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Budget airlines are going broke. Spirit Airlines may go under or get a government bailout, and JetBlue is just barely avoiding bankruptcy this year. It didn’t need to be this way. They tried to merge in 2024, but the merger was blocked because President Joe Biden’s administration was concerned that greater consolidation would lead to higher prices.
Perhaps the merger would not have saved Spirit Aviation Holdings Inc. or JetBlue Airways Corp., but it would have given them a better shot. And it points to a misconception about the use of antitrust law to protect competition: Yes, more competition can lower prices. But in today’s economy, so can the ability to scale.
This poses a problem for politicians who want to improve affordability, which is just about all of them. If they care about the consumer — and again, just about all of them say they do — then the enemy used to be corporate power. Now it may be part of the solution.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.