Just 4 Airlines Control 80% Of The Industry – How A Small Airport In Montana Is Fighting Back Against Skyrocketing Prices

The U.S. airline industry is dominated by four major carriers: American Airlines, Delta, Southwest and United. Together, these airlines control 80% of the market. According to aviation experts, this concentration has led to higher ticket prices and fewer options for travelers. However, a small airport in Missoula, Montana, shows how competition and innovative practices can help lower fares and improve the flying experience.

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Airline Deregulation Shaped The Market

For decades, the U.S. airline industry operated under federal regulation, which controlled routes and fares. According to Bill McGee, Senior Fellow for Aviation & Travel at the American Economic Liberties Project, this ensured stable pricing based on actual costs. "Fares actually made sense then," McGee told More Perfect Union. "They were based on cost. What a concept. We haven’t seen that in 46 years." 

However, the 1978 Airline Deregulation Act shifted power to the airlines, resulting in a wave of mergers and acquisitions.

By 2024, only 12 passenger airlines remain, down from over 75 in the mid-1980s. McGee notes that this consolidation has reduced competition and driven up costs. "The big guys stopped competing with each other head-to-head on price around the turn of the century – around 2001, 2002," he explains. 

This lack of competition is especially evident in cities where the major carriers dominate gate access, effectively shutting out low-cost carriers that typically drive prices down.

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Why Gate Access Matters

In many U.S. airports, major airlines control gate access through branding and long-term leases. When those gates are not in use, they aren't available to smaller carriers. McGee stated that a 2023 analysis revealed that major airlines significantly reduced gate usage during the pandemic but prevented new entrants from using those gates.

McGee also pointed out that low-cost carriers, such as Spirit and Frontier, can reduce fares by an average of 21% when they enter a market, benefiting even travelers who never fly with them. But without gate access, their ability to compete is severely limited.

"It’s just impossible to overstate just how critical the role of the low-cost carriers are," McGee said. 

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Missoula's Innovative Approach

Missoula Montana Airport is bucking the trend by embracing a common-use model. In this system, there is no permanent signage for a single airline. Instead, they all share access to gates, ticket counters and baggage services. 

Deputy Director of Missoula Airport, Tim Damrow, told More Perfect Union that this flexibility allows room for new entrants and expansions. "We tried to leave space between all of our agencies here," Damrow said. "So if an airline needs to grow or expand, there's open ticket counters next to them … there’s always room for a new entrant as well."

This approach has attracted several low-cost carriers, including Frontier and Sun Country, spurring competition among larger airlines.

The result? Fares in Missoula have dropped significantly and community members have noticed the difference.

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Federal Support for Change

Missoula's expansion was partially funded by federal programs, including the American Rescue Plan and the Bipartisan Infrastructure Law, passed by the Biden-Harris administration. These initiatives prioritize projects that increase competition. 

Additionally, new legislation is being introduced to require more airports to use a similar common-use model, like the one in Missoula. McGee said the Airport Gate Competition Act calls for at least 25% of gates and facilities to be common use and limits the largest carriers from having more than 50% domination at any given airport.

"It may be one of the most significant things that can be done to crack this sort of stranglehold that the big guys have on airports and if we can get more access, that will help bring down fares and provide more choices for consumers," McGee stated. 

While Missoula's approach is a success story, broader reforms may be needed to address the airline industry’s systemic issues. Experts like McGee argue for revisiting regulation to promote competition and prioritize consumers over profits.

For now, Missoula is an example of how innovative policies and infrastructure can challenge the status quo, creating a better experience for travelers and a more competitive marketplace.

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