The systematic grant of antitrust immunity to major airline alliances has legally eliminated price competition over the North Atlantic, driving up international airfares through authorized revenue-pooling cartels.
## Background
This video was published on YouTube by the channel Wendover Productions on January 27, 2026. According to the page description, the episode includes a sponsorship promotion to try Rocket Money for free, alongside links to the creator's social media platforms and production credits.
## TL;DR
The video exposes how a handful of major airlines operate legalized business cartels across the Atlantic, effectively eliminating price competition through joint venture agreements and antitrust immunity. While airlines argue these alliances seamlessly integrate global flight networks, historical evidence shows that deep cooperation is entirely possible without revenue pooling and price-fixing. Passengers ultimately pay the price through inflated fares on routes with low competition, exemplified by steep ticket price disparities between highly competitive and isolated European destinations. Furthermore, dominant airline alliances actively use their massive market power to aggressively squeeze out independent, low-cost competitors like Norwegian Air to maintain their lucrative market supremacy.
## Atmosphere & style
The presentation is analytical, deeply investigative, and revelatory, systematically dismantling the illusion of choices presented to travelers at major airports. The host guides the audience with a sharp, grounded narrative style that transitions from macro-level economic critiques to precise, data-driven case studies. It carries an undercurrent of frustration regarding regulatory failures and bureaucratic inertia, making the viewer feel like they are uncovering a massive corporate secret hiding in plain sight. The tone wraps up with a candid, transparent pivot as the creator shares a vulnerable personal anecdote about their own financial oversight to seamlessly introduce the sponsor.
## Key takeaways
- The North Atlantic is the world's largest and most lucrative long-haul aviation market due to tight cultural and economic bonds between Europe and North America.
- The apparent vibrant competition among 33 airlines operating 126 routes from New York to Europe is merely a facade covering identical pricing on key routes.
- Airlines like United, Lufthansa, Brussels Airlines, Swiss, and Austrian explicit collude on routes, capacity, and fares through legalized business cartels.
- The big three transatlantic joint venture entities (Star Alliance, SkyTeam, and oneworld) control a staggering 75% of all Europe-bound flights from New York.
- Regulators in both Europe and the United States have officially granted these airlines exemptions from antitrust laws, legally authorizing market consolidation.
- Delta and Virgin Atlantic secured antitrust immunity by arguing that coordinating schedules was required to overcome London Heathrow's severe slot restrictions and compete effectively.
- A regulatory domino effect has occurred since 1996, with the Department of Transportation repeatedly approving new joint ventures to help airlines rival pre-existing immunized cartels.
- The core operational goal of these joint ventures is the seamless integration of transatlantic hub-and-spoke networks, funneling passengers into connecting short-haul flights.
- Historical and modern examples (like American and Qatar, or United and Emirates) prove that deep network integration and through-ticketing do not legally require antitrust immunity.
- Increased airline competition directly correlates with lower airfares, as seen in highly competitive Italian and Spanish markets compared to those dominated by fewer legacy carriers.
- On a per-mile basis, transatlantic routes rank among the highest-cost long-haul flights globally, serving as core profit pools for major airline groups.
- Dominant airline alliances leverage their immense market power to aggressively match routes and pricing of low-cost independent competitors like Norwegian Air to drive them out of business.
- Once independent low-cost competition is eliminated, legacy carriers promptly cancel their defensive matching routes rather than maintaining them for genuine market demand.
- The ongoing approval of antitrust immunity represents a regulatory failure driven by bureaucratic inertia rather than a logical benefit to consumers.
## Detailed walkthrough
### The Facade of Transatlantic Competition
Europe and North America share the tightest cultural and economic bonds of any two continents, turning the North Atlantic into the world’s largest and most lucrative long-haul aviation market. At a glance, places like JFK Airport present a picture of vibrant, healthy competition. Travelers can watch dozens of distinct European airline logos glide down the runways. On paper, 33 different airlines operate 126 routes connecting New York to Europe. This spans global giants like British Airways, Air France, and KLM flying into massive hubs like London, Paris, and Amsterdam, alongside smaller carriers like Air Serbia, High Sky, or Azores Airlines servicing niche destinations like Belgrade, Bucharest, or Ponta Delgada.
However, looking beneath the surface reveals that this colorful variety of logos is "merely a facade." If a passenger wants to fly from New York to Brussels, they might think they have a competitive choice between a 6:10 p.m. departure on Brussels Airlines from JFK or a 6:30 p.m. flight on United Airlines out of Newark. In reality, the traveler lacks any choice on what price to pay. Almost every single day, both airlines charge identical fares because they effectively operate as a single carrier. The same dynamic plays out for flights to Munich; United runs a 5:15 p.m. flight from Newark, Lufthansa runs a 5:30 p.m. flight from JFK, and another United flight departs Newark at 8:30 p.m.—all priced down to the dollar identically.
- **Total Market Scope (NY to Europe):** 33 airlines running 126 distinct routes.
- **Identical Pricing Example (Brussels):** Brussels Airlines (6:10 p.m. from JFK) and United (6:30 p.m. from Newark).
- **Identical Pricing Example (Munich):** United (5:15 p.m. Newark / 8:30 p.m. Newark) and Lufthansa (5:30 p.m. JFK).
The Legalized Business Cartel
This complete lack of price variation is driven by a business cartel. Airlines like United, Lufthansa, Brussels Airlines, Swiss, and Austrian Airlines are explicitly colluding. Together, these corporate groups dictate how often they fly, which routes they service, and exactly how much they charge. Because they pool their transatlantic revenue and distribute it according to strict joint venture agreements, they are indifferent to which specific airline a passenger flies. United earns the exact same amount of money whether a traveler books a seat on a United aircraft or takes a Lufthansa flight to Frankfurt. From a standpoint of competition economics, these five separate brands operate as a singular entity.
This tight collusion directly challenges legal frameworks. Article 101 of the Treaty on the Functioning of the European Union explicitly prohibits agreements that "directly or indirectly fix purchase or selling prices." While this blatant price-fixing would normally land any ordinary corporation in severe legal jeopardy, these airlines openly discuss the practice with investors. They are protected by an official European Commission document that grants them an exemption from antitrust laws. Regulators in both Europe and the United States have legally authorized these cartels to collude against the consumer, severely concentrating the market.
- **The Big Three Transatlantic Entities:**
- **Star Alliance JV:** United, Lufthansa, Brussels Airlines, Swiss, and Austrian.
- **SkyTeam JV:** Delta, Virgin Atlantic, KLM, and Air France (controls roughly 26% of the New York-transatlantic market).
- **oneworld JV:** American Airlines, Aer Lingus, British Airways, Finnair, Iberia, and Level (controls roughly 18% of the New York-transatlantic market).
- **Market Dominance:** These three entities control a staggering 75% of all Europe-bound flights departing from New York.
- **Smaller Market Impact:** In smaller regions like Washington D.C., the big three joint ventures command 85% of all transatlantic flights, a figure projected to hit 89% once SAS and ITA Airways secure approval to integrate into SkyTeam and Star Alliance.
The Schedule Loophole and London Heathrow's Slot Deficit
The legal mechanism allowing this consolidation is managed right by Dulles Airport at the U.S. Department of Transportation (DOT). American law allows the DOT to grant antitrust immunity, provided the airlines can prove that the public benefits of collusion "outweigh the negative consequences of reduced competition." This prompts airlines to file exhaustive, winding legal arguments. A prime example unfolded between 2012 and 2019 when Virgin Atlantic sought entry into Delta's transatlantic joint venture. Operating under the core legal claim that "the joint venture will be a more effective competitor on US-UK routes," Delta and Virgin argued they needed to pool resources to offer a "meaningful competitive alternative" to the dominant American Airlines and British Airways alliance.
Delta and Virgin based their plea on schedule frequency and time-of-day coverage. London is a premier destination dominated by lucrative business travelers who buy premium business class seats and last-minute tickets. These corporate travelers are fiercely schedule-dependent; if a meeting finishes at 2:00 p.m., they demand a 5:00 p.m. flight home from Heathrow to minimize time away from family. Companies looking to sign large corporate travel contracts rejected Delta, explicitly telling the airline that its service frequencies and time-of-day coverage between New York and London Heathrow were "inadequate."
Adding more flights independently was impossible because London Heathrow is one of the world's most severely slot-restricted airports. Operating with just two runways, every single landing slot is fully utilized, pushing slot values into tens of millions of dollars. The highly sought-after early morning arrival slots for overnight transatlantic flights rarely go up for sale. By forming an immunized joint venture, Delta and Virgin explained they could strategically shuffle their westbound schedules to eliminate overlapping departure times and stagger flights throughout the day. This schedule coordination minimized their longest service gap to just three hours between Virgin's 5:00 p.m. and 8:00 p.m. flights, a pitch that ultimately convinced the DOT to waive antitrust rules.
- **Corporate Dissatisfaction:** Corporate buyers flatly refused to commit business travel accounts to Delta due to poor time-of-day slots at Heathrow.
- **Heathrow Infrastructure Bottleneck:** Only two operational runways force an extreme supply deficit, making individual slots worth tens of millions of dollars.
- **Westbound Schedule Solution:** Coordinated staggering of flights to guarantee consistent coverage, narrowing the widest service gap down to a single 3-hour window.
The Domino Effect of Hub Integration
The DOT's approval of Delta and Virgin's venture carried a quiet, ironic admission: if the public benefit was creating a tool to fight American Airlines and British Airways, then that pre-existing American-British joint venture must have established a public detriment. Tracking this regulatory logic backward reveals a historical domino effect. The DOT approved American and British Airways in 2010 because Delta already held immunized partnerships. Delta's earlier joint venture with Air France was approved in 2002 to help them compete against the United-Lufthansa cartel, which originally won approval all the way back in 1996.
The original 1996 vision for these joint ventures focused on expanding the classic "hub-and-spoke" network model across an ocean. Following aviation deregulation in the 1970s and 1980s, carriers organized their flights around central hubs. They timed big banks of flights to land simultaneously, allowing passengers from small towns to catch tightly synchronized connecting flights out to major cities. While this revolutionized domestic short-haul travel, it did not fully translate to international long-haul flights. United could easily fly you to London or Paris, but if your final destination was a smaller city like Bilbao, Lyon, or Stuttgart, booking the entire journey through an American carrier was incredibly difficult.
The joint venture aimed to seamlessly stitch these networks together. Today, this integration forms the bedrock of international aviation. Every morning, eight United wide-body aircraft land at Lufthansa's Frankfurt hub, pouring well over a thousand passengers into the terminal. The majority of these travelers navigate the airport's maze of terminals to board connecting short-haul Lufthansa flights. Lufthansa carefully coordinates its capacity to align with destinations popular with American travelers that United doesn't serve directly—such as Stockholm, Vienna, or Istanbul. Because they pool their revenue, it is in both airlines' shared financial interest to make sure their joint network offers a faster, cheaper, and more streamlined itinerary than competing hubs in Amsterdam or Paris.
- **Historical Chain of Antitrust Immunity Approvals:**
- **1996:** United and Lufthansa (The foundational transatlantic joint venture).
- **2002:** Delta and Air France (Approved to rival United/Lufthansa).
- **2010:** American Airlines and British Airways (Approved to rival Delta/Air France).
- **2012–2019:** Delta and Virgin Atlantic (Approved to rival American/British Airways).
- **Daily Frankfurt Exchange:** 8 United wide-body jets deliver over 1,000 daily passengers directly into Lufthansa's connecting network.
Proving Antitrust Immunity is Unnecessary
While this cross-continental network integration has injected connectivity into global travel, a major question remains: was antitrust immunity actually required to achieve it? Historical evidence suggests otherwise. United and Lufthansa did not wait for their 1996 antitrust waiver to link their networks; they began deep integration three years earlier, in 1993. By 1993, travelers from towns like Tampa, Orlando, Philadelphia, New Orleans, and Phoenix could seamlessly book single-ticket itineraries through Dulles Airport straight to Frankfurt, connecting onto eight different German cities and Vienna. The airlines avoided antitrust violations by completely steering clear of price-fixing and revenue pooling. Instead, they simply paid each other for the individual seats utilized on each other's schedules.
Modern global aviation offers plenty of evidence that deep, non-immunized partnerships work exceptionally well without sacrificing consumer competition:
* **American Airlines & Qatar Airways:** American runs a flight from Philadelphia to Doha that arriving at 4:30 p.m., perfectly positioning passengers to catch Qatar’s massive 6:00 p.m. to 9:00 p.m. eastbound flight bank. In reverse, Qatar shapes its American routes directly around American Airlines' major hubs in Los Angeles, Dallas, Chicago, New York, and Miami.
* **United Airlines & Emirates:** United runs a New York to Dubai route explicitly designed to feed Emirates' onward global network, while Emirates flies directly into major United hubs to funnel passengers deep into the United States.
* **Delta Air Lines & Riyadh Air:** Delta has established a nearly identical arrangement with the upcoming Riyadh Air, aligning hub operations across hemispheres.
None of these modern partnerships hold antitrust immunity. They deliver all the consumer perks of network integration, schedule coordination, and through-ticketing while forcing the airlines to remain fierce standalone competitors. For example, a traveler looking to fly from Boston to Delhi is presented with two distinct routing options at two entirely different price points: American Airlines via New York, or Qatar Airways via Doha. Because neither carrier can lean on an immunized revenue pool, they are forced to offer superior pricing and better service to actively win the traveler's dollar.
The Cost of Low Competition in the Italian Market
The explicit downside of granting antitrust immunity is plain to see when looking at ticket prices on routes that lack strong, independent competitors. Italy stands out as a massive destination for American tourists. From New York, major markets like Milan and Rome feature four genuine, unaligned competitors fighting for travelers' business. This fierce competition keeps average airfares relatively low, sitting at a modest $566 for Milan and $486 for Rome during the peak travel month of August.
In sharp contrast, smaller Italian markets with less competition see their pricing power tilt heavily back toward the airlines. On routes to Venice, Naples, Bari, and Palermo, only two competitors go head-to-head, driving ticket prices up significantly. Furthermore, the specific competitive dynamics on these routes dictate just how high those prices climb. In Venice and Naples, the matchup is United versus Delta—two massive, well-matched legacy carriers. But in Bari and Palermo, United faces off against Neos, a small Italian carrier operating just six long-haul aircraft on a limited weekly schedule. Because Neos has minimal brand recognition in the United States, it struggles to pose a serious threat to United for American-origin traffic. Rather than launching a price war, United simply lets Neos undercut its fares by a couple hundred dollars to capture a tiny slice of the market, keeping United's average ticket prices highly inflated.
- **August Peak Pricing Comparison (High vs. Low Competition):**
- **Milan (4 Competitors):** $566 average fare.
- **Rome (4 Competitors):** $486 average fare.
- **Venice (United vs. Delta):** $579 average fare.
- **Naples (United vs. Delta):** $578 average fare.
- **Bari (United vs. Neos):** $860 average fare.
- **Palermo (United vs. Neos):** $819 average fare.
- **The Indirect Exception:** Delta's route from New York to Catania bucks the trend slightly with a $600 average price tag, but it faces indirect geographic competition from the United and Neos routes into nearby Palermo, anchoring its rates.
- **The Spanish Market Parallel:** Spain mirrors this exact economic trend. Highly competitive hubs like Barcelona and Madrid consistently showcase the lowest average airfares, while lower-competition destinations like Santiago de Compostela, Bilbao, Malaga, and Palma de Mallorca command the absolute highest prices on the map.
Pricing Power and the Transatlantic Fare Premium
A clear economic trend emerges when analyzing Italian and Spanish destinations operating out of New York: increased competition directly correlates with lower airfares. Conversely, when airlines face fewer competitors, they gain immense pricing power, allowing them to charge passengers higher rates without risking the loss of their business. Over the Atlantic, the systematic erosion of competitiveness—driven by antitrust immunity waivers—has granted major carriers unprecedented pricing power, driving up overall airfares.
This phenomenon is vividly illustrated by comparing JetBlue's operations from Boston. San Diego and Dublin are relatively close in distance from Boston, with Dublin being only about 400 miles (650 km) further. JetBlue utilizes similarly configured Airbus A321 aircraft for both routes, yet their August pricing reveals a staggering disparity. The transcontinental flight to San Diego costs an average of $186, while the transatlantic route to Dublin commands $476—two and a half times more. Remarkably, JetBlue remains the lowest-cost operator on the Dublin route, likely because it stands outside the major transatlantic joint ventures. For comparison, Delta Air Lines charges slightly more at $485, and Aer Lingus pushes ticket prices up to $536.
Admittedly, comparing domestic and international routes is imperfect. Transatlantic operations incur legitimate additional costs, including Extended-range Twin-engine Operational Performance Standards (ETOPS) certification, international taxes, and government fees. Furthermore, airlines deploy unique pricing strategies that inherently inflate the cost of one-way tickets to Europe. Nevertheless, on a per-mile basis, transatlantic routes rank among the highest-cost long-haul flights globally. Airlines openly, if indirectly, acknowledge this reality to their investors. Lufthansa recently touted the transatlantic market as its "core profit pool" in an investor presentation, and International Airlines Group (IAG), the parent company of British Airways, echoed the exact same sentiment in a separate briefing.
- **Boston to San Diego vs. Boston to Dublin comparison:**
* **Distance difference:** Dublin is only 400 miles (650 km) further than San Diego.
* **Aircraft type:** Similarly configured Airbus A321s for both.
* **JetBlue average August fares:** $186 for San Diego (transcontinental) vs. $476 for Dublin (transatlantic).
- **Competitor pricing for Boston to Dublin:**
* **JetBlue:** $476 (lowest-cost operator, non-joint venture).
* **Delta Air Lines:** $485.
* **Aer Lingus:** $536.
The Aggressive Tactic to Bleed Norwegian Air Dry
The issues surrounding transatlantic travel extend beyond mere consolidation into larger singular entities. These dominant airline alliances routinely leverage their massive market power to aggressively drive genuine independent competition completely out of business. In the late 2010s, Norwegian Air made a major push into long-haul operations. They rapidly expanded to become the largest foreign carrier serving the New York market and the fifth-largest transatlantic airline overall, trailing only United, Delta, American, and British Airways. By operating a low-cost model, Norwegian severely undercut the legacy carriers' prices, posing a direct threat to their market supremacy.
This threat was felt most acutely by British Airways, whose primary base at London Gatwick Airport overlapped directly with Norwegian's operations. In response, BA's parent company, IAG, executed an aggressive strategy designed to bleed the upstart carrier dry. Every time Norwegian launched a new long-haul route, IAG immediately matched it to saturate the market and undercut prices. When Norwegian began flying from Gatwick to New York, British Airways launched identical Gatwick to New York flights—even though BA's only other long-haul flights out of Gatwick were traditionally restricted to warm-weather leisure destinations.
This aggressive mirroring pattern repeated across the United States and Europe:
* When Norwegian launched Gatwick to Oakland, California, BA launched its own Oakland flights, completely ignoring the fact that they already operated robust services to San Francisco International Airport just 10 miles (16 km) away.
* When Norwegian started Gatwick to Fort Lauderdale, British Airways added Fort Lauderdale flights, despite already serving Miami International Airport a mere 20 miles (32 km) away.
* When Norwegian expanded with flights from Barcelona to Oakland and Los Angeles, IAG went so far as to establish an entirely new low-cost subsidiary called Level to mimic those exact routes.
The strategy ultimately worked. Flooded by artificial capacity and aggressive pricing, Norwegian's long-haul operations began to falter in 2019, forcing them to frantically reshuffle their network. Following a total operational shutdown during the COVID-19 pandemic, Norwegian chose never to reactivate its Boeing 787 Dreamliners, permanently abandoning long-haul service. Proving that these routes were launched purely out of anti-competitive intent rather than genuine market demand, IAG promptly canceled almost all of its matching routes. Today, with the sole exception of Barcelona to Los Angeles, none of the defensive routes launched by IAG remain in operation. While it is not guaranteed that Norwegian's long-haul model would have survived indefinitely on its own, IAG's expensive, defensive behavior proved they viewed the low-cost carrier as a lethal threat.
Regulatory Failure and the "Snowball" Effect
It remains profoundly difficult to understand the logic of American and European regulators regarding the continued approval of antitrust immunity over the Atlantic. The public-facing justification that these alliances benefit consumers is clearly faulty. Even attempting to read between the lines reveals a glaring lack of regulatory rationale. It is entirely possible that the initial approvals in the 1990s were simply a genuine mistake, born during a tumultuous post-deregulation era when long-term consequences were poorly understood, and market stability was heavily prioritized over open competition.
However, that foundational mistake has snowballed over the decades. In recent years, the primary logic driving regulatory approvals appears to be nothing more than bureaucratic inertia: "that's the way it's always been done." Regulators seem to blindly grant more antitrust immunity waivers as long as the proposed corporate collusion mirrors the structure of existing collusion. By actively choosing not to rock the boat, regulatory bodies are directly failing the consumers they are designated to protect. Instead of fostering fair pricing, they are helping legacy airlines charge more, rendering a trip across the pond increasingly inaccessible for everyday travelers.
Personal Finance Wake-Up Call with Rocket Money
Shifting gears to a slightly embarrassing personal story, the creator shares a recent financial revelation brought about by the video's sponsor, Rocket Money. Candidly admitting to not always being on top of personal finances, the creator explains that while fortunate enough to have sufficient savings to avoid tracking every single penny, a recent drop in account balances had caused some confusion. There was no noticeable drop in income or spike in everyday spending, leaving the root cause a mystery until the creator downloaded Rocket Money and linked bank and credit card accounts to test the app before endorsing it.
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By identifying and canceling these unwanted subscriptions, the creator instantly cut back on approximately $100 of wasteful monthly spending. Having immediately proven its practical value, the app has become a staple in the creator's financial routine. Beyond subscription tracking, the automated spending reports offer an effortless breakdown of cash flow, predictably revealing that the creator's highest discretionary expense is travel. The app also features customizable budgeting tools that track progress dynamically over time. Viewers looking to take control of their own financial tracking can get started for free by scanning the on-screen QR code or clicking the link provided in the video description.
## Notable quotes
> merely a facade.
> directly or indirectly fix purchase or selling prices.
> the joint venture will be a more effective competitor on US-UK routes
> meaningful competitive alternative
> inadequate
> outweigh the negative consequences of reduced competition.
> core profit pool — Lufthansa
> that's the way it's always been done.
## Mentioned
JFK Airport, British Airways, Air France, KLM, Air Serbia, High Sky, Azores Airlines, Brussels Airlines, United Airlines, Newark, Lufthansa, Swiss, Austrian Airlines, Star Alliance, SkyTeam, oneworld, Delta, Virgin Atlantic, American Airlines, Aer Lingus, Finnair, Iberia, Level, SAS, ITA Airways, U.S. Department of Transportation, London Heathrow, Qatar Airways, Emirates, Riyadh Air, Neos, JetBlue, Airbus A321, International Airlines Group, Norwegian Air, London Gatwick Airport, Boeing 787 Dreamliner, Rocket Money
Transatlantic aviation presents an illusion of competition, but legal antitrust immunity allows three major joint ventures to operate as cartels that fix prices, limit capacity, and inflate fares across the North Atlantic.
Legalized Price Collusion Among Major Alliances
Despite dozens of airline brands operating routes between North America and Europe—such as 33 carriers serving 126 routes from New York—actual pricing is heavily centralized. Through immunized joint ventures within the Star Alliance, SkyTeam, and oneworld groupings, legacy carriers openly coordinate flight schedules, pool transatlantic revenues, and set identical ticket prices. For instance, flights from the New York area to Brussels (on United and Brussels Airlines) or Munich (on United and Lufthansa) frequently post identical fares down to the dollar because revenue sharing eliminates economic competition between partners.
Regulators on both sides of the Atlantic have formally exempted these arrangements from antitrust laws, such as Article 101 of the Treaty on the Functioning of the European Union. Together, the three immunized joint ventures control roughly 75% of Europe-bound flights departing New York, with Delta's SkyTeam holding about 26% and oneworld controlling 18%. In smaller hubs such as Washington, D.C., these entities command 85% of transatlantic service, projected to reach 89% as carriers like SAS and ITA Airways integrate.
Regulatory Dominoes and Non-Immunized Precedents
Antitrust immunity from the U.S. Department of Transportation (DOT) legally requires proof that public benefits outweigh the anti-competitive harms. When Delta and Virgin Atlantic sought joint venture approval between 2012 and 2019, they argued that slot restrictions at London Heathrow prevented independent expansion, requiring schedule coordination to offer a viable alternative to American Airlines and British Airways. This argument revealed a regulatory cycle of defensive approvals: American and British Airways received immunity in 2010 to match Delta and Air France (approved in 2002), which in turn had been granted immunity to challenge United and Lufthansa's foundational 1996 alliance.
The premise that antitrust immunity is necessary for seamless international network connectivity is contradicted by past and current airline partnerships. In 1993, United and Lufthansa established integrated passenger connections across German cities and Vienna without revenue pooling or price-fixing, simply paying each other for utilized seats. Today, major carriers run extensive, highly coordinated global networks without antitrust immunity, including American Airlines with Qatar Airways, United with Emirates, and Delta with Riyadh Air, demonstrating that schedule synchronization and through-ticketing do not require price coordination.
Pricing Power and the Transatlantic Fare Premium
Route-level data shows that lower competition directly correlates with higher airfares. In Italy, highly contested destinations like Milan and Rome, served by four genuine competitors, saw average August peak fares of $566 and $486 respectively. Conversely, routes with limited competition experienced dramatic price hikes: New York to Bari and Palermo averaged $860 and $819, where United faced only minor competition from niche carrier Neos. Similar patterns exist across Spain, where competitive hubs like Madrid and Barcelona feature significantly lower fares than secondary destinations such as Bilbao or Palma de Mallorca.
This pricing leverage creates an outsized premium on transatlantic flying compared to domestic long-haul routes. JetBlue's August flights from Boston to Dublin averaged $476, while a transcontinental flight of similar distance to San Diego on the same Airbus A321 aircraft cost $186. Even with added regulatory and operational expenses, transatlantic flights generate exceptional margins per mile, leading parent companies Lufthansa and International Airlines Group (IAG) to publicly describe the transatlantic corridor as their core profit pool.
Aggressive Strategies Against Low-Cost Disruptors
Dominant airline alliances have actively leveraged their capacity to suppress independent low-cost competition. In the late 2010s, Norwegian Air emerged as the fifth-largest transatlantic carrier and the largest foreign carrier in New York, threatening legacy pricing power. British Airways' parent company, IAG, responded by directly matching Norwegian's point-to-point routes out of London Gatwick, adding flights to New York, Fort Lauderdale, and Oakland—despite already serving Miami and San Francisco nearby.
IAG went further by creating a low-cost subsidiary, Level, specifically to counter Norwegian's flights from Barcelona to Oakland and Los Angeles. This artificial influx of capacity forced Norwegian into operational distress by 2019, culminating in the permanent abandonment of its long-haul Boeing 787 fleet following the COVID-19 pandemic. Once Norwegian withdrew, IAG canceled nearly all of its defensive overlapping routes, showing they were operated primarily to extinguish a low-cost rival rather than meet baseline consumer demand.
The continued expansion of transatlantic joint ventures reflects bureaucratic inertia among American and European regulators rather than sound competition policy. By repeatedly granting immunity to mirror existing pacts, regulatory authorities have entrenched an oligopoly that inflates fares and restricts genuine market competition for consumers.
merely a facade.
directly or indirectly fix purchase or selling prices.
the joint venture will be a more effective competitor on US-UK routes
meaningful competitive alternative
inadequate
outweigh the negative consequences of reduced competition.
Lufthansa: core profit pool
that's the way it's always been done.
Original transcript
[0:00] Europe and North America are the two
[0:02] most culturally and economically
[0:03] interlin continents in the world. Yet,
[0:06] an ocean stands between them. A colossal
[0:08] number of people travel between the two
[0:10] for work, for family, or for fun, making
[0:12] the North Atlantic the largest and most
[0:14] valuable longhaul aviation market in the
[0:16] world. Logic would then follow that it's
[0:19] the most competitive longhaul aviation
[0:20] market in the world. [music] And while
[0:22] it might look that way sitting at JFK
[0:24] airport watching dozens of different
[0:26] European airlines roll by, the logos
[0:28] painted on the side are merely a facade.
[0:32] On the surface, it appears that 33
[0:34] different airlines fly 126 different
[0:36] routes between New York and Europe.
[0:38] These are not only the big players like
[0:40] BA, Air France and KLM flying to major
[0:42] destinations like London, Paris and
[0:44] Amsterdam, but also plenty of smaller
[0:46] airlines like Air Serbia, High Sky or
[0:48] Azorus Airlines serving smaller markets
[0:50] like Belgrade, Bucharest or Ponta
[0:52] Delgata. This appears like a healthy
[0:54] competitive landscape until you look
[0:56] closer. [music]
[0:58] If you wanted to fly, say, to Brussels,
[1:00] you'd have a choice between a 6:10 p.m.
[1:02] departure from JFK on Brussels Airlines
[1:04] or a 6:30 from Newark on United. But
[1:07] what you wouldn't have is a choice on
[1:08] how much to pay [music] because almost
[1:10] every single day the airlines are
[1:12] charging the same price. But there's a
[1:14] good reason for this. Brussels Airlines
[1:16] [music] and United are effectively
[1:18] acting as a single airline. It's the
[1:21] same thing for Munich. United operates a
[1:23] 515 from Newark, Lufansza A 530 from
[1:26] JFK, then another Newark frequency at
[1:28] 8:30. All priced identically. This is a
[1:32] cartel. Not a drug cartel, but a
[1:35] business cartel. Brussels Airlines,
[1:37] United, Lufansza, as well as Swiss and
[1:39] Austrian Airlines are all colluding.
[1:42] Together, they decide how often to fly,
[1:45] where to fly, and crucially, how much to
[1:48] charge individually. They don't care who
[1:50] flies what because they pull
[1:52] transatlantic revenue, then distribute
[1:54] it according to the terms of their joint
[1:55] venture agreement. It doesn't matter to
[1:57] United whether a passenger takes them or
[1:59] Lufansza to Frankfurt. They'll earn the
[2:01] same amount regardless. This all means
[2:03] that [music] from the perspective of
[2:05] competition economics, these five
[2:07] airlines are really acting as one. This
[2:10] is intriguing. If you refer to article
[2:13] 101 of the treaty on the functioning of
[2:14] the European Union, it reads, [music]
[2:16] quote, "The following shall be
[2:18] prohibited as incompatible with the
[2:19] internal market. All agreements that
[2:21] directly or indirectly fix purchase or
[2:23] selling prices." It's hardly a secret
[2:25] that these airlines are price fixing.
[2:27] They'll happily discuss it with their
[2:28] investors. This would leave any normal
[2:30] business in a world of legal trouble.
[2:32] But the United and Lufansza cartel has
[2:35] this. In this document, the European
[2:38] Commission outlines their decision to
[2:40] exempt these airlines from antitrust
[2:42] law. This is a legally approved cartel.
[2:46] European and American regulators have
[2:48] allowed these airlines to collude
[2:50] [music]
[2:50] against the consumer. And it's not the
[2:53] only such case. The next largest
[2:55] encompasses Delta, Virgin Atlantic, KLM,
[2:57] and Air France, representing about 26%
[2:59] of the transatlantic market from New
[3:01] York. Then the third major transatlantic
[3:03] joint venture includes American
[3:04] Airlines, Air Lingus, British Airways,
[3:06] Finire, Iberia, and Levelville,
[3:08] operating a further 18% of flights.
[3:10] Together, this sums to 75% of all
[3:14] Eurbound flights from New York. 75% of
[3:17] all flights in the most lucrative
[3:19] longhaul market in the world are
[3:21] operated by just three entities.
[3:24] Regardless, it is still true that New
[3:26] York has perhaps the most robust
[3:28] European competition of any US airport.
[3:31] But that means that elsewhere, the
[3:33] problem is even worse. In the smaller
[3:34] market of DC, for example, these three
[3:36] joint ventures encompass 85% of all
[3:39] transatlantic flights, severely stifling
[3:42] competition. And that stat will go up to
[3:44] 89% soon if SAS and ITA Airways are
[3:47] granted approval to join the Sky Team
[3:48] and Star Alliance joint ventures as they
[3:50] intend. Now, the majority of the legal
[3:53] proceedings allowing for such collusion
[3:54] have taken place just a subway ride away
[3:56] from Dallas airport at the US Department
[3:58] of Transportation. American law does
[4:01] allow the DOT to grant antitrust
[4:03] immunity to airlines, but there's one
[4:05] key stipulation. They must deem that the
[4:07] public benefits enabled by collusion
[4:10] outweigh the negative consequences of
[4:12] reduced competition. Therefore, airlines
[4:15] submit long winding arguments to the DOT
[4:17] explaining why, in their opinion, the
[4:20] public would benefit so greatly from
[4:22] their collusion. One of the most recent
[4:24] cases took place between 2012 and 2019
[4:26] as Virgin Atlantic sought inclusion into
[4:28] Delta's existing transatlantic joint
[4:30] venture. [music] To start, they pursued
[4:32] antitrust immunity on US UK routes.
[4:34] Their legal argument was all in support
[4:36] of this one line. Quote, "The joint
[4:39] venture will be a more effective
[4:41] competitor on USUK routes. They explain
[4:44] that the crux of the public benefit
[4:45] would be quote the creation of a
[4:47] meaningful competitive alternative to
[4:49] the alliance between American Airlines
[4:50] and British Airways that presently
[4:52] dominates the US UK market." The pair
[4:55] characterized their flight frequencies
[4:57] as a key cause of their ineffectiveness.
[4:59] What makes London in particular such a
[5:01] valuable destination to airlines is that
[5:03] it's a top origin and destination for
[5:05] business travelers. And business
[5:07] travelers are more likely to purchase
[5:08] costlier business class and lastminute
[5:11] tickets. But business travelers tend to
[5:13] also be very schedule dependent. They
[5:15] want to be away from home for as little
[5:17] time as possible. Meaning if their
[5:19] meeting ends at 2 p.m., they want to be
[5:20] on a 5 p.m. flight home from Heathrow.
[5:23] Large companies that require lots of
[5:24] business travel typically sign corporate
[5:26] contracts with airlines in exchange for
[5:27] reduced fairs and increased perks. But
[5:30] according to Delta, these buyers have
[5:32] quote repeatedly told Delta its service
[5:34] frequencies and time of day coverage on
[5:36] NYC to LHR are inadequate and have
[5:38] refused to commit business to Delta on
[5:40] the route. The trickiness was that Delta
[5:42] couldn't simply just add more London
[5:44] flights. Heathro is one of the most
[5:46] heavily slot restricted airports in the
[5:48] world. With just two runways, every
[5:50] landing slot is used, and demand so
[5:52] severely outstrip supply that these
[5:53] slots sell for tens of millions of
[5:56] dollars. The most valuable slots are the
[5:58] early morning arrival times used by
[6:00] overnight transatlantic flights, just
[6:01] the type Delta needed. And even if the
[6:03] cost was worth it to them, slots only go
[6:05] up for sale every so often.
[6:07] Alternatively, if Delta formed a joint
[6:09] venture with Virgin, they told the DOT,
[6:11] they could coordinate their schedules to
[6:13] improve time of day coverage. They'd
[6:15] keep the eastbound schedule the same. In
[6:17] that direction, times don't matter as
[6:19] much since they're almost all in the
[6:20] evening. But for westbound flights,
[6:22] they'd shift the schedule around to
[6:23] remove competing departure times and
[6:25] help improve coverage across the day so
[6:26] that the longest gap would be the 3
[6:28] hours between Virgin's 5 and [music]
[6:30] 8:00 p.m. flights. Ultimately, the DOT
[6:33] was compelled by Delta and Virgin's
[6:34] argument and approved their antitrust
[6:36] immunity waiver. But that approval acted
[6:38] as a tacit admission. If the public
[6:41] benefit for Delta and Virgin's joint
[6:43] venture was the creation of a strong
[6:45] competitor to American and British
[6:46] Airways' joint venture, that must mean
[6:49] that American and British Airways' joint
[6:51] venture created a public detriment. So
[6:54] then why did the DOT approve American
[6:56] and British Airways' joint venture in
[6:57] 2010? Well, the crux of their argument
[7:00] was that Delta already had their own
[7:02] immunized transatlantic joint ventures
[7:03] and that the formation of their own
[7:05] would make them a stronger competitor.
[7:07] So once again, why did the DOT approve
[7:10] Delta and Air France's joint venture in
[7:11] 2002? Of course, Delta argued that it
[7:14] would make them a stronger competitor to
[7:17] the already approved United Lufansza
[7:19] joint venture. And why did the DOT
[7:21] approve United and Lufansza's joint
[7:22] venture all the way back in 1996? Well,
[7:25] that's where things start to make at
[7:26] least slightly more sense. The original
[7:29] vision for transatlantic joint ventures
[7:31] was to expand the hub and spoke network
[7:33] model to both sides of the Atlantic.
[7:35] After deregulation in the 70s and 80s,
[7:37] airlines in the US and Europe rework
[7:39] their route networks to operate most
[7:40] flights to or from a limited number of
[7:43] hub airports. They'd coordinate their
[7:45] schedules to have a big bank of flights
[7:46] arrive around the same time, then
[7:48] another big bank leave shortly after, so
[7:50] passengers from big cities to small
[7:52] [music] towns could have a huge array of
[7:54] conveniently timed connections. This
[7:56] dramatically increased consumer choice
[7:58] for short-haul travel, but it had less
[8:00] of an impact for long haul. United, for
[8:02] example, flew to major European cities
[8:04] like London, Paris, Zurich, and Rome.
[8:06] But if you're going to a smaller
[8:07] destination that lacked United service,
[8:09] Bilbao or Leon or [music] Stoutgart, you
[8:12] were better off booking your flight with
[8:13] a European airline since they'd offer
[8:15] European side connections onto their
[8:17] short hall flights. But this still left
[8:19] some customers out. If someone was
[8:21] traveling from a smaller US city without
[8:23] service from a European airline to a
[8:25] European destination without service
[8:26] from an American airline, they'd have a
[8:28] harder time getting a [music] fast and
[8:30] cheap itinerary. The idea through
[8:32] cooperation was to allow passengers to
[8:34] connect through hubs on both sides,
[8:36] combining the networks of Luanza and
[8:38] United, and therefore creating a far
[8:41] larger, far more competitive and
[8:43] convenient network. [music] Today, this
[8:44] partnership has grown into a critical
[8:46] core of the two airlines's businesses.
[8:49] Each morning, eight United wide bodies
[8:51] bring well over a thousand passengers
[8:52] into Lufansza's Frankfurt hub, and the
[8:55] majority of them continue their journey
[8:56] by making their way through the
[8:57] airport's maze of terminals onto another
[9:00] Lufansza flight. Through cooperation,
[9:02] the German airline has coordinated their
[9:04] schedule to make sure they have
[9:05] well-timed capacity to the destinations
[9:07] popular with US origin passengers, but
[9:09] not otherwise serviced by United, like
[9:11] Stockholm, Vienna, or Istanbul. After
[9:14] all, it's in their interest. Since they
[9:16] pull transatlantic revenue, they want to
[9:18] be sure that their network offers a
[9:20] better, faster, cheaper itinerary than
[9:22] through Amsterdam, Paris, [music]
[9:23] London, or any other competitor's hub.
[9:26] This network integration has
[9:27] unquestionably been a net positive for
[9:29] consumers. It's expanded choice and even
[9:31] injected more competition into the mix
[9:33] as now United can compete to European
[9:35] destinations it doesn't directly serve
[9:37] as well. The benefits might even justify
[9:40] the DOT's approval of their antitrust
[9:41] immunity. They might represent the
[9:43] public benefit that outweighs the public
[9:45] harm if crucially the antitrust immunity
[9:49] was what made this [music] public
[9:51] benefit possible. But it's hard to find
[9:53] the evidence of that. United and Luansza
[9:56] did not start integrating their networks
[9:58] in 1996 upon approval of their antitrust
[10:01] immunity [music] waiver. They did so in
[10:03] 1993.
[10:05] Passengers from Tampa, Orlando,
[10:06] Philadelphia, New Orleans, and Phoenix
[10:08] could now connect through Dallas airport
[10:10] onto a flight to Frankfurt. then from
[10:12] Frankfurt to eight German cities in
[10:14] Vienna. And similar arrangements were
[10:15] set up for Chicago and San Francisco.
[10:18] They didn't pull revenue or coordinate
[10:19] pricing, but rather just paid each other
[10:21] for the seats on each other's flights
[10:23] sold as part of the other airlines
[10:24] itineraries, steering clear of antitrust
[10:27] violations. It was not until 3 years
[10:29] later that the two airlines applied for
[10:31] antitrust immunity with the argument
[10:32] that it was needed to do the very thing
[10:34] they had already started doing. Now,
[10:37] they made arguments on why they'd be
[10:38] better incentivized to continue to do
[10:40] what they were already doing. But
[10:42] regardless of the truth of that, their
[10:43] antitrust immunity application presents
[10:45] the network integration as the core of
[10:48] the public benefit, the element that is
[10:50] legally required to outweigh the harms
[10:52] of reduced competition. This public
[10:54] benefit, however, was clearly already in
[10:56] the airlines's interests [music]
[10:58] considering they were already
[10:59] implementing it. Further evidence of the
[11:01] feebleness of this so-called public
[11:03] benefit can be found in the present.
[11:05] American has a major partnership with
[11:07] Qatar Airways. American operates flights
[11:09] from Philadelphia to Doha, which is not
[11:11] a route that would normally turn a
[11:12] profit on its own merits, but it's
[11:14] scheduled to arrive at the Middle
[11:15] Eastern hub around 4:30 p.m. with just
[11:17] enough time for passengers to transfer
[11:19] onto Qatar's [music] 6 to 9:00 p.m.
[11:21] eastbound bank and plenty do thanks to
[11:23] the through ticketing offered by the
[11:24] carriers. In the inverse, Qatar's US
[11:27] network is formed around [music]
[11:28] Americans network with flights to most
[11:30] of their hubs, Los Angeles, Dallas,
[11:32] Chicago, New York, and Miami. This is a
[11:35] deep partnership. It's now the core of
[11:37] how American serves the growing Middle
[11:39] East and India markets. While it's the
[11:41] primary way that Qatar expands [music]
[11:42] its reach deeper into the US. What this
[11:45] is not, however, is an antitrust
[11:47] immunized joint venture. It's got all
[11:50] the public benefits that airlines
[11:51] purport come with antitrust immunity.
[11:53] Network integration, [music]
[11:54] schedule coordination, through ticketing
[11:56] while keeping Qatar and American as
[11:58] competitors. For a passenger going from
[12:00] say Boston to Delhi, [music] the two
[12:02] airlines offer two different itineraries
[12:04] at two different price points. American
[12:06] through New York, Qatar through Doha.
[12:08] With both able to offer one-stop
[12:10] itineraries that don't involve the
[12:11] others flights, they don't offer junk
[12:13] tickets on the route, [music] meaning
[12:14] they must offer better pricing or
[12:16] product to win the customer's business.
[12:18] This is far from the only example of a
[12:20] non-immunized partnership between
[12:22] airlines. United has a near identical
[12:24] arrangement with Emirates. They operate
[12:26] a New York to Dubai flight to feed
[12:27] onward connections while Emirates
[12:29] [music] operates to most United hubs to
[12:31] facilitate travel further into the US.
[12:33] Deltas [music] announced a similar
[12:34] arrangement with soon to launch Riad
[12:36] Air. The US airline will operate flights
[12:38] to the new airlines hub in Riad while
[12:40] Riad Air is expected to serve major
[12:42] Delta hubs. None of these partnerships
[12:44] are antitrust [music]
[12:45] immunized. All operate nearly
[12:47] identically to immunized partnerships.
[12:50] This wouldn't matter whether or not
[12:52] antitrust immunity is needed for these
[12:53] partnerships if antitrust immunity
[12:55] didn't have a downside. But the downside
[12:57] is not hard to find. Italy, for example,
[12:59] [music] is a massive destination for US
[13:01] travelers. From New York, there are
[13:03] plenty of non-stops to the major markets
[13:05] like Milan and Rome. Four genuine
[13:07] competitors fight for business on these
[13:08] routes, and pricing is therefore low. An
[13:11] average of $566 and $486, respectively,
[13:14] in the high demand month of August. Then
[13:17] there are the less competitive routes to
[13:19] smaller markets like Venice, Naples,
[13:20] Bari, and Polarmo, where two competitors
[13:23] duke it out head-to-head. But as you'd
[13:24] expect, less competition means pricing
[13:26] [music] power is stronger and airfares
[13:28] are higher. $579,
[13:31] $578, [music]
[13:32] $860, and $819.
[13:35] Between these four, the distinction in
[13:37] pricing can be even further explained by
[13:39] competitive dynamics. In Venice [music]
[13:41] and Naples, it's United versus Delta,
[13:43] true direct competitors. In Bari and
[13:46] Polarmo, it's [music] United versus
[13:48] Neos, a small Italian airline with just
[13:50] six longhaul aircraft operating once or
[13:52] twice [music] weekly service. With a
[13:54] limited name recognition in the US, it's
[13:56] hardly a strong competitor to United for
[13:58] US origin [music] traffic, potentially
[14:00] explaining the higher price point on
[14:01] these routes. Rather than engaging in a
[14:04] price war with Neos, United seems to
[14:06] allow them to eat just a little bit of
[14:08] their lunch, as Neos consistently
[14:09] charges a couple hundred less than
[14:11] United on these routes. The sole route
[14:14] without head-to-head competition to
[14:15] Italy, Deltas to Katana, does buck this
[14:18] trend [music] slightly since its average
[14:19] pricing is just $600, but this route
[14:22] does have indirect competition [music]
[14:23] from United Neos since Polarmo is also
[14:25] in Sicily, meaning it likely pulls from
[14:27] a similar pool of passengers. Looking
[14:30] further, the Spanish market demonstrates
[14:32] a similar trend. The most competitive
[14:34] destinations, Barcelona and Madrid,
[14:36] average the lowest, while the least
[14:37] competitive, like Santiago de
[14:39] Compostella, Bilbao, Malaga, and Pom
[14:41] America, are the highest. [music] Taken
[14:43] together, a graph of August airfares to
[14:45] every Italian and Spanish destination
[14:47] from New York [music] demonstrates a
[14:49] clear trend, the exact trend economic
[14:52] theory would predict. The more
[14:53] competition a route has, the lower
[14:55] [music] the airfares. What one could
[14:57] infer from this is that when airlines
[14:59] have fewer competitors, they have
[15:00] stronger pricing power, meaning they
[15:02] have greater ability to charge
[15:04] passengers more without losing their
[15:05] business. Therefore, one could infer
[15:08] that over the Atlantic, the diminishment
[15:09] of competitiveness due to antitrust
[15:11] immunity waiverss has given airlines
[15:13] more pricing power, [music] leading to
[15:15] higher airfares overall. There's also
[15:17] anecdotal evidence of this. For example,
[15:20] Dublin is only 400 m or 650 km further
[15:24] from Boston than San Diego. JetBlue
[15:26] flies to both destinations [music] using
[15:28] similarly configured A321 aircraft, but
[15:30] their pricing between the two routes is
[15:32] dramatically different. In August,
[15:34] they're charging an average of $186 for
[15:37] the transcontinental [music] route, but
[15:39] $476
[15:41] for the transatlantic one, 2 and a half
[15:43] times more. And even then, JetBlue is
[15:46] the lowest cost operator on this route,
[15:48] perhaps because it's not part of any of
[15:50] the major joint ventures. Delta is
[15:52] charging slightly more at $485 while
[15:55] Airingus' seats are selling for $536.
[15:59] Now, admittedly, this is imperfect
[16:00] evidence. There [music] are some
[16:02] legitimate additional costs for
[16:03] transatlantic operations, like ETOP
[16:05] certification, taxes, and fees. And
[16:06] airlines do use different pricing
[16:08] strategies between domestic and
[16:09] transatlantic that inflate the cost
[16:10] [music] of oneways to Europe. But
[16:12] marketwide, transatlantic fairs are some
[16:14] of the highest cost long haul routes in
[16:17] the world on a per mile basis. And
[16:20] airlines will even admit this, at least
[16:21] indirectly. Here's Lu Tanza in an
[16:24] investor presentation touting that
[16:25] Transatlantic is their quote core profit
[16:27] pool. And here's British Airways' parent
[16:29] company saying essentially the same
[16:30] thing in a transcript of an investor
[16:32] presentation. This all tracks with
[16:34] economic theory. When there's lower
[16:36] competition, firms have stronger pricing
[16:38] power, [music] enabling them to command
[16:40] higher profits. And the problem goes
[16:42] beyond the consolidation of these
[16:43] airlines into larger singular entities
[16:45] because these larger singular entities
[16:47] have been able to leverage their
[16:48] dominant market positions to drive
[16:50] genuine competition out of business.
[16:53] Back in the late 2010s, Norwegian
[16:55] Airlines made a play at long haul and
[16:57] grew into the largest foreign carrier
[16:58] serving the New York market and the
[17:00] fifth largest transatlantic airline
[17:02] outright behind [music] United, Delta,
[17:04] American BA. They were operating a
[17:06] lowcost model, severely undercutting
[17:08] their competitors' prices [music] and
[17:10] therefore severely threatening their
[17:11] supremacy. In particular, it was most
[17:13] threatening to British Airways since
[17:15] their main base was at London's [music]
[17:16] Gatwick Airport. And so BA's parent
[17:18] company, I AG did anything they could to
[17:21] drive the upstart carrier out of
[17:23] business. When Norwegian started Gatwick
[17:25] to New York flights, British Airways
[17:26] launched Gatwick to [music] New York
[17:27] flights, even though the only other long
[17:29] haul flights they operated from the
[17:30] airport were to warm weather leisure
[17:32] destinations. When Norwegian started
[17:34] Gatwick to Oakland, California flights,
[17:36] British Airways started Oakland flights,
[17:38] even though they already operated
[17:39] flights to San Francisco airport a
[17:41] [music] mere 10 m or 16 km away. When
[17:44] Norwegian started Gatwick to Fort
[17:46] Lauderdale flights, British Airways
[17:47] started Fort Lauderdale flights, even
[17:49] though they already operated to Miami 20
[17:52] m or 32 km away. When Norwegian started
[17:55] Barcelona to Oakland and LA flights,
[17:57] British Airways' parent company IIG
[17:59] started a [music] brand new lowcost
[18:01] airline called Level and also launched
[18:03] Barcelona to Oakland and LA flights. The
[18:06] tactic here was obvious. I was [music]
[18:08] trying to bleed Norwegian dry. They'd
[18:11] match Norwegian's route launches,
[18:13] saturate the market, price tickets
[18:15] aggressively low, take passengers away
[18:17] from Norwegian, and ultimately the
[18:19] tactic worked. Norwegian's longhaul
[18:21] operations started to falter in 2019.
[18:23] [music] They reshuffled their network to
[18:25] find routes that could work. But then
[18:26] after a full shutdown due to CO, the
[18:28] airline 787s were never reactivated and
[18:30] Norwegian never flew a longhaul flight
[18:32] again. Unsurprisingly, with the
[18:34] exception of Barcelona to Los Angeles,
[18:36] none of the routes [music] IG launched
[18:38] to match Norwegian service still operate
[18:40] today, further demonstrating their
[18:42] [music] true intent. Given their scale,
[18:44] it made plenty of sense for IEG to
[18:46] launch and lose money on these routes if
[18:48] it prevented Norwegian from getting a
[18:49] foothold in their key markets. While
[18:52] it's far from a given that Norwegian
[18:53] Longhaul would have survived even
[18:54] without this anti-competitive behavior,
[18:56] IG's actions demonstrated that they were
[18:59] genuinely threatened and they did not
[19:00] consider it a given that Norwegian
[19:02] Longhaul would die out on its own. It's
[19:05] really hard to understand American and
[19:06] European regulators' logic behind
[19:08] antitrust immunity over the Atlantic.
[19:10] The public-f facing logic is clearly
[19:13] faulty. But even if one attempts to read
[19:15] between the lines, there's little logic
[19:16] there either. It's possible that it was
[19:19] just a genuine mistake. That initial
[19:21] approvals in the '90s happened in the
[19:22] tumultuous time following deregulation
[19:24] when consequences were less understood
[19:26] and stability and air service was a
[19:27] higher priority. But that mistake has
[19:30] snowballed. In recent years, the
[19:32] dominant [music] logic behind approvals
[19:33] is that that's the way it's always been
[19:35] done. Regulators appear to be blindly
[19:37] approving more and more antitrust
[19:39] immunity waiverss so long as collusion
[19:41] mirrors the structure of existing
[19:43] collusion. They don't want to rock the
[19:45] boat, but by avoiding so, they're
[19:47] helping the [music] consumers lose out,
[19:49] the very people they're there to serve.
[19:51] They're helping airlines charge more,
[19:53] making it slightly less accessible for
[19:56] everyone to hop across the pond.
[19:59] Okay, so now I have a very real,
[20:01] slightly embarrassing story to tell as
[20:02] part of this ad re. [music] Basically,
[20:04] the sponsor for this video is Rocket
[20:05] Money, which I'd never actually used,
[20:07] but to try them out and figure out
[20:08] whether I should endorse them, I
[20:10] downloaded the app and linked my bank
[20:11] and credit card accounts. Admittedly,
[20:13] I'm not always very on top of my
[20:15] finances. I'm fortunate enough to have
[20:16] enough savings that I don't need to keep
[20:18] track of every expense, but I'd also
[20:20] sort of noticed recently that my account
[20:22] balance was getting lower than usual. I
[20:24] didn't think I was spending more or
[20:25] making less than normal, so I was a bit
[20:27] confused, but hadn't really looked into
[20:29] it. But when trying out Rocket Money, I
[20:30] poked around and went to their recurring
[20:32] payments tab, where they show you all
[20:33] the recurring payments you make. And
[20:35] that's where I noticed something weird.
[20:37] Basically, my two biggest recurring
[20:38] payments each month were to the account
[20:40] of the bank that I have my mortgage
[20:41] with. I only use that account for the
[20:43] mortgage, so I only send enough to make
[20:45] the mortgage payment [music] each month.
[20:47] But I only pay my mortgage once a month,
[20:49] and this auto transfer was happening
[20:50] twice a month. Basically, it turns out
[20:53] that about 6 months ago, I somehow
[20:54] accidentally duplicated the auto
[20:56] transfer and extra money had been
[20:58] accumulating in this other bank account.
[21:00] Ultimately, this worked out pretty well
[21:01] since I was sending the extra money to
[21:02] myself, but there were also plenty of
[21:04] other smaller subscriptions in there
[21:05] that I didn't realize it was still
[21:06] paying. So, I was able to cut back on
[21:08] about $100 of spending a month. As you'd
[21:10] imagine, since Rocket Money immediately
[21:12] proved itself, I'm now a legitimate
[21:14] user. And there's more than just the
[21:15] recurring payments feature that I find
[21:17] worthwhile. I love their automated
[21:18] spending reports as it makes it super
[21:20] simple for me to see where I'm spending
[21:21] too much money. Unsurprisingly, it's on
[21:23] travel. They also help you reach your
[21:25] goals as you can set a budget, then use
[21:27] the app to track your progress sticking
[21:28] to it through time. There are so many
[21:30] more features beyond that, but all in
[21:32] all, I've already found Rocket Money to
[21:34] be a really useful, really simple way to
[21:36] stay more on top of my finances with
[21:38] basically no work at all. So, take
[21:40] control of your finances today. Click
[21:42] the link in the description or scan the
[21:43] QR code on screen to get started for
[21:45] free.
