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Event

Common ownership of US airlines

Large investment firms holding shares in several competing US airlines at once; a 2018 study measured it on US routes from 2001 to 2014.

8 links, 3 backed by primary records

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Dates
2001–2014
Place
United States
Also known as
Airline common ownership, Horizontal shareholding in US airlines

Connections 8

involved

  • BlackRock shareholder in competing airlines Primary record 12

    Shares held through funds for clients. Whether this common ownership raised fares is disputed.

  • The Vanguard Group shareholder in competing airlines Primary record 23

    Shares held through funds for clients. Whether this common ownership raised fares is disputed.

  • State Street Corporation shareholder in competing airlines Primary record 2

    Shares held through funds for clients. Whether this common ownership raised fares is disputed.

benefited

harmed

appears in

Timeline 1 date
  1. 2001–2014 Common ownership of US airlines
Proof 4 sources
  1. Anticompetitive Effects of Common Ownership (The Journal of Finance, vol. 73, no. 4, 2018), Wiley, for the American Finance Association, 25 May 2018. Scholarship & press Archived copy
    Notwithstanding the fact that airlines constituted only a small part of the merging parties' portfolios, both Barclays and BlackRock were among the largest owners of some airlines but not others.
    These results suggest both a large deadweight loss (i.e., decreased efficiency of the economy) and a large wealth transfer from consumers to producers due to common ownership.
    In the U.S. airline industry, taking common ownership into account implies increases in market concentration that are 10 times larger than what is “presumed likely to enhance market power” by antitrust authorities.
  2. Comment letter to the Federal Trade Commission on Hearing #8 (Common Ownership), Competition and Consumer Protection in the 21st Century, BlackRock, 15 Jan 2019. Primary record
    75-85% of shares during any given quarter of AST’s analysis are managed by traditional investment managers of diversified portfolios (such as BlackRock, Capital Group, Fidelity, State Street Global Investors, T.Rowe Price, and Vanguard)
  3. Horizontal Shareholding (Harvard Law Review, vol. 129, p. 1267, 2016), Harvard Law Review, 10 Mar 2016. Scholarship & press
    (listing the airline shareholdings of Capital Research, T. Rowe Price, BlackRock, Wellington, Janus Capital, Fidelity, and Vanguard)
    For example, from 2013 to 2015, seven shareholders who controlled 60.0% of United Airlines also controlled big chunks of United’s major rivals, including 27.5% of Delta Airlines, 27.3% of JetBlue Airlines, and 23.3% of Southwest Airlines
  4. Common Ownership Does Not Have Anticompetitive Effects in the Airline Industry (The Journal of Finance, vol. 77, no. 5, 2022), Wiley, for the American Finance Association, 1 Sep 2022. Scholarship & press
    Prior research has shown that these institutional “common owners” induce anticompetitive pricing behavior in the airline industry.
Page history 2 changes
  1. Sprint 12: State Street, disputing a finding, holders by filing dateAlibek5075dda
  2. connect-the-dot: sourced knowledge graph engine, site and contentAlibeka7fa236

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