Updated Dec 8, 2023 - Business

How the "big five" airlines came to dominate the skies

Correction: This chart was fixed to show that Delta merged with Northwest Airlines (not Republic) in 2008. Data: Airlines for America; Graphic: Erin Davis and Rahul Mukherjee/Axios. Note: "Merged airlines" includes the current airline.
Correction: This chart was fixed to show that Delta merged with Northwest Airlines (not Republic) in 2008. Data: Airlines for America; Graphic: Erin Davis and Rahul Mukherjee/Axios. Note: "Merged airlines" includes the current airline.

Alaska Airlines' proposed merger with Hawaiian Airlines would mark the latest in a decades-long run of industry consolidation that's left travelers with just five major carriers to choose from, per an Axios analysis of Airlines for America data.

Driving the news: Today's five biggest airlines — Delta Air Lines, American Airlines, United Airlines, Alaska Airlines and Southwest Airlines — have gobbled up 42 others since 1960.

Why it matters: If Alaska's proposed Hawaiian merger is to become reality, the companies must first convince skeptical regulators that an even more concentrated industry should be allowed.

  • That's a tall order. The Justice Department is already suing to prevent a planned $3.8 billion merger between low-cost rivals JetBlue and Spirit Airlines, arguing that it would harm working- and middle-class travelers.
  • The JetBlue-Spirit trial wrapped up on Dec. 5; a decision is expected soon.
  • Earlier this year, DOJ won a separate case aiming to break up the "Northeast Alliance" partnership between American Airlines and JetBlue.

The big picture: The number of airline mergers annually spiked in the 1980s, with a peak of six in 1986.

  • Delta and American have acquired or merged with the most airlines since 1960, at 15 and 11 respectively. Alaska carries the historical DNA of another five.
  • Currently, four airlines — American, Delta, United and Southwest — together control over two-thirds of U.S. domestic air travel, according to the Bureau of Transportation Statistics (BTS).

Yes, but: Several new budget carriers, like Avelo Airlines and Breeze Airways, have popped up in recent years, adding fresh competition into the mix.

Between the lines: Those opposed to airline mergers often argue they result in reduced service and higher fares.

Yes, and: Americans have spent more on flying than ever before in recent years, in part because the total number of annual domestic airline passengers has increased by over 200 million — helping airlines to post record profits.

  • U.S. airlines raked in a combined $21.2 billion in net income from domestic flights alone in 2015, $13.3 billion in 2016 and $17 billion in 2017.
  • Of course, airlines posted huge losses during the Great Recession, while the COVID-19 pandemic cost U.S. carriers almost $31 billion, leading the federal government to prop up the industry with a massive $54 billion bailout.

Of note: Consolidation hasn't translated into more flights getting to their destinations on time.

  • The country's on-time performance for domestic flights has stagnated over the past two decades, with roughly 20% of domestic flights annually arriving late, according to BTS data.
  • Issues within airlines' control caused around 5% of delays. But air carriers weren't the leading cause for holdups, as problems with the National Aviation System — meaning, air traffic control — accounted for around 6%.
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