After a decade-long struggle, regulators have finally managed to put the airline industry under competition-inducing controls. Consumers can view the new reforms as a victory that should lead to lower air fares and costs of transporting goods by air. The antitrust law, which is supposed to serve as the watchdog of competition, historically passed over the airline industry, allowing El Al to sign deals with foreign airlines without regulatory supervision.
The authority does not know, for example, whether El Al paid rival airlines not to compete over passenger and air cargo traffic. Nothing as such has been proven to date, but in theory El Al could raise the prices of direct flights to international destinations after taking care to be the leading carrier on certain routes.
If indeed the airline industry becomes regulated, El Al's agreements will come under supervision for not engaging in anti-competitive behavior. Illegal, anti-competition agreements would be invalidated, which in turn would transform the face of the industry, adding flights while reducing prices on international routes.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now