Thank you very much. I look653forward to the questions.654    [The prepared statement of Mr. Sununu follows:]655    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]656657    Mr. Fitzgerald. Thank you, Governor. Mr. Ravich, we now go658to you for your five minutes.659660                 STATEMENT OF TIMOTHY M. RAVICH661662    Mr. Ravich. Good morning, Chair Fitzgerald, Ranking Member663Balint, and the Members of the Subcommittee. Thank you for the664invitation and the privilege to speak with you today.665    As you heard from the kind introduction, my name is Tim666Ravich. I'm a Florida bar, board-certified lawyer working667currently with Tressler, LLP, which is a law firm in Chicago.668    President Reagan once said that the nine most terrifying669words in the English language are ``I'm from the government,670and I'm here to help.'' Yet, one of the most important671deregulatory reforms in American history was championed by672Senator Edward Kennedy during the Ford Administration and673signed into law by President Jimmy Carter.674    Airline deregulation was a bipartisan effort. That spirit675remains relevant today. We might agree that not every market676shortcoming requires a regulatory intervention. Regulation677provides benefits. It also carries costs. Aviation depends on678both competition and regulation. The title of today's hearing,679``The 30,000 Foot View: Competition and Regulation in the U.S.680Airline Industry,'' makes this point well. Every day, millions681of passengers and tons of cargo travel around the United States682safely and efficiently.683    The overwhelming majority of trips occur without incident.684The success is easy to overlook. In the nearly 50 years since685enactment of the Airline Deregulation Act, passenger traffic686has increased exponentially. Airfares has declined. Air travel687is available to far more Americans than it was before688deregulation.689    During the Senate hearings on airline deregulation decades690ago, Senator Kennedy recalled an East Boston constituent who691asked why he was holding the hearings about airlines when he692had never been able to afford to fly. Kennedy replied, quote,693``That's why I'm holding the hearings.''694    I often think of that story when I teach aviation law. At695the start of each semester, I ask my students whether they have696ever flown on a commercial airline. Every hand goes up. In697fact, it may be the only time all semester that happens, but698many seem surprised by the question itself. Of course they have699flown. That reaction says a great deal about how much aviation700has changed over the last half-century and how competition has701expanded access to air transportation for millions of702Americans.703    As titled, this hearing focuses on the right issue: When is704regulation necessary versus when markets should work freely.705The competition questions today are different from those706Congress confronted in 1978. Competition today is often shaped707less by fares and routes than by access, capacity, market708concentration, and mergers. These issues deserve attention.709Many competition decisions in commercial aviation occur not in710the air, but on the ground at airports. A carrier cannot711compete without access. Access to gates matters, access to712terminal matters and infrastructure matters. Competition also713requires capacity. No airline can compete with a flight it714cannot schedule, and no new entrant can compete without access715to gates, terminals, and airport infrastructure.716    The same is true in the National Airspace System. Airlines717can only compete through flights they are able to schedule and718operate. Discussions about air traffic control modernization719and capacity are, therefore, also discussions about720competition. Recent litigation involving the proposed721acquisition of Spirit Airlines by JetBlue Airways illustrates722another challenge: Competition policy often requires regulators723and courts to predict future markets and future competitors.724Those predictions are not always easy. As we approach the 50th725anniversary of the Airline Deregulation Act, the central726question before this body is whether and how regulatory law can727best encourage competition, innovation, and new entry.728    That question extends beyond today's airline industry.729Drones are here. Flying taxis, referred to as advanced air730mobility, are on the horizon. Commercial space transportation731is a reality. The issues we will discuss today--access,732competition, infrastructure, resource allocation, and yes,733regulation--will influence and are precedential as our Nation734explores the next frontiers in transportation. I look forward735to discussing these matters and answering the Subcommittee's736questions. Thank you.737    [The prepared statement of Mr. Ravich follows:]738    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]739740    Mr. Fitzgerald. Thank you, Mr. Ravich. Mr. Stout, you may741begin.742743                  STATEMENT OF KRISTIAN STOUT744745    Mr. Stout. Chair, Ranking Member, and the Members of the746Subcommittee, good morning. Thank you for having me. I am the747Director of Innovation Policy at the International Center for748Law and Economics, and my work focuses on how law and749regulation shapes competition.750    I have filed a longer written statement, so let me make one751central point and give three examples.752    My central point is this: Many of the most important753barriers to airline competition arise from policy choices, not754from the airlines themselves. The most procompetitive things755Congress can do is to clear policy bottlenecks, not pile on new756ones.757    The first example is Spirit. In January 2024, a Federal758court blocked the JetBlue-Spirit merger to protect competition.759The government won the case, and then it lost the carrier.760Spirit went bankrupt twice and shut down this May, a 34-year-761old airline gone, and with it, the Spirit effect, the downward762pressure its low fares put on every competitor in the market.763    I am not here to say the Justice Department killed Spirit764by itself. An engine inspection crisis, high-fuel costs, and765the big carriers copying Spirit's product all played a part as766well. The point is narrower. The legal framework was too static767for a visibly fragile firm in a capital-intensive industry, and768it failed in two ways that are worth your attention.769    First, the court itself found that a stronger JetBlue would770have competed harder against the Big Four carriers that fly771most Americans, a benefit to the broad flying public. Under the772old any-market analysis of cases like Philadelphia National773Bank and Topco, harm to the most price-sensitive travelers on a774handful of routes control the entire outcome, no matter how775large the nationwide benefit. The court blocked a merger it776appeared to be regarded as good for competition overall, to777preserve route-level rivalry, the market then itself erased.778    Second, the failing firm defense asks a yes-or-no question:779Is the company about to collapse with no possible buyer? Spirit780could not meet that strict test in early 2024, so the court781treated it as a healthy, durable competitor that would keep782disciplining fares indefinitely. Eighteen months later, it was783liquidated. That is the flaw. In a capital-intensive industry,784shock-prone, the real question is not whether a carrier has785already failed, but how likely it is to still be competing in786five or 10 years from now. Merger analysis for network787industries needs a probability-weighted view of a firm's788durability and consistent credit for out-of-market benefits.789    My second example is airport slots. At the most congested790airports, the FAA rations every takeoff and landing through791slots. Decades ago, those slots were handed to incumbent792carriers for free and locked in by grandfather rights. They793function as property in a sense; bought, sold, and pledged as794collateral worth tens of millions of dollars. Yet, a new795airline cannot simply decide to add service, and use-it-or-796lose-it rules push carriers to fly near-empty ghost flights797just to keep their slots. Where low-fare entry is actually798allowed, fares fall about 17 percent. The FAA already waives799these rules at times, so it plainly has the power to move800toward real slot markets.801    My third example is the accumulation of consumer protection802mandates. Let me be clear. First, I am not against protecting803consumers. Airlines run on operational flexibility; the freedom804to cancel, swap aircraft, rebook passengers when weather and805mechanical problems hit. Every mandate that turns a judgment806call into a legal obligation converts a manageable risk into a807fixed cost. A wave of recent rules, like automatic cash refunds808and proposed European-style compensation regime, free family809seating, new fee disclosure requirements--each of these hits810hardest at the unbundled ancillary revenue model that lets811budget carriers like Spirit operate flexibly.812    For a legacy airline like United or American, any one of813these is a friction. For an ultra-low-cost carrier on razor-814thin margins, the pileup of these mandates can become fatal.815The Fifth Circuit has already held that one of these rules816likely exceeds the Department's legal authority, a question817squarely within the Subcommittee's jurisdiction.818    My recommendations come down to discipline and humility.819Modernize merger analysis for network industries, open820underused slots to new entrants, and put every operational821mandate through rigorous cost-benefit review tied to a real,822demonstrated problem. The competition we are missing in823industry is mostly foreclosed upstream by runways that the824government rations, by capital that it walls off, and by825mandates that fall hardest on the carriers least able to bear826them. Spirit's empty gates are a reminder that preserving a827competitor on paper is no substitute for letting competition828work in fact.829    Thank you. I look forward to your questions.830    [The prepared statement of Mr. Stout follows:]831832    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]833834    Mr. Fitzgerald. Thank you, Mr. Stout. We now recognize835Professor Rose.836837                   STATEMENT OF NANCY L. ROSE838839    Ms. Rose. Chair, Ranking Members, and the Members of the840Subcommittee, thank you for inviting me to testify. I've spent84140 years studying competition, antitrust, and regulation,842including in the airline industry, and have served as the843Deputy Assistant Attorney General for economic analysis in the844antitrust division. I'd like to make three points, drawing from845my written testimony today.846    First, antitrust did not kill Spirit Airlines. Let me say847that again because I think you've heard the opposite alleged.848Antitrust did not kill Spirit. Spirit's own leadership, as849you've heard, identified the cause as sudden, sustained spike850in jet fuel prices due to the Iran war that added hundreds of851millions of dollars in costs.852    Instead, antitrust kept Spirit flying two years longer than853if JetBlue had been allowed to complete its merger and854eliminate Spirit's consumer-friendly pricing. That mattered not855only to Spirit passengers, but to everyone who flies. Spirit,856as you've heard, pioneered the ultra-low-cost carrier model in857this country, and its presence on the route forced other858airlines to lower their fares, often by 10-20 percent or more,859what's been called the Spirit effect.860    For many travelers, Spirit was not a preference, it was the861only air travel they could afford. As one Spirit customer862recently put it, ``We don't fly Spirit because we're cheap. We863fly Spirit because we're broke.'' JetBlue never intended to864preserve that model. Its own deal modeling removed seats,865repainted the planes, and increased fares by 30 percent.866    As you've heard, after hearing that evidence, Judge Young867found Spirit to be a uniquely disruptive competitor important868to a particular segment of cost-conscious customers, and he869blocked the deal. That was not overreach. That was the Clayton870Act working as Congress intended.871    Nor was this a failing firm case. The parties did not mount872that defense at trial. Spirit's executives testified that the873company had a plan to return to profitability. It's difficult874to predict the future, but they had a plan. There had been875another bidder, Frontier, that management preferred because it876recognized that Frontier would preserve the ultra-low-cost877carrier model without the antitrust risk that JetBlue's offer878presented.879    When people argued that DOJ should have waived the deal880through because Spirit was failing or flailing, we need to881recognize the danger in that argument. It would encourage882stronger rivals to rough up competitors and buy them out,883precisely when consumers most need those competitors to884survive.885    Second, this is not just about airlines. Competition886concerns in the airline industry are a window into a much887larger problem. Across the economy, consolidation has often888left families with fewer choices and higher prices. Four firms889dominate cattle buying in the U.S., leaving many ranchers with890only a handful of buyers and Fourth of July hosts paying more891for the burgers that they're grilling. Three pharmacy benefit892managers control nearly 80 percent of U.S. prescriptions. Their893integration with insurers and pharmacies has forced higher894prices throughout the system. Hospital systems have merged and895then bought up physician practices, and recent research finds896that those acquisitions raise physician prices by 15 percent897with no clear improvement in quality.898    These are pocketbook issues, what families pay for899groceries, medicine, or doctors' visit. Strong, evidence-based900antitrust enforcement is one of the tools that we have to keep901competition and prices affordable, as did the FTC and a902bipartisan group of State AGs when they successfully blocked903the Kroger-Albertsons supermarket merger.904    Third, antitrust must remain vigilant and independent. When905I was at the antitrust division, every new employee heard the906same message on day one and repeated often: Antitrust is law907enforcement. We call balls and strikes based on the evidence,908not on personal preferences, political pressure, or who has909access in Washington. That principle has been under strain. In910the last year, we've seen a very troubling pattern: Senior911antitrust officials fired after privately objecting to an912inadequate settlement forced from above, the President913personally weighing in to support a media merger, a914monopolization case against Live Nation secretly settled mid-915trial by senior DOJ officials and White House counsel on terms916so favorable that Live Nation's share priced popped six percent917on the announcement.918    Fortunately, in that case, Attorney Generals from 33 States919and the district leapt in to assume the litigation lead and920kept the trial moving forward to a jury that found for the921plaintiffs on every claim.922    From the outside, it looks like there's a ``Justice for923Sale'' sign hanging on the fifth floor of the RFK building.924That should alarm us all, regardless of our party or our925ideology. When companies believe that they can buy an outcome926in Washington instead of competing on the merits, we all lose.927When antitrust becomes a tool of political favor or disfavor,928the predictable environment that businesses need to invest is929undermined.930    Surely, we can find bipartisan support for rigorous,931evidence-based, politically independent antitrust enforcement932that protects the American consumer, the American worker,933honest businesses, and the competitive process itself.934    [The prepared statement of Ms. Rose follows:]935    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]936937    Mr. Fitzgerald. Thank you, Professor. We'll now proceed938under the five-minute rule with questions. I first recognize939the gentleman from California, Mr. Issa, for five minutes.940    Mr. Issa. Thank you, Mr. Chair. Professor Rose,941notwithstanding those political comments you made at the end of942your opening statement, as a professor, would you say that the943No. 1 challenge that creates an antitrust situation is not lack944of competition, but is the, in fact, barrier to entry? In other945words, if someone begins to assert some benefit from a monopoly946or near monopoly, it is, in fact, the barrier to entry that947keeps others from coming in, whatever that barrier is. Is that948a basic principle of economics and antitrust?949    Ms. Rose. I teach my students that there are three--950    Mr. Issa. Ma'am, that was a yes or no, if you don't mind.951    Ms. Rose. Oh. Then no.952    Mr. Issa. Oh. OK.953    Mr. Stout, I'm going to go for a differing opinion. The954fact that Spirit's gates are all being sold off to competitors955is that, in fact, by definition, as great or greater a barrier956to entry than, in fact, the consolidation under the previously957asked for one or the other mergers would have been? Meaning958that the gates that were not shared, the gates that were959expanded, the ability of--we'll just take JetBlue as the960example. Those gates were a major factor--not the aircraft, not961the pilots, all of which are important, but ultimately, access962to routes, bases, and operations, in fact, are sometimes the963hardest to get at the most desirable airports. Isn't that true?964    Mr. Stout. From my understanding, that's correct.965    Mr. Issa. As we're looking at antitrust relative to966aviation, and I'm going to go to the Governor in a moment, we967are looking at whether the opportunity for competition is968there, every bit as much as the professor's narrow theory that969an entity that was losing money because they said we'd like to970turn around, we hope to turn around, we have a plan to turn971around, somehow was a perfectly good reason to take a money-972losing airline and not sell it to an airline that might, in the973combination, make money.974    Mr. Stout. Your question is allowing competitors to enter,975would that have helped offset some of the concerns about that976transaction? Is that correct?977    Mr. Issa. Correct.978    Mr. Stout. I believe that's correct.979    Mr. Issa. Second, in your opening statement, you said980something that was very profound. Everytime we in Washington or981our agencies create new rules, new nice-to-have, socially982interesting, and responsible rules, we do not disfavor the983large airlines. We, in fact, hurt the very entities like Spirit984that want to offer a low budget and do not necessarily have the985means of a United or American. Is that correct?986    Mr. Stout. Yes. I believe that is correct.987    Mr. Issa. Thank you. Governor, welcome. For more than 12988years, you led a State successfully. You're now looking at a989myriad of companies that are struggling against international990competition. Now, this is an antitrust hearing, and we will991focus on that more than anything else today. If, in fact, the992relevant market are the domestic airlines, the four plus a993plethora of smaller airlines, and we ignore global giants,994including ones backed by their governments, do we, in fact,995almost guarantee the demise of the U.S.-based airline industry996as we know it?997    Mr. Sununu. Absolutely have to keep in mind that when you998look at the worldwide market, you have so many actors out there999that are State sponsored, they're State supported, State1000subsidized, and they aren't free markets. Again, to ignore that1001fact on a competitive basis would definitely be to our demise.1002We are competing against entire governments--as individual1003airlines, we are effectively competing against the financial1004wherewithal of entire governments.1005    Mr. Issa. Now, I'm going to touch on the same subject that1006I didn't get the answer I wanted from the professor on. If we,1007the Federal Government, use our ability to lean into expanding1008routes, modernization, and places to put the aircraft when1009they're on the ground, if we modernize that and make more of1010them available, will we inherently give an ability for entrants1011to new and competitive airlines?1012    Mr. Sununu. Absolutely. I think Breeze is a good example. I1013don't represent Breeze, but Breeze is a fairly new airline1014opening up at gates that might not be traditional airports.1015Gate access and slot access and competition there is very1016important.1017    Mr. Issa. Thank you. Mr. Stout, with the remaining time,1018should this Committee look at referring to the other Committees1019of jurisdiction the idea that we do lean into that, and we also1020look at the barriers created by overregulation, maybe even a1021two-tier system to allow smaller airlines to waive those large1022mandates?1023    Mr. Stout. I think that's right. If we find ways to1024introduce markets into slot access, that we could have a lot of1025procompetitive benefits.1026    Mr. Issa. Thank you. I yield back.1027    Mr. Fitzgerald. The gentleman yields back. I now recognize1028the Ranking Member of the Full Committee, Mr. Raskin again, for1029five minutes.1030    Mr. Raskin. Mr. Chair, thanks much. Professor Rose, as a1031professor, you give grades, right?1032    Ms. Rose. I do.1033    Mr. Raskin. What grade would you give the antitrust1034enforcers in the Trump Administration today?1035    Ms. Rose. I would have to fail them.1036    Mr. Raskin. What letter grade would that be?1037    Ms. Rose. ``F.''1038    Mr. Raskin. Give them an ``F''?1039    Ms. Rose. I do. I don't give that very often at MIT, but in1040this case, I think it's fully merited.1041    Mr. Raskin. What's your justification for that?1042    Ms. Rose. That we no longer have an antitrust enforcement1043agency at the Department of Justice that's based on principles1044of evidence. It seems, instead, to be based on principles of1045either who has the Administration's ear or their willingness to1046pay.1047    Mr. Raskin. It's a game of political influence rather than1048objective economic factors.1049    Ms. Rose. As an outsider, it appears to be the case.1050    Mr. Raskin. I saw an article a couple days ago in The Wall1051Street Journal titled, ``They can't fly Spirit anymore so1052they're taking the bus instead.'' It reported that Greyhound1053and other bus services saw passenger traffic increase 301054percent on the 130 routes that they had shared with Spirit.1055What does that surge in bus travel say about the importance1056that Spirit Airlines had for air travel?1057    Ms. Rose. That's exactly what I alluded to in my testimony,1058that Spirit was really focused in this model of stripping down1059fares to be the lowest possible. Other airlines, while they're1060making inroads into that, do not have the same impact. Many1061passengers who flew on Spirit could not afford the higher fares1062at other airlines. As a consequence, they're either not flying1063or not making the trip.1064    Mr. Raskin. Are you basically saying that the combination1065of terribly foolish policy decisions, like the unilateral1066illegal tariff war against the world and the unilateral illegal1067war in Iran, with the consequent jump in oil and gasoline1068prices, combined with weak antitrust enforcement, is causing1069this massive consolidation within the business economy?1070    Ms. Rose. It's definitely contributing to it.1071    Mr. Raskin. What are some of the problems associated with1072high levels of concentration and consolidation?1073    Ms. Rose. Particularly, when consolidation or concentration1074happens because you're buying up your competitors, you tend to1075see higher prices, lower quality, less choice for consumers,1076and I think that follows right through to pocketbook issues1077that households are facing.1078    At the same time, you may see also workers have less1079ability to compete for their services with employers. You can1080also see wages going down and workers--1081    Mr. Raskin. Can you explain that a little bit further?1082People understand why the diminished competition is terrible1083for consumers, but how do workers in the industry suffer from1084that kind of economic concentration?1085    Ms. Rose. Let's say we've got three employers right now1086that are possible options for someone with my particular skill1087set. If we allow a merger between two of those, now I've only1088got two choices. The employers recognize that reduced1089competition. They don't have to compete as hard to get me to1090work for them. They don't have to pay me as much.1091    Mr. Raskin. The parties justified the merger is needed to1092allow them to compete better with the Big Four airlines. Some1093written testimony argues for antitrust giving these cross-1094market efficiencies weight in making antitrust decisions. Can1095you explain, in simple terms, what this is and whether or not1096you support that analysis?1097    Ms. Rose. Yes. It's a backdoor way to reintroduce the1098Borkian argument, the arguments Robert Bork made, which was to1099try and broaden the spectrum so large, so wide, that you1100couldn't really enforce the antitrust laws effectively.1101    What it's saying is, we might have some consumers who1102benefit and some who are harmed by the merger. Instead of1103recognizing that the antitrust laws say a merger is illegal if1104it substantially reduces competition in any relevant market, we1105should say, ``Well, don't worry about those consumers that are1106being harmed. They're not able to pay very much for their1107airfare anyway. They don't have very much income. They don't1108have very much demand. Let's instead protect the business1109travelers who would like to have the kind of expanded JetBlue1110options.''1111    It's an argument you could make. It's not what our current1112antitrust system says, and it would be an enormous mistake to1113go to that.1114    Mr. Raskin. What would you say up until now the major1115antitrust decisions have been by the Trump DOJ officials, who1116you graded ``F,'' and what are the specific effects of those1117decisions?1118    Ms. Rose. Well, we're seeing consolidation in media1119markets, both--take Paramount-Skydance, which has just been1120cleared, but also these local broadcast stations. That's going1121to increase advertising rates. It's going to reduce the1122diversity of views. It's going to make it more difficult for1123local broadcasters to sustain newsrooms. That's going to be a1124cost both in terms of the information that we have and in terms1125of the people who work in that market, and in terms of people1126who are looking to that for their news and their information1127content.1128    In other markets, like the Ticketmaster--the Live Nation1129Ticket-1130master monopolization case, we're going to see continued abuse1131of consumers and higher fees.1132    Mr. Fitzgerald. The gentleman's--1133    Mr. Raskin. Thank you, Mr. Chair.1134    Mr. Fitzgerald. The gentleman yields back. I now recognize1135the gentleman from North Carolina for five minutes.1136    Mr. Harris. Thank you, Mr. Chair, and I thank all of you on1137the panel for being here today.1138    Governor Sununu, thank you for coming to testify today. I1139want to take just a moment to talk about the past interactions1140Congress has had with the airline industry. We've already1141touched on it this morning that Congress passed the1142Deregulation Act in 1978. The goal was free up the airline1143industry from the burdensome, inefficient government boards1144that dictated the fares, routes, and new entry to the market.1145    I'd really like to know, from your experience, how did the1146Airline Deregulation Act change the way, in your mind, that the1147airline industry is regulated? How did that deregulation really1148benefit customers?1149    Mr. Sununu. Well, again, it opens up a true free market as1150opposed to having the government decide what the fares are1151going to be and who can have what routes. Free market1152competition works, without a doubt. The proof in that is just1153let's go to pricing. I'm a big believer that nothing shows1154competition more than the price. In the late 1970s, let's call1155it what it was. Basically, rich White people could fly on a1156plane, right? Today, almost any American, through a variety of1157different ways, can afford to fly from point A to point B. We1158have ultra-low-cost carriers. We have multiple routes. We have1159more competition if you want to go to--and that's the other1160definition of competition that's very important here. It's not1161just the overall number of carriers. When I go to buy a ticket,1162oh, I have four, five, or six carriers going from Wichita to1163Dallas. Now, they're all competing on that exact same route. We1164have more competition per route than ever before. That is1165allowed now, right? Because they can compete freely, and it's1166not the government saying, ``Well, you're going to go here, and1167you're going to go there.''1168    On pricing alone, it has been a game changer. On low-income1169and everyday Americans, it's been an absolute game changer. On1170the ability for the airlines themselves to create their own1171models, one of the challenges I would say Spirit has--they had1172a lot of challenges. There's a lot of reasons Spirit went1173bankrupt. One of the challenges was some of the bigger carriers1174said, ``we're going to compete.'' We're going to provide a1175basic economy ticket that we didn't provide before at a very1176low-cost level, and the government doesn't get involved in the1177economics of that, to provide more options. It isn't just one1178carrier for low-income families or folks that don't have the1179money to spend for the extra frills. More carriers were1180competing at a lower cost level. That's all because of the1181deregulation opportunities that came from the late 1970s.1182    Mr. Harris. In that same vein, in what ways would you say--1183I know part of this hearing is looking at when to regulate and1184when not to regulate or deregulate. In what ways do you think1185Congress maybe specifically could further deregulate the1186airline industry to benefit consumers?1187    Mr. Sununu. One area where the airlines have taken a clear1188position; first, the airlines do a lot for their customers,1189right? They put over $1 billion of their own money into1190compensation. They already have massive refund policies. Please1191understand there's a big difference between a refund--your1192flight didn't take off, you get your money back--and1193compensation, which is like the punitive penalty. The airlines1194and some of the regulatory proposals that we've seen in the1195past basically said, ``We're going to penalize you for acts of1196God. There's a huge weather storm. The plane didn't take off.1197You now have to write not just a refund but compensation on top1198of that.'' Right? An airline wanted to change their tail number1199for a certain reason. Oh, that's a canceled flight. No, the1200flight isn't canceled. We're just changing the tail number.1201Nope. The previous administration said, ``No, that's going to1202count against you as a''--so it's things that are out of our1203control which then burden us which, ultimately, those costs1204probably get passed down to the consumer.1205    That's been the hardest part. We're an industry that has an1206average profit margin of 4\1/2\ percent. Virtually every dollar1207the airlines make go back into airports and better products and1208all that sort of thing. Additional regulations--right? Some1209regulations have value. All regulations have cost. Right? You1210have to understand that kind of the pros and the cons there,1211and those costs, ultimately, unfortunately, would probably have1212to go down a lot to the customers. More regulation can be very1213burdensome for the customer in terms of cost.1214    Mr. Harris. Thank you, sir. Mr. Ravich, in my final minute1215here, I want to touch base with you on this topic of cabotage,1216if I may, and referring to the practice of a foreign air1217carrier operating between two U.S. airports. Under current law,1218I'm told the United States only allows for cabotage when1219authorized by the Secretary of Transportation. How might1220cabotage increase competition and benefit consumers, Mr.1221Ravich?1222    Mr. Ravich. Congressman, thank you for the question.1223    Cabotage is a maritime term, the concept being that a1224foreign carrier can operate domestically. British Airways could1225fly from Tampa to Toledo or something. You would have1226competition. You'd have more firms in the marketplace1227potentially, perhaps an infusion of capital, and all the1228competition that flows there from.1229    The issue, of course, is what's already been referred to,1230which is how those carriers are subsidized or sponsored. There1231are some national security concerns. It is something worthwhile1232to at least explore and understand how you might get more firms1233into the marketplace.1234    Mr. Harris. Very good. Thank you. With that, Mr. Chair, I1235yield back.1236    Mr. Fitzgerald. The gentleman yields back. I now recognize1237the gentlewoman from Vermont for five minutes.1238    Ms. Balint. Thank you, Mr. Chair. I thank the witnesses for1239your time today.1240    Professor Rose, in April, Transportation Secretary Duffy1241said, quote, ``There is still room for mergers in the aviation1242industry.'' I want to get your take on that. Do you agree with1243that assessment? Still room for mergers?1244    Ms. Rose. There may be, but only in a very specific part of1245the market. I do not anticipate that there is room--if you care1246about competition--for the Big Four to be acquiring additional1247carriers.1248    There could be an argument--the two of the smaller carriers1249who don't have much overlap, have complementary networks, might1250be stronger if they merged operations. That would have to be1251something that you'd look at carefully at the evidence. I1252wouldn't want to rule it in and out. It's very important that1253you look at where there's room to merge, and I don't see that1254at the top.1255    Ms. Balint. That's an important distinction. You have1256touched on this, but just to make it really clear for my1257constituents back home. From your perspective, what would be1258the effects of further mergers in an industry that's already1259incredibly consolidated?1260    Ms. Rose. We're just going to see higher prices. I want to1261make this point that while it is true that airfares in real1262terms have declined, we've seen dramatic reductions in airfares1263over time due to some of the benefits of opening up1264competition. That doesn't mean that the fares we're seeing1265today are as low as they might have been had we not allowed the1266industry to consolidate. There is interesting economic work1267that's been done that suggests that the Big Four, in1268particular, are behaving in a much more coordinated pricing,1269live and let live fashion that's raising airfares on routes1270that they compete on.1271    Ms. Balint. I share those concerns. I'm wondering if we1272could turn for a moment about low-cost and ultra-low-cost1273carriers, the ULCCs that people have talked about today.1274There's research that argues that the presence of a ULCC in a1275market or on a specific route decreases base fares by as much1276as 20 percent. Earlier this year, there were press reports that1277two ULCCs, Sun Country and Allegiant, may combine.1278    What effect do these ULCCs play in the market? How would1279further consolidation among the ULCCs impact flyers across this1280country?1281    Ms. Rose. Again, it depends on whether they're currently1282competing or whether they have complimentary networks with not1283much competition. If it's the latter, they could expand their1284operations, maybe they operate more efficiently because of that1285scale, and they could extend that benefit to more markets, that1286would be great. It's important how they affect markets, they do1287it two ways.1288    First, they offer consumers who buy tickets on their1289flights much, much lower fares.1290    Second, as we mentioned before, they force incumbent1291airlines on the routes that they enter to reduce their fares.1292That's extending the benefits across a wide set of flyers, many1293of whom would never have purchased a ticket on the--1294    Ms. Balint. I agree. I want to touch on how companies are1295navigating the Trump Administration's antitrust approach as it1296were. Antitrust defense lawyers are telling their clients they1297should hire lobbyists and political fixers with close1298connections to the White House to get their deals past1299antitrust enforcers. We've heard from whistleblowers, like1300Roger Alford, who have described a pay-to-play environment in1301DOJ antitrust.1302    When you were at DOJ, Professor Rose, especially in your1303time working on the JetBlue-Spirit case, did the President ever1304lay in with you or your team?1305    Ms. Rose. Absolutely not. In fact, we weren't even allowed1306to be at meetings with White House officials, not related to1307antitrust topics, but if it was for a sector where we had an1308antitrust investigation going on.1309    Ms. Balint. From your perspective, this is outrageous. The1310shift is completely and totally outrageous?1311    Ms. Rose. Absolutely.1312    Ms. Balint. Why is it so important that this doesn't1313happen, that you don't have a President interfering?1314    Ms. Rose. Because if we have a pay-to-play system, both1315businesses that want to operate honestly, effectively, and1316consumers and workers all lose. We're subject to the capricious1317whims of whoever's willing to pay more to get the outcome that1318they want.1319    Ms. Balint. I agree. We have bipartisan agreement in this1320room that air travel--maybe we do, maybe we don't, actually,1321now that I listen to some of my questions from my colleagues.1322    If you ask regular Americans, they think things aren't1323working very well for them in the flying public. History has1324shown us that Congress has policy levelers that we can pull1325here. Whether it's a return to a pre-1978 regulation model or1326stronger oversight or passing laws to break up these massive1327airlines, the traveling public wants change.1328    We all fly every week. I can tell you, when I'm sitting in1329that waiting room, I don't hear people saying things are1330working great here, we feel really great about the state of the1331airlines today.1332    I turn to you, Professor Rose, for a final word. What1333should Congress do to ensure a more competitive industry going1334forward?1335    Ms. Rose. Keep our eye on the ball with respect to1336antitrust. Some of these arguments about how to expand1337infrastructure, reducing barriers to entry could be an enormous1338benefit.1339    Ms. Balint. Thank you, Professor Rose. I yield back.1340    Mr. Fitzgerald. The gentlelady yields back. I now recognize1341the Chair of the Full Committee, Mr. Jordan, for five minutes.1342    Chair Jordan. Thank you, Mr. Chair. Mr. Stout, there are1343four big players, right, four big airlines?1344    Mr. Stout. Yes.1345    Chair Jordan. United, Delta, and American. Then, Southwest1346is big, but not quite as big as the other three. Is that right?1347    Mr. Stout. That's correct.1348    Chair Jordan. Then, there's a second category, this low-1349cost carriers, sort of in the middle. That's people like1350JetBlue and airlines like that. Then, you have the super-low1351cost, the ultra-low cost: Frontier, Allegiant, and others,1352right?1353    Mr. Stout. Correct.1354    Chair Jordan. That's the state of play?1355    Mr. Stout. So far, yes.1356    Chair Jordan. OK. Oe of the guys in the middle was going to1357buy one of the guys in the smaller category. Is that right?1358JetBlue was going to buy Spirit.1359    Mr. Stout. That's right.1360    Chair Jordan. OK. By the way, what are the Big Four? What1361percentage of the airline industry is the Big Four?1362    Mr. Stout. The numbers I've seen are about 75 percent, but1363I've heard 80 or a little bit lower--1364    Chair Jordan. Seventy-five to 80 percent. So pretty big.1365Then, the JetBlue-Spirit was going to be what percentage of the1366business then?1367    Mr. Stout. I don't remember the exact number.1368    Chair Jordan. If that merger would have happened--1369    Mr. Stout. It was a much smaller percentage.1370    Chair Jordan. Yes, but I heard like 10 percent?1371    Mr. Stout. It was something like that, yes.1372    Chair Jordan. All right. This is proposed a couple of years1373ago, like three or four years ago. A couple years later, it's1374like the Justice Department sues; says, no, you can't do it,1375this is bad; Ms. Rose says it's terrible, and it all falls1376apart. Is that right?1377    Mr. Stout. That's correct.1378    Chair Jordan. We've got this famous tweet now from Senator1379Warren. She said,13801381        I've warned for months that a JetBlue-Spirit Airlines merger1382        would have led to fewer flights and higher rates.13831384Seems to me now that Spirit's went out of business, we have got1385fewer flights and higher rates. Is that true?1386    Mr. Stout. I believe that is correct.1387    Chair Jordan. Yes. Maybe if they'd have merged, we wouldn't1388have that, right?1389    Mr. Stout. That's correct.1390    Chair Jordan. Yes. Ms. Rose said, ``JetBlue was going to1391raise prices 30 percent.'' Would raising prices by 30 percent1392still be lower than the Big Four?1393    Mr. Stout. It would, and it would also still provide1394airline services where now there's none.1395    Chair Jordan. Right. Right. There would still be lots of1396employees at Spirit probably still working.1397    Mr. Stout. Right. Effectively, the price is infinite now1398because there is no option.1399    Chair Jordan. How many Spirit employees lost their job, do1400you know?1401    Mr. Stout. I actually don't have that number, sir.1402    Chair Jordan. Seventeen thousand people lost their job1403because the Biden DOJ said, ``no, we don't want a middle-class,1404lower-cost airline buying a super low-cost airline.'' Even if1405they raised prices 30 percent, it's still lower than the Big1406Four. They would account for 10 percent of the market and be1407able to compete against the 80 percent. What am I missing in1408there? Is that accurate?1409    Mr. Stout. No, I think that's accurate.1410    Chair Jordan. Yes. The Biden Administration said, ``no, we1411can't do that.'' Elizabeth Warren even said it's going to help1412consumers, when today, in fact, because Spirit's out of1413business, there are less fights--less flights, less people1414working, 17,000 thousand people out of a job.1415    Mr. Stout. That's correct, sir.1416    Chair Jordan. All they want to do is talk about the Trump1417Administration antitrust?1418    Mr. Stout. Well, part of the problem is that this is an1419antitrust doctrinal problem. The Biden DOJ was actually1420pursuing antitrust case law the way it is established. Part of1421what I've been trying to be here today to convey is that we do,1422in fact, need to think about out-of-market efficiencies when1423we're looking at these competition concerns. Because JetBlue1424providing more extended service was a benefit to consumers that1425was completely discounted under current antitrust doctrine.1426This Committee has the jurisdiction to solve that problem.1427    Chair Jordan. I think we do too. Mr. Ravich, anything you1428want to add to that?1429    Mr. Ravich. No, I would add something like this, which is1430Spirit is an example of deregulatory success. They created a1431completely fresh innovation that actually--1432    Chair Jordan. Fresh they named it after them, right?1433    Mr. Ravich. Right. Their yellow planes were remarkable.1434    Chair Jordan. They were so unique, so new that they1435actually called it the Spirit effect in the airline industry.1436Imagine that.1437    Mr. Ravich. Yes, sir.1438    Chair Jordan. Elizabeth Warren says, ``no, no, no, we're1439going to put them out of business, not let them continue.'' We1440can't let JetBlue buy. Oh, we can't have a merger. Because five1441big people competing would be somehow harmful to consumers when1442right now it's four big players. That makes no sense to me. I1443didn't mean to jump in. Keep going.1444    Mr. Ravich. No, I have nothing to add. Mic drop on that.1445    Chair Jordan. OK. Governor, you get the last minute to1446hopefully educate the Committee on why we need to do things the1447right way at the Justice Department versus how it was done1448before. Anything you want to add?1449    Mr. Sununu. You want me to free form?1450    Chair Jordan. Oh, yes.1451    Mr. Sununu. No, well, look, I would just--when we talk1452about--the one thing I've picked up here is, today, 46 percent1453of all passengers fly on low-cost or ultra-lost-cost carriers.1454That number was about 25 percent in the year 2000. It was about1455four percent around the time of deregulation. More people are1456flying on these other low-cost carriers and low-cost carriers1457than ever before, which is an opportunity. I would just1458caution, I know 75-80 percent has been thrown around. You have1459to be careful. That can be miles traveled, that can be number1460of flights. When you look at actual number of passengers, they1461have about 50 percent of--low-cost and ultra-low-cost carriers.1462That's a great thing.1463    Chair Jordan. Yes.1464    Mr. Sununu. Right? That increased competition with low-cost1465pricing has forced the big guys to create low-cost models that1466they traditionally didn't have to allow, again, more1467competition for lower-income families.1468    Chair Jordan. Imagine that. Competition in the marketplace.1469    Mr. Sununu. It works.1470    Chair Jordan. Imagine that. Mr. Chair, I yield back.1471    Mr. Fitzgerald. The Chair yields back. I now recognize the1472gentleman from Illinois.1473    Mr. Garcia. Thank you, Mr. Chair. As my Democratic1474colleagues have laid out, Republican attempts to blame the1475Biden Administration for the collapse of Spirit is nonsense.1476It's a distraction from the Iran war, which is illegal,1477unpopular, and cruel. It was fuel prices that was a major1478factor in Spirit going under. It's a distraction from the1479cesspool of corruption in the DOJ Antitrust Division and what1480it's become. It's a distraction from the real competition1481issues facing commercial aviation today.1482    Despite the rosy picture that Governor Sununu paints, only148331 percent of Americans have a positive view of the airline1484industry, and consolidation has fueled anticompetitive1485practices that are ripping off constituents like mine and1486hurting the aviation system.1487    We're seeing these practices, for example, at Chicago1488O'Hare, which is the only dual-hub airport in the country. That1489competition seems to bother United CEO Scott Kirby. Mr. Kirby1490has said that his long-term plan is for United to take over1491American's gates and threaten to add, quote, ``as many flights1492as are required,'' crowd out American.1493    After United tried to flood O'Hare with unprofitable1494flights, the FAA imposed a flight cap to address congestion1495that would have overstressed the system and jeopardized safety.1496This turf war and the flight cap likely influenced Southwest's1497decision to leave O'Hare and the decisions of low-cost carriers1498to reduce capacity there as well.1499    Professor Rose, how has airline consolidation and the rise1500of fortress hubs led to more anticompetitive practices like1501what we're seeing at O'Hare?1502    Ms. Rose. I want to first note that, as you did, how the1503airlines can confer benefits for local travelers by offering1504frequent nonstop service to many destinations. The economics1505literature shows that hub airlines can cement their market1506power and high fares by tactics to keep their rivals small or1507to force them out, as you've alluded to.1508    Chicago has long benefited from competition between two hub1509airlines at O'Hare, giving them the benefits of that intense1510set of offerings but constraining the anticompetitive effects.1511The evidence shows that United seems to be working to reduce1512those competitive constraints. Unchecked, it could have1513enormous adverse consequences for Illinois travelers.1514    Mr. Garcia. Thank you. I want to discuss another1515anticonsumer practice: surveillance pricing. Last year, Ranking1516Member Nadler and I demanded answers after Delta executives1517indicated that they were partnering with an Israeli AI pricing1518company to adopt surveillance-based pricing.1519    Governor Sununu, let me ask you, do any of your members1520charge individualized prices to consumers based on personal1521information, like purchase history, web browsing behavior,1522geolocation, social media activity, or financial status?1523    Mr. Sununu. One hundred percent absolutely not.1524Surveillance pricing is different than dynamic pricing. Dynamic1525pricing, virtually every industry uses surveillance pricing, as1526you've pointed out, looks at personal information. We1527absolutely do not participate in that.1528    Mr. Garcia. Well, since these companies claim that they're1529not engaged in surveillance pricing, would Airlines for America1530support legislation banning this practice?1531    Mr. Sununu. Banning surveillance pricing?1532    Mr. Garcia. Yes.1533    Mr. Sununu. A hundred percent. Yes, it's terrible.1534    Mr. Garcia. If you're not going to adopt surveillance1535pricing, then you should have no objection to banning it. From1536an antitrust enforcement to reforming gate and slot1537allocations, there are many other policy solutions that would1538increase competition, lower prices, and protect workers.1539Congress should be enacting them, not covering up Trump's1540corruption and criminality.1541    Before I yield back, I would ask for unanimous consent to1542submit for the record my letter with Ranking Member Nadler to1543Delta about surveillance pricing. I also ask unanimous consent1544to submit this January 2024 report titled, ``How to Fix Flying:1545A New Approach to Regulating the Airline Industry.''1546    Thank you, and I yield back.1547    Mr. Fitzgerald. Without objection. We now recognize the1548gentlelady from Vermont for a UC request.1549    Ms. Balint. Mr. Chair, I have some UCs. Thank you, Mr.1550Chair.1551    First, from Reuters, ``Spirit Airlines shuts down,1552industry's first Iran war casualty.''1553    Second, from the BBC, ``Trump says, quote, `I love the1554inflation' as U.S. prices rise at fastest rate in 3 years.''1555    Third, from Frommer's, ``U.S. Airlines Try to Abandon1556Passenger Rights and Performance Reports--to Secretly Police1557Themselves.'' Airline lobbyists are pressuring regulators to1558abandon your protections.1559    Fourth, from the Travel Technology Association, a prepared1560statement for the record.1561    Mr. Fitzgerald. Without objection.1562    Ms. Balint. Thank you.1563    Mr. Fitzgerald. I now recognize the gentlewoman from1564Wyoming for five minutes.1565    Ms. Hageman. Thank you. I do want to remind everyone that1566the Spirit-JetBlue merger failed because of the Biden1567Administration's outright hostility to mergers during those1568four years when they were in office.1569    Lina Khan took the position that no merger would be allowed1570unless the parties ended up worse off than before, which I1571think is incredibly, stunningly stupid. That was the position1572that they took, and now we are where we are. That Mr. Stout and1573Mr. Ravich and Governor Sununu, you have described the economic1574consequences of those kinds of decisions.1575    One of the frustrations that I have had being in Congress1576is that I have not found many people in Washington, DC, who1577understand the concept of opportunity costs. I would love it if1578we had a requirement--maybe we can pass a constitutional1579amendment that before you can become a Member of Congress, you1580actually have to take an economics class to learn something1581that basic.1582    I come from Wyoming, and despite being one of America's1583most rural States, Wyoming's air service is a significant1584economic contributor. Wyoming's 39 public-use airports1585collectively contribute approximately 3.5 billion in annual1586economic impact, while nine commercial service airports support1587over 20,000 jobs each year. Over 875,000 passengers boarded1588flights departing from Wyoming's airports in 2025, with my1589State ranking seventh nationally in passenger growth since15902019.1591    Wyoming has the second-highest average fare in the country.1592It is 53 percent more than the national average. With new1593industries moving into Wyoming each year and tourism being one1594of our largest business sectors in terms of economic impact,1595maintaining accessible, reliable air service is critical for1596economic growth and development. In many rural markets, there's1597effectively only one network carrier providing meaningful1598connectivity.1599    Mr. Ravich, what metric should Congress use to determine1600whether competition is improving for rural consumers?1601    Mr. Ravich. Congresswoman, thank you for the question. Some1602of the metrics you gave are compelling for Wyoming for example,1603right. You can look at those things and see that there's a1604magnetism to Wyoming, Cheyenne, et cetera.1605    We don't want to disconnect certain communities. That was1606always a concern of deregulation. At the same time, government1607subsidization of airlines, making them go to places that aren't1608necessarily compelling business cases, I think is a fair thing1609to say. We just have to sort of balance those opportunities--1610economic opportunities for firms to reasonably decide what1611business model they want, while also giving Americans and1612emerging places and dynamic places the opportunity to travel1613where they want and can.1614    Ms. Hageman. OK. Governor Sununu, in your written1615testimony, you cite that 5.5 percent of U.S. domestic market1616passengers traveling in city pairs were left with just one1617carrier. With limited exceptions, this statistic is broadly1618applicable to Wyoming, as most of our communities solely rely1619on United Airlines for commercial air service.1620    What responsibility do major airlines have to maintain1621access to the national air transportation system for rural1622communities?1623    Mr. Sununu. Let me, if I may, begin by saying, I think1624you're absolutely correct, Wyoming especially is1625disproportionately--even as you're talking rural areas--really1626disproportionately challenged when it comes to access,1627specifically in Cheyenne and Jackson. I know the airlines have1628looked at different opportunities there.1629    A couple of things. Rural access is absolutely critical,1630right? That's about choice. That's about competition. What we1631find is that consumers are making interesting choices. They're1632not just looking at their smaller airports. They're willing to1633travel further because smaller airports are typically more1634expensive, unfortunately. That's why EAS, the essential air1635service (EAS) program, is vital. We're huge supporters of it.1636Frankly, it should probably be expanded to make sure that these1637connectivity points are really there.1638    To your point, this is where--in some markets you do have1639five, six, seven, and eight different competitors flying from1640point to point; not in Wyoming.1641    Ms. Hageman. Not in Wyoming.1642    Mr. Sununu. Not in Wyoming. It's really, really tough.1643Again, anything we can do to make sure that with--on a1644deregulatory basis, making sure that the financial1645opportunities flow to the customer, not to the government or--1646to the customer, those opportunities will flow there, so that1647competition can thrive reducing the cost on airports, making1648sure that infrastructure is done, making sure that--again, I go1649back to even looking at our national airspace, right.1650    Right now, we manage--every little pocket manages its own1651little part of the national airspace, as opposed to this new1652modernized system that where Bryan Bedford and the FAA are1653bringing into play, which will allow more efficiency,1654especially in rural areas that right now you could have small1655airports that could have unmanned towers right now, right. A1656major carrier isn't going to fly there necessarily. By having a1657more comprehensive air control system as well you are going to1658have more opportunity in rural areas.1659    Ms. Hageman. I am out of time, but if you have an1660opportunity, I would love for each of you during the course of1661this hearing to give one example of what you think Congress1662should do to improve this situation. Thank you. I yield back.1663    Mr. Fitzgerald. The gentlelady yields back. I now recognize1664the gentleman from Georgia for five minutes.1665    Mr. Johnson. Thank you, Mr. Chair. It's been years since1666the Biden Administration challenged the acquisition of Spirit1667by JetBlue. It's been years.1668    Isn't it a fact that Spirit collapsed because Trump's1669unconstitutional war of choice with Iran caused fuel prices to1670surge uncontrollably? Isn't that a fact, Professor Rose?1671    Ms. Rose. That's what the Spirit CEO said.1672    Mr. Johnson. We have all felt the pain at the pump with our1673cars, and the price of jet fuel went up even more steeply than1674the price of gasoline. Once Trump went to war with Iran, the1675price of jet fuel became more than double the cost that was1676contemplated in Spirit's restructuring projections, costing1677Spirit nearly $100 million more than they were expecting in1678March and April alone. In fact, as you note, Professor Rose,1679their bankruptcy filings admit that it was untenable fuel costs1680that led to their downfall.1681    The impact of Trump's reckless war extends beyond Spirit.1682The Bureau of Transportation Statistics reported that airlines1683paid nearly $6.5 billion in fuel costs in April 2026, which is168478 percent higher than what they paid a year before the war1685began. Isn't that right, Mr. Sununu?1686    Mr. Sununu. No, it's not right.1687    Mr. Johnson. OK. Well, isn't it correct that airlines could1688not absorb the added cost of the Iran war and the price of jet1689fuel, and so that's why they had to raise prices over 301690percent--1691    Mr. Sununu. Oh, the airlines as a whole, yes, sir. Sorry.1692Spirit Airlines was in major financial distress years before1693the issue in Iran, though.1694    Mr. Johnson. Iran pushed them over the brink, though.1695    Mr. Sununu. Two months of increased fuel costs did not sink1696Spirit. That's not what sunk Spirit.1697    Mr. Johnson. Well, it certainly wasn't the denial of the1698merger that did it. Let me move on.1699    Even people who are not flying are hurting because of1700Trump's war of choice. The diesel prices are skyrocketing.1701Trucks that deliver goods to grocery stores use diesel, so they1702need to pass those expenses on to consumers. In just the first1703few months of this unconstitutional war, American households1704paid an extra $450 on average. Wholesale prices are rising,1705hiring plans are delayed, and farmers cannot get their1706fertilizer for their cops.1707    Trump went in without a plan, and who knows how long this1708war is actually going to last. American businesses and1709consumers were finally free from Trump's tariffs just in time1710to be slapped down again by a price increase from this war of1711choice.1712    Professor Rose, one of the phrases in your written1713testimony really struck me. You said that you were concerned1714that under the Trump Administration, antitrust enforcement is1715turning into, quote, ``a political favor factory.'' I don't1716think it could be put any better than that.1717    Can you talk a little bit more about why the entire system1718suffers when the wealthy and the politically connected can buy1719the outcome that they prefer?1720    Ms. Rose. Yes. I always thought of antitrust as being the1721domain that preserved a consumer- and worker-facing interest in1722competition. Honestly, for other small businesses or businesses1723that want to grow preserved their ability to expand. When you1724don't have that protection, then you empower companies,1725particularly stronger companies or companies who are seeking1726competitive advantage and monopoly rent, to raise prices, to1727create barriers to entry to competition, and to restrict others1728from coming into the market.1729    As I mentioned before, you can have workers getting paid1730less because you're reducing competition for their employment,1731and all of that has tremendous cost for the American people.1732    Mr. Johnson. Thank you. Mr. Sununu, I find it curious, I'm1733curious about your disagreement with the Chair of Spirit1734admitting that it was untenable fuel cost that was the cause of1735their demise. You take issue with that. I don't understand why.1736    Let me ask Professor Rose. Do you think that concentrated,1737unchecked economic power poses a threat to freedom?1738    Ms. Rose. Yes, sir, although I'm not sure that's accessible1739through the antitrust laws, at least as currently written.1740    Mr. Johnson. All right. Thank you. I'm out of time. I yield1741back.1742    Mr. Fitzgerald. The gentleman yields back. I now recognize1743the gentleman from Kansas for five minutes.1744    Mr. Schmidt. Thank you, Mr. Chair. I want to thank all our1745witnesses for being here.1746    Listening carefully to the questioning, the back-and-forth,1747as always, it's been informative, and listening to our friends1748on the other side who've talked a great deal about fuel cost.1749I'd like to take up that line of discussion, Governor, perhaps1750with you, knowing that you most directly reflect--your folks1751have used the industry.1752    I would hope the answer to this question is no, but,1753Governor, would it surprise you--1754    Mr. Sununu. No.1755    Mr. Schmidt. Thank you very much. That's the best witness1756I've had all day. That's good. Would it surprise you to know1757that jet fuel prices on average at the height of the war in1758Iran were the same as they were in April 2022?1759    Mr. Sununu. No.1760    Mr. Schmidt. Of course, in April 2022, we were about two1761months after the Russian invasion of Ukraine. Isn't that right?1762    Mr. Sununu. There was a brief spike there, yes.1763    Mr. Schmidt. It was only three months after April 2022, in1764July 2022, that the merger of JetBlue-Spirit was publicly1765proposed. Isn't that right?1766    Mr. Sununu. I believe that's right.1767    Mr. Schmidt. At the time the antitrust reviewers in the1768prior administration began their consideration and ultimately1769review of the merger, didn't they know or shouldn't they have1770known that fuel price spikes were not only a possibility but a1771recent reality?1772    Mr. Sununu. I would imagine so, yes.1773    Mr. Schmidt. Would they have taken that into account in1774their review?1775    Mr. Sununu. I would have hoped so, yes.1776    Mr. Schmidt. Would airline managers, leadership, have taken1777that into account in their planning for the future1778survivability of their firms?1779    Mr. Sununu. Yes. I would just say each of the airlines1780hedges against fuel in very different ways, and some of them1781don't hedge at all. They used to hedge; they don't quite1782anymore in terms of how they manage the risk. They all manage1783that risk profile differently.1784    Mr. Schmidt. Let me talk a little bit about fuel prices,1785Governor, because it's been so central to today's discussion, I1786think it's very relevant. Going forward, there are going to be1787future fuel spike--high spikes through international events,1788through other market factors. It is going to happen, as it1789happened in April 2022, and it happened again within the last1790six months or so. Something will happen down the road.1791    As airline leadership, managers, whether they're from the1792Big Four or from the midsize or from the small planes, they all1793pay the same fuel prices. Don't they, Governor?1794    Mr. Sununu. Relatively, yes.1795    Mr. Schmidt. They all have to consider planning to hedge1796against that risk of a spike in prices. Isn't that right?1797    Mr. Sununu. Yes, they have to plan. That's for sure.1798    Mr. Schmidt. As they're planning, do they take into account1799ways that they might be able to mitigate the price of jet fuel1800going forward?1801    Mr. Sununu. Yes, they do, and they all do it a little bit1802differently.1803    Mr. Schmidt. Would that include a discussion of ultimate1804forms of jet fuel that might be coming onto the market in ways1805that are commercially relevant?1806    Mr. Sununu. Of course. They're all big believers in users1807in SAF, as you know, and that continues to rise.1808    Mr. Schmidt. Let's talk about SAF just a little bit. It's1809obviously an interest of ours in farm country. We care a lot1810about it. We care about it not only because it helps our1811producers and it helps our local economies when it's produced1812domestically, and the investment comes here, but also because1813it helps our consumers who are ultimately flying on the1814aircraft that have the potential.1815    Can you share with us a little bit about how a mature1816domestic SAF industry at scale could have an effect on the1817planning for airlines to be more competitive, including price1818competitive for consumers?1819    Mr. Sununu. Sure. As the industry matures, the economics1820get better and better, right? Because, like any fairly new1821technology--and it is a fairly new introduction into the1822industry--it starts out fairly costly. Lots of new--I don't1823want to say barriers to entry but, costs are indeed--all our1824airlines are investing in various forms of research and1825development to make SAF more accessible, easier to produce,1826whatever it may be; trying to get more companies that actually1827make--giving more time for more companies that actually make1828SAF to come onto the market. I actually just met with one of1829the largest SAF manufacturers, and they're building a brand-new1830plant. They're expanding.1831    There's no doubt that over time prices should definitely1832come down, be much more competitive with standard jet fuels,1833and provide more options, potentially, as you may see severe1834spikes in the future.1835    Mr. Schmidt. Are there ways that Congress could better1836partner with the industry to help that transition to scale1837occur?1838    Mr. Sununu. Look, any sort of infrastructure investment. I1839would say, for airlines in particular, some of the investments1840we look at are the transportation, right? You have your own1841transportation system for SAF because you're not mixing it with1842other traditional jet fuels.1843    Permitting. Permitting reforms to make sure that we can1844build and develop, whether it's folks that want to develop SAF,1845or the pipelines to move SAF from point A to point B, or1846getting storage tanks approved at various airports. That's one1847of the bigger barriers because you need a whole separate system1848for it, so that requires a lot more infrastructure. Permitting1849and investment in that infrastructure would be very helpful.1850    Mr. Schmidt. These are discussions that will involve1851everybody in the industry, except Spirit, right? Is it not1852relevant to them anymore?1853    Mr. Sununu. Not anymore, unfortunately, yes.1854    Mr. Schmidt. Mr. Chair, I yield back.1855    Mr. Fitzgerald. The gentleman yields back. I think we've1856gone through just about all the Members that are available1857today. I was just going to utilize my five minutes to ask two1858more questions.1859    Governor Sununu, this is a topic that came up a couple of1860times, just to dig into this a little bit more. At the slot-1861controlled airports, the incumbent carriers benefit by a use-1862it-or-lose-it system, right?1863    Mr. Sununu. That's right.1864    Mr. Fitzgerald. Do you think the slot system harms1865competition because of the way it's kind of designed?1866    Mr. Sununu. No. Well, a couple things. When a smaller1867carrier wants a slot, that's worked out between the carrier and1868the airport itself. If the carrier isn't happy or feels like1869they're being unfairly treated, there is an appeals process up1870to the FAA that they can use, but that's really a carrier-1871airport-type decision.1872    I would argue and let you know that more slots are1873allocated to low-cost carriers today than ever before, right.1874They have and continue to grow capacity.1875    Yes, the slots not--and by the way, not every airport is1876slotted. That's another thing to be aware of. Some airports1877are, some airports aren't.1878    One of the things I've learned in this industry is there's1879a saying, ``if you've seen one airport, you've seen one1880airport.'' That's in terms of its structure, their management,1881their slot system, how they allocate, the infrastructure, and1882the airlines coming into it. Everyone is truly taken unique.1883Again, we want that broad variety. I represent a lot of1884airlines, right. I want everybody to have a fair shot at that1885pie.1886    Mr. Fitzgerald. Very good. Thank you. Mr. Ravich, what's1887your take on the slot system and the impact it has on overall1888operations nationwide?1889    Mr. Ravich. Chair, I do think you've identified an issue1890that's worth the attention of this Committee. As Governor1891Sununu rightly points out, A4A even has a diverse constituency,1892right. There's no sort of monolithic airline industry. They1893even compete with one another, and they don't agree1894necessarily. Some of these airlines want the other airline1895slots, even with United and American are big airlines.1896    There is some anticompetitive pressure or tendencies in1897slots and gates that does need evaluation. I should refer to1898pending legislation, right, in the Senate with the gateway1899access law, which does have some merit to it.1900    Mr. Fitzgerald. Well, very good. That concludes today's1901hearing. I want to thank the witnesses for appearing before the1902Subcommittee today.1903    Without objection, all Members will have five legislative1904days to submit additional written questions to the witnesses or1905additional materials for the record.1906    Mr. Raskin. Mr. Chair.1907    Mr. Fitzgerald. The gentleman is recognized.1908    Mr. Raskin. I just want to add a couple of UC requests, if1909that's all right, Mr. Chair.1910    Mr. Fitzgerald. Yes.1911    Mr. Raskin. First, the decision of the Reagan appointee,1912Judge Young, in U.S. v. JetBlue Airways Corporation, January191316, 2024.1914    Second, an article from Law360 titled, ``Biden-Era M&A Data1915Shows Continuity, Not Revolution.''1916    Finally, this was an article February 21, 2025, ``Spirit1917Airlines to exit Chapter 11 `within weeks' as court backs1918recovery plan.'' That, of course, was just a few days before1919the war started in Iran.1920    Mr. Fitzgerald. Without objection. With that, this hearing1921is adjourned.1922    [Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]19231924    All materials submitted for the record by Members of the1925Subcommittee on the Administrative State, Regulatory Reform,1926and Antitrust can be found at: https://docs.house.gov/1927Committee/1928Calendar/ByEvent.aspx?EventID=119409.19291930                                 [all]