A U.S. House hearing scheduled for Wednesday morning will scrutinize recent mergers and acquisitions in the airline industry.
The session, titled “The 30,000 Foot View: Competition and Regulation in the U.S. Airline Industry,” was first announced last week, but officials released little information about its exact focus or scope. A more comprehensive outline made public Tuesday said lawmakers will examine “the current market structure and government regulations” for air carriers, as well as recent M&A.
At least three witnesses are expected to testify before the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust – Airlines For America President and CEO Chris Sununu; Kristian Stout, director of innovation policy at the International Center for Law and Economics; and Timothy Ravich, senior counsel at law firm Tressler LLP.
Airline consolidation was a top story in April, when it became known that United CEO Scott Kirby had pitched the idea of a merger with American Airlines. American rejected the idea and United dropped its efforts, though Kirby has continued to defend the idea in interviews and at public appearances.
The prospect of an airline mega-merger – which would have given the combined company a domestic market share of over 34% – prompted speculation over whether such a deal could clear the U.S. Justice Department. Neither the Justice Department nor the Transportation Department ever weighed in on the matter, as a final agreement was never filed.
Around the same time, bankrupt ultra-low-cost carrier Spirit was looking for backers or a potential partner to keep it financially solvent. It went out of business on May 2 when a last-minute rescue offer from the Trump administration fell through.
Attorneys for the now-defunct company have said the March-April surge in jet fuel prices, a consequence of the war in Iran, made a recovery impossible.
The hearing will begin at 10 a.m. on Wednesday.
