Donald Trump’s victory last night took many by surprise. The return of President Trump to the White House will directly impact airline regulations and mergers. Here are my predictions.
What Donald Trump’s Victory Means For Airlines And Passengers
The return of the Trump Administration will likely usher in a more hands-off approach to regulation that will impact both passenger protections and mergers.
Northeast Alliance Between American Airlines + JetBlue Will Return
American Airlines is already exploring a fresh alliance with JetBlue and I expect we will see a full return of the Northeast Alliance with very little pushback from US regulators. After failing to find a merger partner, JetBlue will again work closely with American Airlines in a bid to complement some of its routes from Boston (BOS) and New York (both LGA and JFK) as well as in Florida. We should also see a return to reciprocal frequent flyer benefits.
Spirit + Frontier Will Merge
I’m not sure a Harris Administration would have blocked this, but a Trump Justice Department will not oppose a merger between Spirit and Frontier, the nation’s two leading discount carriers. Both carriers have struggled in the post-pandemic world as network carriers have become far more adept at pricing their own tickets to better compete. Consumers have also wised up to the business model and are spending less money on ancillary items like baggage, a critical component of the business model.
JetBlue Will Try For Another Merger
Even as the Northeast Alliance between JetBlue and American Airlines will return in the interim, I would not be surprised to see JetBlue and Alaska Airlines attempt to merge. That’s another post for another day, but if JetBlue and Alaska did try to merger, I am not certain it would face any pushback from the Trump Administration.
Consumer Protections Will Not Be Enforced
Under Secretary of Transportation Pete Buttigieg, the US has introduced new safeguards for travelers, including automatic refunds during delays or cancellations and stringent guidelines or airlines to offer meal and hotel vouchers during delays. While I don’t expect those rules will vanish on Day One, I predict they will be weakened through non-enforcement and ultimately abandoned altogether as too “burdensome” for carriers serving US soil.
Loyalty Inquiry Will Be Dropped
Buttigieg is also looking into the transparency of frequent flyer programs and whether airlines offer what amounts to a bait and switch when it comes to promising free flights or other perks in exchange for loyalty and credit card spending, then failing to deliver. I expect that inquiry is now over. I also expect Dick Durban’s (D – IL) Credit Card Competition Act of 2023 is dead.
CONCLUSION
Trump’s victory will lead to new leadership at the Department of Justice and Department of Transportation that is more likely to abandon Biden-era restrictions on cooperation and compensation. The result for US consumers may be mixed: fewer consumer protections but an industry that can better align to market headwinds through cooperation.
image: screengrab / Trump campaign
