United Airlines, Monopoly/Oligopoly, The Natural Laws of Capitalism

The recent incident in which United Airlines used the Chicago Police Department to enforce its corporate policies has already roused plenty of comments. Many have focused on the clumsiness, even callousness of the policy and its later justifications by senior managers. This is missing a more telling point about airline travel today.

In the US four airlines control over 60% of the seats and in many regional markets the competition veers towards a state of monopoly. There is simply no effective competitive controls on what the airlines can charge and under what conditions. This has lead to persistent high fares and a seemingly endless series of innovations in how many people can be jammed into a plane with as many extra charges tacked on for fewer and fewer amenities. Everyone who cannot afford business class or higher is very aware of this.

The innovation in the airline industry is in how to screw passengers

This situation is to be expected in a market that has become an oligopoly at best or a monopoly at worst. This is precisely why long ago government stepped in to set standards and regulations to protect consumers in these kinds of markets. It is time to re-regulate the airline industry. Why is it that fares that barely covered airline expenses during the period of $100 per barrel oil (the source of jet fuel) have remained fixed while the cost of oil has declined to $50?? Jet fuel represents nearly 40% of airlines’ costs. Why don’t we have minimum seat spacing so that someone 6'1" like me is not wedged in with knees jammed against the seat ahead? Why are there no standard baggage allowances per passenger without the extra charges tacked on? Without any effective competition in the airline market the only competition is between the airlines in innovating new ways to screw passengers.


Originally published at Current Matters.