The reason is the same for why any of our country’s other oligopolistic powerhouses can treat their fellow Americans with such crass indifference: Shareholders don’t really care about consumer opinion or even a company’s larger public image. They care about profits. If there is no competitor to whom consumers can turn, who really cares what they think?
The 2013 merger of American Airlines and U.S. Airways — the biggest and last in a series of dramatic consolidations that federal regulators did little to stop — left the United States with only four major airlines. The overwhelming weight of empirical evidence shows that wherever fewer carriers compete in individual airline routes, fares go up. No factor can fully explain it except market power.
Don’t listen to the airlines or their apologists when they point to the fact that average fares have not gone up — or, indeed, that average fares have sometimes grown even more slowly than inflation. As they deploy that nominal truth, it is all but a literal lie, because average fares are irrelevant. What matters is the price you actually pay when you buy a ticket, and that price goes up whenever a given airline controls more of the traffic on a route you fly. That pricing power has proven to be very durable and difficult for other airlines to undercut.
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