- San Francisco Examiner: Uber, Lyft argue new regulations will stifle business models
- Capitol Weekly: Economy up, greenhouse gas down
- Capital Public Radio: Ride-Share Drivers Face New Insurance Requirements
POLITICO Morning Transportation for 7/2/2015
By HEATHER CAYGLE, with help from Kathryn A. Wolfe
MAJOR AIRLINES CONFIRM ROLE IN DOJ PROBE: All of the major U.S. airlines — Delta, American, United and Southwest — have confirmed they’re involved in a Department of Justice probe into potential collusion among carriers to artificially inflate ticket prices at the expense of consumers. A4A, the major airline trade group, said the allegations will be proved untrue but Sens. Richard Blumenthal and Chuck Schumer, both of whom have called for a federal inquiry into the issue in recent months, cheered the news.
Not one to hold back, Blumenthal also had a stinging rebuke for Justice officials: You made this mess, now clean it up. “The DOJ bears a real responsibility here because it approved these mergers, which have produced a highly concentrated market where the four major airlines account for 80 percent of all domestic travel,” Blumenthal told Kathryn in an interview Wednesday night.
Why this matters: Many believe the current market, where United Airlines, Delta Air Lines and American Airlines together hold market power over a vast majority of the country’s routes, was the inevitable outcome once DOJ approved the first of several recent mergers — the 2008 marriage of Delta and Northwest Airlines. At the time, Rep. Jim Oberstar said it would eventually result in three “global mega carriers” dominating the U.S. aviation market, a prediction that’s come true. And now DOJ is probing price-fixing, less than two years after the department agreed to the last giant airline merger, which allowed American Airlines and US Airways to combine while requiring them to shed dozens of flight slots at airports.
‘Competes vigorously’ every day: A4A said it’s confident that the DOJ probe will uncover nothing amiss, adding that investigators will find that airlines “compete vigorously every day, and the traveling public has been the beneficiary.” The group also pointed to DOT’s own data showing that domestic air fares are down this year while capacity is at its highest level in several years.
So what’s next? Eno Center for Transportation’s Joshua Schank told MT it is “not easy” for federal investigators to prove collusion given the fact the airlines’ ticket prices are readily available online. “Right now airfares are completely transparent so everyone knows what everyone else is charging. So if you go and see that someone else is charging $100 and you say I’m also going to charge $100, is that collusion?” he said. “When you have to prove collusion, what you’re going to need is some airlines communicating directly with other airlines … and that’s harder to find.”
But if they do find wrongdoing? The likely outcome will be fines against the major carriers, Schank said. “There’s not much you can do to actually create competition in the industry that doesn’t have a tremendous amount of competition now.” Pros get the full story here: http://politico.pro/1LIViQK
GOTTA GET DOWN ON THURSDAY: Good morning and thanks for reading POLITICO’s Morning Transportation, your daily tipsheet on trains, planes, automobiles and ports. I’m your host, Heather, signing off for a long weekend touring Cape Cod as first-time visitor. Hope y’all have a safe and happy July Fourth!
Don’t be a stranger! Send travel tips and gripes to hcaygle@politico.com or shoot a tweet my way @heatherscope. And don’t forget to follow Team Transpo: @jascholtes, @kathrynwolfe and @morning_transpo.
Programming note: MT will be taking Friday off in honor of Independence Day (’Merica!). My intrepid colleague Kathryn A. Wolfe will be taking the reins of MT bright and early Monday so please send any hot tips her way via kwolfe@politico.com
“There’s an airport there out near the edge of town…” http://bit.ly/1GNqBDl (h/t Adam Snider)
T&I PUNTS ON FAA BILL: The House Transportation Committee pulled back plans to unveil its long-awaited FAA reauthorization Wednesday, citing scheduling issues. Kathryn brings us this dispatch from Capitol Hill: After canceling a briefing with press scheduled for Wednesday morning, the House Transportation Committee now says it has no plans to unveil its FAA reauthorization bill this week, and will push back the schedule by roughly a month because there is not enough floor time to pass it in July. When asked about the reason for the delay, a committee spokesman said, “That’s a question that would be better asked to the Leader’s Office but it has to do with floor time.” Indeed, just before the committee announced its delay, the House GOP leadership sent out its floor plans for July — minus an FAA bill.
K Street reacts: The unexpected holdup has left K Streeters, trade groups and even Hill staffers scratching their heads and furiously working their smartphones trying to figure out why. “I don’t know the answer yet! Trying to figure it out,” said one plugged-in lobbyist. “There were rumors that some of the groups weren’t happy, but no one is talking yet.” Maybe it was unrest over provisions in the bill to separate air traffic control functions from the FAA. “I heard there were issues with the ATO portion,” another said. One head of an aviation trade group said, diplomatically, “Frankly, a bill with so many moving parts is a tough one to pull together. Too many issues outstanding.”
MT sidenote: T&I leaders have been vocal in recent months about wanting to get an FAA bill through the committee and onto the floor in July to ensure there was enough time for negotiations with the Senate over a final package before the Sept. 30 deadline. This latest setback — which MT bets probably isn’t just based on the congressional calendar — means a temporary extension of current law is all but guaranteed come end of September.
HAPPENING TODAY: NHTSA TAKES ON CHRYSLER MISSTEPS — This morning, NHTSA will kick off a public hearing aimed at calling attention to a long list of likely missteps by automaker Fiat Chrysler in its handling of nearly two dozen safety recalls. The hearing is unique — NHTSA doesn’t normally haul automakers up to DOT headquarters for a public examination — and will include testimony from federal safety investigators, Fiat Chrysler representatives and the public. “These are not isolated incidents, but instead are multiple issues in multiple recalls,” NHTSA spokesman Gordon Trowbridge told MT.
The Detroit News has more on the hearing’s significance: “The public forum is the latest sign of NHTSA’s get-tough attitude with automakers. The agency came under criticism from the Transportation Department’s Office of Inspector General in a recent audit for failing to hold automakers accountable and properly investigate safety issues. … Conflicts date to the government’s demand for the recall of 2.7 million Jeeps linked to more than 60 deaths due to gas tank fires that have occurred when SUVs are hit from behind. In recent months, the agency has questioned a growing number of Fiat Chrysler actions. The automaker could face fines of $35 million in each of the recalls if NHTSA determines it failed to meet legal requirements.” Full story: http://bit.ly/1Kt6O0D
DOT MOVES TO TIGHTEN PIPELINE RULE: DOT is using a new proposed rule, published Wednesday, to push pipeline companies to alert first responders of oil and gas leaks more quickly. Elana Schor with the deets: “The proposed rule from DOT’s Pipeline and Hazardous Materials Safety Administration also would require pipeline operators to notify the regulator when they reverse the flow on a pipeline or change the type of fuel they carry. In addition to fulfilling a leak-notification mandate Congress first issued in 2011, the PHMSA proposal would make good on a 2012 recommendation from NTSB to clarify techniques to detect cracks that were linked to the massive oil spill into Michigan’s Kalamazoo River five years ago this month.” Read more: http://politico.pro/1LIlBGJ
ONE MONTH TO GO ON OPEN SKIES: If you’ve got something to say on the ongoing Open Skies dispute between major U.S. carriers and their Gulf country competition, fire up those pens because you’ve got one month left. The administration has officially set an Aug. 3 deadline to submit comments to the Open Skies docket (there will also be an Aug. 24 deadline for any follow-up commentary). The battle has caused tension between aviation and travel groups and has led to near daily back-and-forth missives from supporters of the Gulf carriers and backers of the U.S. airlines’ claims.
THE AUTOBAHN (SPEED READ):
-Airlines look to digital tags to streamline baggage checks. The Wall Street Journal: http://on.wsj.com/1R6mNqQ
-The Chamber’s transportation lobbyist Janet Kavinoky with a lively podcast on traffic problems and what it’s costing you: http://uscham.com/1LVsyRD
-Should we be using two feet to drive? Vox takes a look: http://bit.ly/1f1POTM (h/t Bob King)
-NFL teams love to use drones, just don’t tell the FAA. The Washington Post: http://wapo.st/1HwBtcA
-A good explainer on the taxes and fees tacked onto your plane ticket, via USA Today: http://usat.ly/1IsMblf
THE COUNTDOWN: Highway and transit policy expires in 30 days. DOT appropriations run out and the FAA reauthorization expires in 91 days. The 2016 presidential election is in 497 days.
Tags: policy, transportation