Associate Professor of Economics Marc Remer recently appeared on NPR's "Weekend Edition Sunday" to discuss the impact of airline consolidation on customers.

Nearly 50 years after the deregulation of the airline industry, the four largest U.S. airlines (United, American, Delta, Southwest) control 75% of the market. Although it did not ultimately happen, a recently proposed United-American merger further pushed airline consolidation into the minds of consumers and economists.

Airline industry advocates argue that consolidation allows airlines to serve customers through large hubs, which keep costs down and offer travelers lower prices and a wider choice of destinations. Remer argues, however, that consolidation has reduced competition between airlines and that such hubs have grown so large as to create "monopolies and duopolies" for each route.

"The hubs have become 'hubbier' in some sense," he says. "It creates fewer overlap routes between the airlines. And when you have fewer head-to-head overlap routes, you get less competition, and that gives these airlines more market power."

Remer has co-authored two papers on the topic that are publicly available online at the Social Science Research Network; he and Reed Orchinik '19 published "What’s the Difference? Measuring the Effect of Mergers in the Airline Industry" in 2023 and "Multimarket Contact and Prices: Evidence From an Airline Merger Wave" in 2024.

The entertainment industry is also prompting antitrust concerns. On July 13, a coalition of 12 states, led by California, sued to block a $111 billion Paramount–Warner Bros. merger, arguing that it will lead to excessive concentration in the theatrical and basic cable markets.

Discussing the merger with Variety, Remer says, “California has a pretty large budget, but it’s really nothing compared to the infrastructure the federal government has.”

Remer says it appears that the Trump administration is not bringing as many antitrust cases as the Biden administration did, but it is not necessarily unique, as Republicans typically do not litigate antitrust matters as frequently as Democrats.

What is unique, explains Remer, is the frequency with which Democratic states are joining together to bring cases that the federal government is not following through on. He references the Ticketmaster/Live Nation merger in addition to the Democrat opposition to the Paramount/Warner Bros. merger.

Remer says the Biden administration was very tough on antitrust enforcement in the airline industry, successfully blocking JetBlue and American's northeast alliance and the JetBlue/Spirit merger, whereas the Trump administration has signaled a willingness to allow more consolidation.

"It will be interesting to see if the states step in if there is another airline merger," says Remer.

Marc Remer is an economist and educator who specializes in mergers and other antitrust matters. He previously worked as a research economist for the Antitrust Division of the US Department of Justice (DOJ), where he specialized in evaluating the competitive effects of mergers. Professor Remer has been retained as an expert by the DOJ on matters related to horizontal mergers. His research covers topics in industrial organization such as asymmetric pricing, airline industry mergers, gasoline industry competition, price fixing, and pass-through.