Antitrust bill takes aim at Frontier-Spirit airline merger: Travel Weekly
Two congressional Democrats who oppose the proposed merger between Frontier Airlines and Spirit Airlines have filed legislation that would prohibit corporate mergers valued at more than $5 billion.
The bill, introduced Wednesday by Sen. Elizabeth Warren of Massachusetts and Rep. Mondaire Jones of New York, would also require the Federal Trade Commission (FTC) or the Justice Department (DOJ) to review all mergers that have taken place since the start of this century that would have been prohibited had the proposed law been in effect.
It would also require federal regulators to break up companies in which the merger resulted in a market share above 50%, created a “highly concentrated market” or harmed competition, workers, consumers, or small or minority-owned businesses.
A summary of the legislation calls out the American-US Airways merger of 2013 as an example of a “harmful merger” that was allowed to proceed.
American didn’t immediately respond to a request for comment on Wednesday afternoon.
“For capitalism to work for all Americans, our markets must have meaningful, robust competition,” reads a press release put out by the two bill sponsors. “Since the 1970s, weak antitrust enforcement has led to increased industry consolidation across the American economy. Today, a handful of giant corporations are dominating countless industries to the detriment of consumers, workers and entrepreneurs of all backgrounds.”
On March 10, Warren and Jones were among eight congressional Democrats who signed onto a letter to DOT secretary Pete Buttigieg and Jonathan Kanter, assistant attorney general for the DOJ’s Antitrust Division, warning that the proposed Frontier-Spirit merger could hurt consumers by further concentrating the U.S. airline industry and by creating a dominant player among ultralow-cost carriers.
Frontier and Spirit have valued their deal at $6.6 billion, well above the limit proposed in the Warren-Jones bill.
The bill, dubbed the Prohibiting Anticompetitive Mergers Act, would also prohibit mergers that would result in market share for a single company of more than 33% or that would otherwise result in “highly concentrated markets.”
In addition, the legislation would allow the DOJ and FTC to reject merger deals without first obtaining a court-ordered injunction.
Frontier didn’t immediately respond to a request for comment. It and Spirit have argued that as a combined carrier they would provide viable competition to American, Delta, United and Southwest in more markets than they are able to as separate carriers. In addition, the companies have said that by offering more frequencies in big markets, they would be able to better re-accommodate customers when flights are canceled.
The Warren-Jones bill has nine Democratic co-sponsors in the Senate and 11 Democratic co-sponsors in the House, but no Republican co-sponsors.
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