Wendover's Transatlantic Airline Cartel Story Runs Ahead of Its Evidence
Wendover Productions has identified a genuine competition problem: major airlines have obtained government permission to coordinate fares, schedules and revenue through international joint ventures. On routes where they once competed, they can effectively operate as one airline.
But the video makes a much bigger accusation than its evidence can sustain. It presents a handful of airfare comparisons, an aggregate flight-count statistic and a simplified history of regulatory approvals as proof that these arrangements are driving up transatlantic fares.
I don't need to defend the airlines to challenge that conclusion. The actual economic research is considerably more complicated, the regulatory record is more substantial, and one of the video's most memorable examples does not survive examination.
1. The 75% market-share argument has a measurement problem
The video opens with a striking statistic: three airline joint ventures operate approximately 75% of New York's Europe-bound flights, rising to 85% in Washington.
That sounds like overwhelming market dominance. But the video describes a share of flights, not a share of passengers, available seats or ticket revenue. It also combines numerous different destinations into one enormous market.
A passenger travelling from New York to Brussels cannot simply substitute a flight to Rome because the same airline group operates it. Competition in aviation is principally assessed through individual origin-and-destination markets, not by counting every flight between two continents as though they were interchangeable.
The distinction matters. A large share of departures across an entire region does not establish the competitive position of an airline on every individual route.
A 2011 paper by economists in the US Department of Justice's Economic Analysis Group independently reported that three immunized airline groups carried more than 82% of US–EU passenger traffic. That supports the broader concentration concern, but it is a different measure, covering a different geographical market and period.
Department of Justice
The video should have distinguished these measurements rather than presenting its flight count as a definitive measure of market power.
2. The airfare comparisons do not establish causation
The video's strongest numerical argument compares New York flights to Italy and Spain.
It reports:
- Milan: $566, with four competitors.
- Rome: $486, with four competitors.
- Venice: $579, with two competitors.
- Naples: $578, with two competitors.
- Bari: $860, with two competitors.
- Palermo: $819, with two competitors.
It then argues that fewer competitors allow airlines to charge higher prices.
The underlying economic principle is reasonable. The problem is that these comparisons do not establish that antitrust immunity caused the price differences.
Different destinations have different demand, operating costs, passenger volumes, seasonal patterns, airport constraints and competitive alternatives. Counting airlines alone cannot account for these differences.
The video actually acknowledges one important complication: Neos, which competes with United on Bari and Palermo, has only six long-haul aircraft and operates some services once or twice weekly. That is not equivalent to having Delta as a direct competitor.
The Boston–Dublin comparison is weaker still. JetBlue reportedly charged an average of $476 for Dublin against $186 for San Diego, despite using similarly configured A321 aircraft.
The narrator acknowledges differences in taxes, fees, ETOPS requirements and international pricing practices. Those qualifications matter. Similar aircraft and approximate distance do not make two markets economically equivalent.
More importantly, the narration does not provide the underlying airfare methodology. It does not establish the booking window, travel dates, cabin, sample size or precise source of the August averages.
Without those details, readers cannot reproduce the comparisons or determine how much of the difference comes from airline coordination rather than other market conditions.
A fare chart can illustrate a problem. It cannot substitute for a causal study.
3. The academic evidence is more complicated than the video suggests
The most serious weakness is that the video reaches a broad conclusion without engaging with the competing empirical research.
There is evidence supporting its central concern.
A 2011 study by William Gillespie and Oliver Richard examined transatlantic fares between 2005 and 2010. It found that average nonstop fares were approximately $31 higher when a route had one independent competitor rather than two, with further increases as competitors disappeared. The estimated difference was approximately 7% for each reduction in independent nonstop competitors.
The researchers also found that airline alliances could lower connecting fares, but concluded that antitrust immunity was not necessary to achieve those particular pricing efficiencies.
This is important evidence for the video's argument. However, the authors explicitly stated that their findings represented their own views, not the official position of the Department of Justice.
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Other research complicates the picture.
A 2017 study found substantially different results. Robert Calzaretta, Yair Eilat and Mark Israel examined international airline cooperation between 1998 and 2015. They found that metal-neutral joint ventures reduced connecting fares by approximately 8%, while finding no general increase in nonstop fares on overlapping routes.
There is an important financial disclosure: the study was partially funded by American Airlines. That does not invalidate its findings, but it is a material consideration when evaluating research favorable to airline joint ventures.
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A 2019 study found both benefits and harms. Jan Brueckner and Ethan Singer examined fares between 1997 and 2016, using US government data supplemented by confidential fare information from foreign airline partners.
Their findings were particularly revealing:
- Connecting passengers generally received lower fares through alliances.
- Passengers travelling directly between overlapping airline hubs faced higher fares following certain immunity arrangements.
- A simulation involving two representative routes found that the connecting-passenger savings outweighed the additional costs to nonstop passengers.
The authors therefore concluded that the alliances were beneficial overall in their model, despite identifiable competitive harm on overlapping routes.
That conclusion is not definitive: the overall calculation was a simulation, not a comprehensive measurement of every market, and the authors acknowledged that extending the analysis to more routes could test its generality. Nevertheless, it directly challenges the video's suggestion that higher nonstop fares establish higher costs for passengers overall.
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A 2021 study found another form of consumer harm. Guofu Tan and Yinqi Zhang examined the Oneworld transatlantic joint venture using US government fare data from 2008–2013. They estimated that the arrangement increased fares on certain online services in behind-to-gateway markets by approximately 3–4%.
This matters because the competitive effects are not confined to the direct nonstop routes emphasized in the video.
Guofu Tan, Yinqi Zhang, 2022
A 2025 analysis provides an even more useful distinction. The Korea Institute for Industrial Economics and Trade examined transatlantic connecting itineraries and separated joint-venture marketing from joint-venture operations.
It estimated that:
- Each additional jointly marketed segment was associated with an 8.4–10.6% fare reduction.
- Each additional jointly operated segment was associated with a 4.5–8.1% fare increase.
- In a typical case involving both arrangements on one segment, the estimated net connecting-fare reduction was 3–4%.
The study does not settle the question of overall consumer welfare. Its importance is that it demonstrates why treating every joint venture as one uniform pricing intervention produces misleading conclusions.
KIET Industrial Economic Review
The evidence supports a more precise argument: airline cooperation can raise fares in some markets while reducing them in others. The effects depend on the route, the degree of integration and the competitive alternatives.
Wendover presents a much simpler verdict.
4. The regulatory history is not quite the rubber stamp portrayed
The video suggests that American regulators repeatedly approved airline joint ventures because competing alliances already existed.
There is some truth to that. But the actual legal standard is more demanding than the video's explanation suggests.
Under 49 U.S.C. §§41308–41309, the Department of Transportation must consider whether an agreement substantially reduces competition. Where it does, approval requires a serious transportation need or important public benefits that cannot be achieved through reasonably available, materially less anticompetitive alternatives. Antitrust immunity is also limited to what is necessary for the specifically approved transaction.
U.S. Code+1
Consider the 2010 American–British Airways–Iberia decision.
The DOT did argue that creating a third major international network would strengthen competition against Star Alliance and SkyTeam. But that was not the entire decision.
The department also:
- Examined individual city-pair markets and overlapping services.
- Considered objections from Virgin Atlantic and independent aviation critic Hubert Horan.
- Recognized potential concentration on US–London routes.
- Required four pairs of Heathrow slots to be transferred to competitors, supporting four additional daily round-trip services.
- Required reporting and continuing oversight.
The department also considered the expansion of services following the US–EU Open Skies agreement, including new Heathrow services from major American airlines.
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One can reasonably question whether those conditions were sufficient or whether the projected benefits materialized. But presenting the decision as simply another rubber stamp leaves out the actual regulatory analysis.
The video makes another questionable inference when it calls Delta and Virgin Atlantic's approval a tacit admission that American and British Airways' earlier alliance had harmed consumers.
That conclusion does not follow.
A third network might improve competitive balance against two existing networks without proving that either original network caused an overall consumer detriment. Relative competition and absolute consumer welfare are different questions.
The European legal distinction
The video also describes the European Commission as exempting airlines from antitrust law.
That is an oversimplification.
The United States has a specific statutory mechanism for granting antitrust immunity. The European Commission's 2010 BA/AA/Iberia proceeding instead resulted in a commitment decision under Article 9 of Regulation 1/2003. The airlines' commitments became legally binding following preliminary competition concerns.
The earlier Lufthansa–SAS–United proceedings were also closed following commitments.
These decisions allowed cooperation to proceed under specified conditions, but they were not equivalent to a blanket American-style exemption from Article 101.
EUR-Lex+2
The distinction matters because the video treats different regulatory systems as though they operate through one identical approval mechanism.
5. The Qatar and Emirates examples do not prove that full joint ventures need no immunity
The video presents American–Qatar and United–Emirates as evidence that airlines can achieve the benefits of joint ventures without antitrust immunity.
These partnerships do demonstrate something important: airlines can coordinate connecting schedules, codeshare and sell through-tickets while remaining independent competitors.
But they do not automatically demonstrate that the same level of integration can be achieved without immunity.
A metal-neutral joint venture goes further. Partners share revenue so that they are financially indifferent about which airline actually carries the passenger. They can integrate fare-setting and revenue management in ways that ordinary codeshare arrangements cannot necessarily reproduce.
The 2017 research discussed above found that metal-neutral joint ventures produced larger connecting-fare reductions than ordinary alliance or codeshare relationships.
The distinction is precisely why the statutory requirement to consider less anticompetitive alternatives matters.
The right question is not whether some cooperation can occur without immunity. It is whether the same substantial passenger benefits can be delivered through a materially less restrictive arrangement.
The video's examples raise that question. They do not answer it.
6. Norwegian's collapse is not proof that IAG engineered its destruction
The Norwegian Airlines story is among the video's most memorable sections.
Norwegian introduced inexpensive long-haul services from Gatwick. British Airways subsequently launched competing routes, while IAG introduced LEVEL to compete in the low-cost long-haul market.
The video interprets this as a deliberate strategy to bleed Norwegian dry.
There is evidence of aggressive competition, but the conclusion about motive and causation goes further than the available facts.
OAG's 2019 analysis provides a particularly useful counterexample.
British Airways launched Gatwick–Oakland after Norwegian established the route. But BA withdrew its service in October 2018, while Norwegian continued operating. OAG explained that BA already served San Francisco from Heathrow, making Oakland a relatively low-risk experiment with an existing alternative nearby.
That is not evidence of a successful campaign to eliminate Norwegian. On that particular route, British Airways withdrew first.
OAG
IAG's own chief executive, Willie Walsh, also described LEVEL as an attempt to participate in what he believed was a profitable low-cost long-haul market. He acknowledged Norwegian's financial difficulties and said IAG believed it could operate the model more efficiently.
That does not establish that IAG never pursued aggressive competitive tactics. It does undermine the claim that LEVEL existed primarily to destroy Norwegian.
IATA
Norwegian's own financial disclosures make the video's causal narrative even less convincing.
Its 2019 annual report documented serious Rolls-Royce engine problems affecting its Boeing 787 fleet and the grounding of its Boeing 737 MAX aircraft. Although it recorded a net loss of NOK 1.609 billion, its underlying operating result before ownership costs doubled to approximately NOK 6.5 billion.
The pandemic then forced the airline to cancel most flights and furlough approximately 95% of its workforce in March 2020.
In May 2021, following financial restructuring, Norwegian announced that it had discontinued long-haul operations, reduced its fleet from 156 aircraft to 51 and reduced debt by approximately NOK 63–65 billion.
Norwegian+1
Norwegian was facing serious commercial and operational problems. COVID-19 was devastating. IAG was an aggressive competitor.
Those facts do not establish that IAG caused Norwegian's collapse.
The video acknowledges that Norwegian might have failed anyway, but its dramatic presentation gives the predatory explanation more certainty than the evidence warrants.
7. The real regulatory problem is public accountability
There is a stronger criticism of the airline system that the video could have developed.
The Department of Transportation says it requires immunized joint ventures to submit annual reports covering commercial integration, revenue management, network planning and customer service. It also collects origin-and-destination survey data containing itinerary and fare information.
US Department of Transportation
But how much of that information can the public actually examine?
In March 2019, the Government Accountability Office published a report titled International Air Alliances: Greater Transparency Needed on DOT's Efforts to Monitor the Effects of Antitrust Immunity.
It found that the DOT monitored airline alliances but did not externally report enough information about the actual effects of immunity. The public could not independently determine whether promised consumer benefits had materialized or whether regulatory remedies had worked.
The DOT subsequently published a monitoring overview and an independent economic study, and GAO marked its recommendation implemented. That was progress, but the underlying annual alliance reports and much of the detailed fare data remain proprietary.
U.S. GAO+1
This is where the criticism should become more demanding.
If airlines are allowed to coordinate prices and capacity because they promise better connections, more flights and lower fares, regulators should demonstrate that those benefits actually occur.
The public should be able to examine:
- Changes in fares on overlapping nonstop routes.
- Changes in connecting fares.
- Capacity and frequency changes.
- New competitor entry and the effectiveness of slot remedies.
- Whether promised benefits persist after the alliance becomes established.
Without meaningful public outcome reporting, the government effectively asks passengers to trust the same commercial arrangements it has authorized.
That is a far more consequential accountability problem than simply observing that several airlines charge similar prices.
Closing verdict
Wendover identifies a genuine threat to competition. When independent airlines combine pricing, scheduling and revenue management, passengers can lose a meaningful choice between previously competing carriers.
There is empirical evidence of higher fares on some overlapping routes. The concentration of transatlantic airline partnerships deserves serious scrutiny.
But the video repeatedly confuses evidence of market concentration with evidence of market-wide consumer harm. Its airfare comparisons do not isolate the effect of immunity. Its flight-count statistics do not establish route-level market power. Its regulatory history omits important conditions and legal distinctions. Its Norwegian example turns competitive behavior into a causal story that the available evidence does not establish.
I would not dismiss the airline alliances as harmless. I would demand something much more specific: proof that the benefits regulators authorized actually exceed the competitive damage on the routes where passengers have lost independent alternatives.
Wendover has identified a legitimate problem. It has not proved the full indictment it sells. The airlines deserve scrutiny, but the evidence deserves at least as much.
References
1. The Cartels Running Up Transatlantic Airfares — Wendover Productions. Original video and the claims examined in this article.
2. Antitrust Immunity and International Airline Alliances — US Department of Justice, Economic Analysis Group, February 2011. Provides the empirical relationship between independent nonstop competitors and transatlantic fares, while distinguishing connecting-passenger benefits.
3. Competitive Effects of International Airline Cooperation — Robert Calzaretta, Yair Eilat and Mark Israel, Journal of Competition Law & Economics, September 2017. Examines connecting and nonstop fares; explicitly discloses partial funding from American Airlines.
4. Pricing by International Airline Alliances: A Retrospective Study — Jan Brueckner and Ethan Singer, Economics of Transportation, 2019. Examines fare effects across 1997–2016 and models the competing effects on connecting and gateway-to-gateway passengers.
5. Competitive Effects of Joint Ventures in the International Airline Industry — Guofu Tan and Yinqi Zhang, Transportation Research Record, 2022. Finds estimated fare increases of 3–4% in certain behind-to-gateway markets following the Oneworld joint venture.
6. Disentangling the Price Effects of Joint Ventures in the International Airline Industry — Lee and Hong, Korea Institute for Industrial Economics and Trade, October 31, 2025. Separates joint marketing from joint operations to demonstrate their opposing fare effects.
7. Order 2010-7-8 — US Department of Transportation, July 20, 2010. The original American–British Airways–Iberia approval, including competition objections, regulatory reasoning and Heathrow slot remedies.
8. 49 U.S.C. §41308 — Exemption from the Antitrust Laws and §41309 — Cooperative Agreements and Requests — United States Code. Establish the legal scope and conditions of international airline antitrust immunity.
9. Commission Decision: British Airways/American Airlines/Iberia — European Commission, July 14, 2010; published October 15, 2010. Documents the binding commitments and competition concerns under the EU's separate legal process.
10. The Norwegian Effect — OAG, February 21, 2019. Documents the Gatwick route competition and British Airways' withdrawal from Oakland while Norwegian continued.
11. Norwegian Air Shuttle Annual Report 2019 — Norwegian Air Shuttle. Documents the airline's financial results, aircraft problems, restructuring and operational challenges.
12. IAG CEO Willie Walsh Interview — CAPA/IATA, June 3, 2018. Provides the CEO's explanation of LEVEL's commercial strategy and IAG's assessment of Norwegian.
13. Norwegian: Emergence from Financial Restructuring — Norwegian, May 26, 2021. Confirms the termination of long-haul operations, fleet reduction and debt restructuring.
14. Alliance Monitoring Overview — US Department of Transportation. Describes annual reporting, fare data collection and ongoing monitoring requirements.
15. International Air Alliances: Greater Transparency Needed on DOT's Efforts to Monitor the Effects of Antitrust Immunity — US Government Accountability Office, March 20, 2019. Documents the gap between confidential regulatory monitoring and public accountability.