Airline Industry
The Ruling Against American Airlines-JetBlue Provides a Chance To Reform Antitrust’s Rule of Reason
Herbert Hovenkamp writes that the First Court’s recent ruling against American Airlines and JetBlue for coordinating operations in New York City and Boston exemplifies the correct application of antitrust’s rule of reason, which has troubled courts and plaintiffs and led to underenforcement for decades.
The Korean Air-Asiana Airlines Merger Shows How Rational Actors May Produce Irrational Outcomes
Sangyun Lee reviews the 2021 merger between Korean Air and Asiana Airlines, which was promoted by the government despite warnings from the majority of experts deeming it obviously anticompetitive and harmful to consumers. He finds that the merger is a paragon of how, under institutional constraints, the rational choices of actors and organizations can collectively lead to irrational, suboptimal outcomes.
Why Was JetBlue-Spirit Blocked and What Does it Mean for the Airline Industry?
A federal judge recently blocked the proposed merger of JetBlue and Spirit airlines on antitrust grounds, reversing antitrust enforcers’ recent history of waving through airline industry consolidation. However, while this decision affirms that mergers designed to reduce competition and raise prices violate antitrust law, it comes too late to undo the damage from 15 years of lax enforcement that allowed radical consolidation in the airline industry.
