AS WE mentioned last week, some flyers are suing the four big American carriers—American, United, Delta and Southwest—arguing that they colluded to keep ticket prices high. The Department of Justice was already looking for evidence that the same airlines were tacitly agreeing not to compete with one another on certain routes, thus giving them much higher pricing power. As he posted at the time, Gulliver's hunch is that there is no shady agreement between the carriers. The more likely reason for the lack of competition is, well, the lack of competition—the result of the wave of airline mergers approved by regulators over the past few years that has halved the number of big players. A recent study by the Associated Press (AP), a media outfit, seems to back this hunch up. It found that the dwindling roster of large carriers has had a significant effect on choice at American airports. At 40 of the country’s 100 biggest hubs, AP reports that a single carrier now controls over 50% of the market, as measured by the number of seats for sale. This compares with 34 a decade ago. At 93 of the 100 either one or two airlines account for the majority of seats, up from 78 previously.

AP quotes Doug Parker, boss of American Airlines, rejecting the notion that consolidation has hurt travellers, saying: “We have increased flying out of each of our hubs. We want to expand. That’s good for consumers, not bad.” That seems to be willfully missing the point. The reason that American Airlines can expand at its hubs is because of all those slots freed up by former competitors that have been swallowed up. Contrary to Mr Parker’s claim, allowing a dominant carrier more control at an airport is worse for consumers, not better.

It is only fair to point out that the fat profits America's airlines are currently making—a combined $19.7 billion in the past two years—must be put into the context of some equally corpulent recent losses. And while AP found that prices have risen by 5% above inflation over the past decade, as the economy has improved there has also been more demand for air travel, so it is not particularly surprising. But against this, fuel costs have also plummeted. What is more, the small increases in the headline fares do not take into account the fact that airlines are pulling in a lot more from ancillary revenue. The top three American carriers reaped $13.8 billion in add-on charges in 2014, according to IdeaWorks, a research firm. Across the world, it says, carriers' ancillary revenue grew by 21% in the space of a year to $38.1 billion.

To break this all down, it is interesting to see the effect that consolidation has had at individual airports. AP found that:

The mergers have altered the competitive landscape at airports big and small. • In Indianapolis, the two leading airlines controlled just 37 percent of the seats a decade ago, and domestic fares were 9 percent below the national average. Then the city’s main airline, ATA, went bankrupt and was bought by Southwest, and its No. 2 carrier, Northwest, was absorbed by Delta. Now two airlines control 56 percent of the seats, and airfares are 6 percent above the national average.





• The Dayton, Ohio, airport was served by 10 airlines in 2005, and fares were 5 percent below average. Today, just four airlines fly there and prices are almost 10 percent above average.





• Big hub airports aren’t immune. In 2005, US Airways controlled nearly 66 percent of the seats in Philadelphia. Now that US Airways has merged with American, the combined airline has 77 percent of the seats. Airfare has gone from 4 percent below average to 10 percent above it.





• Delta’s hold on Atlanta, the world’s busiest airport, increased during that same period from 78 percent of seats to just over 80 percent. At the same time, low-cost AirTran merged into Southwest and reduced flights there. Domestic airfares at the airport went from nearly 6 percent below average to 11 percent above.





• Some cities are actually seeing lower fares than they did a decade ago. Prices in Denver were once 5.6 percent higher than the national average. Now that United’s market share there has dropped to 41 percent from 56 percent, fares are almost 15 percent lower than the rest of the country.





Reading that, it is easy to see why the big carriers would be so keen to maintain the status quo. And why something should be done to break it.