Economic Liberties’ William McGee Shapes Conversation About Fixing Airline Industry

Washington, D.C. — “The nation’s airline industry is broken,” explained American Economic Liberties Project Senior Fellow William J. McGee in testimony before the Senate Commerce Committee this morning. “It has found us all lurching from crisis to crisis, meltdown to meltdown, as the interests of consumers, workers, and entire regions of the country are subjugated to the interests of a handful of institutional investors, lobbyists, and senior executives.”

McGee’s analysis, which is increasingly shaping bipartisan demand for a new, national conversation about the state of the airline industry, proved central to today’s hearing, which grappled with a broad number of consumer concerns, regional inequality issues, and the problems posed by airline deregulation and consolidation.

Senator Jon Tester (D-MT) identified airline deregulation as a key vehicle of regional inequality, noting passengers from rural and smaller communities often paying much more to fly. Tester’s takeaways echoed important writing from the Financial Times in February.

I believe in free markets and capitalism, but when it costs me 3 times as much to fly from Washington D.C. as it does from Dulles to Europe, there’s something nuts about that… [Deregulation] works really well if you live in a hub or a population center, but if you’re not, you’re paying through the nose. You’re paying through the nose and have less service today than you had before 1978 — and I say that from a Great Falls, Montana perspective. That’s not to say that deregulation is bad, it just doesn’t work as well as everyone thinks it does in rural areas.”

Senator Ed Markey (D-MA) advocated for robust legislation to bring transparency to airline junk fees in baggage and seating, which he says are oftentimes completely unreasonable. Markey’s remarks come after President Biden’s State of the Union baggage fee call-out, and are among the many issues McGee raised in his testimony.

“We have to end these junk fees, including a ban on parents having to pay any kind of fee to have their child sit next to them. We just have to ban all of this…Right now, it’s just out of control. They’re just tipping people upside down at the counter and shaking money out of consumers’ pockets.”

Senator Amy Klobuchar (D-MN) called out the disastrous potential consequences of a JetBlue-Spirit merger, highlighting how it “would harm passengers, workers, and communities.” Like Economic Liberties’ McGee, the American Antitrust Institute’s Diana Moss, testified about the acquisition’s anticompetitive harms.

Senator Ted Cruz (R-TX) incorrectly speculated that the market would be improved “if we can limit regulations on airlines.” In fact, as written testimony from the American Economic Liberties Project documents, “in the 45 years since the Airline Deregulation Act was passed in 1978, one by one the central promises of more competition and better service have been broken.”

Even still, Cruz acknowledged the extreme power and control that large airlines have over regional communities’ access to the national economy, affirming that “Too often, communities become disconnected by the whims of large airlines.”

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