Originally Posted by
EWR764
He's not wrong that, by comparison, the U.S. airline industry is materially less concentrated than others on an objective basis (e.g., HHI as a metric), and by no means is that a recent phenomenon.
I'm not a fan of further airline mega-mergers, either, but even with wave after wave of post-deregulation airline consolidation, airfares over the long term have continuously declined in inflation-adjusted terms. Kirby admits this in his letter. To be sure, there are routinely year-over-year spikes, mostly driven by exogenous factors (war, pandemic, fuel costs, etc.) but the long term trend continues to point downward. Perhaps one final round of mergers would be "the one," but it's hard to say.
Inflation is what's measured on prices across all kinds of goods and services. To say airfares are too low by this measure ignores the corresponding fact that there must by a whole bunch of things where the price is too high. Neither case may be true. The better measure of US airfares is to calculate airfare changes in the US domestic market vs intra-Europe and intra-Asia markets. If those have fallen even more on an inflation-adjusted basis then that whole argument goes out the window.