It was announced today that the Department of Transportation levied a fine of $100k against Liberty Travel and $40k against STA Travel and AAA Mid-Atlantic Travel because their booking agents failed to disclose that the flights they were booking were code-shares. Code-Share flights are when partner airlines agree to provide transportation on each of their connecting flights and charge one fare. In theory this increases competition as an airline can offer service to cities where they may not have flights operations. Hopefully, for the traveling public fares are kept lower and they have access to more flight options as the airlines combine their efforts.
However, the DOT must view this situation differently with these announced fines. What was the harm to the public by these fined travel agencies? If you cannot easily answer this question, I say follow the money. The more accurate question must be asked what pressure the major air carriers put on the DOT to enforce such crazy fines.
This comes on the same day that the Department of Justice indicated it may be open to approving the US Air – American Airlines merger. This combined airline would control 63% of the take-off and landing slots and over 69% of the air traffic out of Washington D.C. Reagan National Airport. They would be the largest airline in the U.S. Both carriers have a history of charging high fares in cities they dominate. This merger would stifle competition, yet the DOJ says they are willing to allow this with a few token modifications.
I suggest the DOT and DOJ get together to figure out how to improve airline competition rather than allow industry consolidation to three of four carriers and regulations to stifle choice.