The steep drop in oil prices since mid-2014 has been a boon to airlines. American Airlines, the world’s largest, yesterday reported record profits for the fourth quarter and all of 2015. Delta and United have also posted a higher overall net income. If airlines were competing for customers, they’d pass those savings on to passengers in the form of lower airfares. But they’re not competing for customers and airfares have barely dropped because the wave of consolidations over the past decade has reduced the number of major carriers from 12 to 4, and many cities are now served by just 1 or 2.
Had antitrust laws been fully enforced, this consolidation wouldn’t have been allowed. But antitrust wasn’t enforced because of the increasing political power of big business. The money you’re now paying for airfares, in other words, contains a hidden redistribution from your paycheck to the incomes of top executives and major shareholders of the biggest airlines. It's yet another example of what this election is really all about.
What do you think?