The 30,000 Foot View: Competition and Regulation in the U.S. Airline Industry

Education and Workforce MarkupsHouse Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust · 2026-06-24 · 119th Congress
The House Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust held this hearing to examine competition and regulation in the U.S. Begins at 0:09:11
Transcript
Highlights

Title

Airline competition, deregulation, and antitrust after Spirit's collapse

Purpose

The House Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust held this hearing to examine competition and regulation in the U.S. airline industry, marking nearly 50 years since the Airline Deregulation Act of 1978. Discussion centered on airport slot and gate access, the blocked JetBlue-Spirit merger and Spirit Airlines' subsequent bankruptcy, the effect of the Iran war on jet fuel prices, and allegations of political favoritism in Trump administration antitrust enforcement. Witnesses included an airline trade association CEO, an aviation lawyer, a law-and-economics scholar, and a former DOJ antitrust economist. Begins at0:09:11

Who spoke

Chairman Scott Fitzgerald (R-WI)0:09:11: Opened by crediting the Airline Deregulation Act with expanding consumer choice0:09:38 and argued lingering government barriers — slot controls, gate leases, environmental review, and cabotage restrictions — favor incumbents0:11:570:12:240:13:490:14:15; cited the blocked Spirit-JetBlue merger and Spirit's May 2026 shutdown as a cautionary tale about overregulation0:14:390:15:03.

Rep. Becca Balint (D-VT), Ranking Member0:16:36: Said airlines have consolidated from 40 carriers in 1960 to four controlling two-thirds of the market today0:17:18; blamed Spirit's collapse on Trump's Iran war doubling jet fuel prices0:18:420:19:10, and criticized the Trump DOT for rolling back Biden-era refund and fee-disclosure rules estimated to save consumers over $500 million a year0:20:330:20:53.

Rep. Jamie Raskin (D-MD), Ranking Member of Full Committee0:22:27: Argued the Iran war cost consumers over $60 billion in fuel costs (about $470 per household) and forced Spirit to absorb an extra $100 million in costs0:22:540:23:17; cited the "Spirit effect" (fares fall ~21% on routes Spirit serves) and Judge Young's ruling blocking the JetBlue-Spirit merger0:25:230:25:52; alleged a "Trump transaction tax" pattern in recent merger clearances (Nexstar-Tegna, Live Nation-Ticketmaster, Paramount-Skydance)0:26:540:27:19.

Chris Sununu, President and CEO, Airlines for America0:31:11: Said airlines support 5% of GDP0:31:34 and that domestic fares fell 3.5% between 2019-2025 while consumer goods rose 26%0:33:11; blamed government shutdowns and Strait of Hormuz-driven fuel costs (an added $8 billion this year) for industry headwinds0:31:590:32:22; called for air traffic control modernization0:34:53; later said 46% of passengers now fly low-cost/ultra-low-cost carriers versus 4% at deregulation1:15:12; denied airlines use surveillance pricing and said A4A would support banning it1:19:401:20:05.

Timothy Ravich, Senior Counsel, Tressler LLP0:35:52: Framed the hearing around when regulation is necessary versus when markets should work freely0:38:10, noting competition today hinges on ground access — gates, terminals, and capacity0:38:40; said cabotage could bring more firms into the market but raises subsidy and national-security concerns1:04:59.

Kristian Stout, Director of Innovation Policy, ICLE0:40:07: Argued policy choices, not airlines, create the biggest competitive barriers, citing Spirit as an example0:40:38; said the failing-firm legal test was too static for a capital-intensive, shock-prone industry0:41:35; noted low-fare entry at slot-controlled airports cuts fares about 17%0:42:27; agreed consumer-mandate accumulation hits ultra-low-cost carriers hardest0:43:24.

Nancy Rose, Professor, MIT0:44:15: Stated flatly that antitrust did not kill Spirit — sudden Iran-war fuel spikes did — and that blocking the merger kept Spirit flying two years longer, preserving fares 10-20% lower via the "Spirit effect"0:44:430:45:05; said JetBlue's own modeling planned a 30% fare increase0:45:32; gave the Trump DOJ antitrust enforcement an "F" grade, citing political influence over evidence-based decisions0:55:040:55:16; cited Live Nation-Ticketmaster and Paramount-Skydance as examples of a "political favor factory"0:47:531:30:13.

Rep. Darrell Issa (R-CA)0:49:26: Pressed Rose on barriers to entry versus lack of competition as the core antitrust concern0:49:26 and got Stout to agree that Spirit's gates being sold off is itself a barrier to entry0:50:42.

Rep. Deborah Ross (D-NC)1:00:27: Asked Sununu how deregulation changed the industry and benefited consumers1:01:09, and questioned Ravich on how cabotage could increase competition1:04:59.

Rep. Becca Balint, second round1:05:39: Asked Rose whether there's still room for airline mergers1:05:59; highlighted research that ULCC presence cuts base fares up to 20%1:07:19 and pressed on reports of lobbyists using White House access to influence DOJ antitrust decisions1:08:33.

Chairman Jim Jordan (R-OH)1:11:04: Walked Stout through the JetBlue-Spirit deal's blocked outcome, framing Elizabeth Warren's prediction of "fewer flights and higher rates" as having come true anyway1:12:161:12:30; cited 17,000 Spirit jobs lost1:13:34.

Rep. Raja Krishnamoorthi (D-IL)1:16:13: Cited a poll showing only 31% of Americans view the airline industry positively1:17:11; raised United CEO Scott Kirby's stated plan to take over American's gates at Chicago O'Hare and the resulting FAA flight cap1:17:281:17:57; questioned Sununu on surveillance pricing tied to Delta's reported partnership with an Israeli AI pricing firm1:19:22.

Rep. Harriet Hageman (R-WY)1:21:37: Cited Wyoming data — 875,000 passengers in 2025, seventh-highest passenger growth nationally, fares 53% above the national average1:22:571:23:16; asked Ravich what metric Congress should use to gauge rural competition1:23:44 and pressed Sununu on Essential Air Service program support1:25:19.

Rep. Nikema Williams (D-GA)1:26:56: Pressed Sununu on whether Trump's Iran war, not the blocked merger, sank Spirit, citing $6.5 billion in April 2026 fuel costs (78% higher year-over-year)1:27:551:28:26; questioned Rose on antitrust becoming a "political favor factory"1:30:13.

Rep. Derek Schmidt (R-KS)1:32:08: Questioned Sununu on jet fuel price parallels between the 2022 Ukraine invasion and the Iran war, and on airlines' ability to plan for fuel volatility1:32:381:34:20; discussed Sustainable Aviation Fuel (SAF) infrastructure investment1:35:03.

Chairman Fitzgerald, closing questions1:37:12: Asked Sununu and Stout about whether the slot "use it or lose it" system harms competition1:37:351:38:54.

Key moments

Fitzgerald said the "big four" carriers control nearly 80% of domestic travel and cited Delta's 20-year Atlanta lease barring a second city airport as a barrier to entry0:11:340:12:54.

Balint said the proposed United-American merger would create a combined carrier controlling 34% of the domestic market, which Transportation Secretary Sean Duffy called "interesting"0:17:480:18:13.

Raskin quoted Judge Young's ruling that a JetBlue-Spirit merger "would eliminate one of the airline industry's few primary competitors" and "further consolidate an oligopoly"0:25:23.

Rose testified that JetBlue's internal deal modeling called for removing seats, repainting planes, and raising fares 30%0:45:32; Jordan later got Stout to agree that even a 30% increase would still undercut the big four's fares1:12:38.

Stout said fuel costs, an engine-inspection crisis, and big carriers copying Spirit's product also contributed to its bankruptcy, not just the blocked merger alone0:40:38.

Rose said Greyhound and other bus services saw a 30% jump in passenger traffic on the 130 routes formerly shared with Spirit, illustrating how many former Spirit flyers can't afford other airlines0:55:41.

Rose said senior DOJ antitrust officials were fired after objecting to an inadequate Live Nation-Ticketmaster settlement, which caused Live Nation's stock to pop 6% on announcement, and that 33 state AGs stepped in and won at trial0:48:23.

Schmidt got Sununu to acknowledge jet fuel prices during the Iran war matched levels seen in April 2022 after Russia's invasion of Ukraine — three months before the JetBlue-Spirit merger was even proposed — suggesting fuel volatility was a foreseeable risk1:32:51.

Krishnamoorthi cited United CEO Scott Kirby's stated intent to "take over American's gates" at O'Hare and add "as many flights as are required" to crowd out American, prompting an FAA-imposed flight cap1:17:28.

Sununu disputed Democrats' framing that fuel costs alone sank Spirit, saying the airline was in financial distress "years before" the Iran conflict1:28:31, directly contradicting Rose's and Raskin's earlier fuel-cost attribution.

Metadata

CommitteeHouse Judiciary Subcommittee on Administrative State, Regulatory Reform, and Antitrust
Chamber / CongressHouse · 119th Congress
Date2026-06-24
TypeHearing
Witnesses
Mr. Timothy Ravich — Senior Counsel, Tressler LLP
The Honorable Chris Sununu — President and CEO, Airlines for America (A4A)
Mr. Kristian Stout — Director of Innovation Policy, International Center for Law and Economics
Ms. Nancy Rose — Charles P. Kindleberger Professor of Applied Economics, Massachusetts Institute of Technology
Videoyoutube
Transcript338 caption blocks · 15,100 words · 1:40:32 runtime
EventCongress.gov 119409