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"It's hard to tell whether this is going to be an activist Transportation Department or it is just reacting to some recent high-profile events," a Washington lobbyist with an airline client told me this week. "Either way, we've told our client to assume the worst. Airlines aren't particularly popular with passengers, and it would cost the DOT nothing to adopt a populist stance on every real or imagined slight."
Of course, nothing happens in a vacuum in Washington, and the DOT's new pro-consumer bent may be just the tip of two gigantic icebergs that skittish airlines spy on the horizon.
In the last few years, the DOT has almost routinely approved code-share agreements, antitrust waivers for multi-airline alliances, and even outright mergers. But due to objections raised by the Department of Justice, the Transportation Department has delayed its final approval of antitrust immunity for American Airlines, British Airways, Iberia, and their Oneworld Alliance. The controversial hookup, foiled twice before in slightly different configurations, seemed destined for approval this time.
Even more ominous, at least from the airlines' point of view, is LaHood's decision to "have a plan for the future of aviation." That comment came last month after he chaired a conference on airline competitiveness sought by the airline industry's labor unions. Airline chief executives were invited to the roundtable, but they sent underlings instead. Then they railed against any attempt by the DOT to re-regulate commercial aviation, which was largely freed from government control by the Airline Deregulation Act of 1978
"We think we see where this is going," one top airline executive told me last month after the conference. "And we don't like it."
The Fine Print…
LaHood was a notable advocate of a closer alliance between American Airlines and British Airways when he was a congressman. (American Airlines maintains a large hub at Chicago's O'Hare Airport.) However, he recused himself from consideration of the antitrust application before the Transportation Department. LaHood has also dismissed airline fears of further government involvement in the largely unprofitable airline industry. "I have never heard one word spoken by the administration about re-regulation," he said after last month's conference.
Joe Brancatelli writes Portfolio.com’s business travel column, Seat 2B. Brancatelli is the former executive editor of Frequent Flyer magazine and operates the membership site JoeSentMe.com. You can reach him at jbrancatelli@portfolio.com.
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