Is momentum building to re-regulate U.S. airlines?
Mention the words “regulate” and “airline” in the same sentence just a few months ago, and you would have been dismissed as either naive, or a socialist - or both.
Not any longer. Now that the government is busy regulating banks and possibly subsidizing auto manufacturers, the idea of re-regulating the American airline industry is being taken seriously.
I wrote a what-if post on the topic a few weeks ago in which I argued deregulation didn’t work. Instead, I suggested the Airline Deregulation Act created an oligopolistic, customer-hostile industry that is damaging the American traveler and economy.
I was startled at the number of positive responses from readers. And from fellow industry observers.
The normally pro-business Portfolio Magazine spun a similar argument for regulation in its October issue. “Thirty years after deregulation, flying has become a miserable experience, and airlines - with the exception of Southwest - are losing money by the planeload,” it said.
Our friend Patrick Smith of Salon’s Ask the Pilot fame also suggested regulation might not be a bad idea in a recent column. “Regulatory oversight is often ponderously slow, and our airport security apparatus is horrendously wasteful,” he said.
I followed up with an MSNBC column suggesting eight aspects of air travel the government should consider regulating. Readers loved it.
Paula Ryan, a veteran travel agent, embraced re-regulation with the following words:
I have been a travel agent for over 21 years, and have owned my own agency for 16 years. The agents in our office - all veterans with 20+ years in the industry - have been saying this for years. Thanks for putting it in print.
Added another reader:
Hell yeah, the airlines should be re-regulated. The limited availability of required resources (such as gates at airports) and hub domination by some airlines virtually eliminates the possibility of a level playing field.
Another reader nominated me to be the next transportation secretary.
So where does that leave us? As passengers, it’s obvious that the framework for some common-sense regulation of the airline industry is now in place. It is up to us - more specifically, to our elected representatives - to push through legislation that will make our airlines competitive and customer-friendly.
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Comments
4 Responses to “Is momentum building to re-regulate U.S. airlines?”
Please share your thoughts...
Regulation, yes. Their product has degraded to the point beyond reason. We need rules not necessarily for the length of ground holds, but rather the conditions on the plane during the hold. There must be accurate and timely information relayed to passengers, and the elimination of one-sided contract terms. (You show up to your flight five minutes late due to traffic and you forfeit your ticket without compensation; they delay the flight for five hours because they over-booked takeoff slots, and you don’t even get a free Coke.)
Price regulation, no. If the airlines insist on losing money hand over fist, well, that is a very generous subsidy from the airline’s investors and creditors to me, and they can keep on doing it if they like.
SirWired
Regulation for safety is one thing but bringing back the good old days of regulation is a bad idea. You probably don’t remember what the airfare was back then but as a percentage of income it was high. The great masses didn’t fly very often because they couldn’t afford to.
The problem we face today is in part because we only deregulated a portion of the industry and we have not enforce anti-trust actions. For thirty plus years we have allowed the airlines to swallow up smaller carriers or to force them out of business by monopolizing gates and landing slots or by using predatory pricing or by conspiring not to compete in certain markets. Regulation would have prevented some of this however it would not have permitted the rise of Southwest, Morris Air, Air Tran, Jet Blue and a host of other low cost carriers. It would not have encouraged innovation because regulation stifles innovation.
We have allowed the airlines to buy off Congress when it comes to passenger rights and mergers and code-sharing (another name for price fixing). If the DoJ actively enforced anti-trust laws against price fixing, stop the airlines from colluding to control the market place, then you would see the low cost carriers maintain their place in the market.
Additionally, we, the American public have to accept responsibility for our part in this. We consistently tell the airlines that we want more luxury but we are unwilling to pay for it. We show no loyalty to anything but the price of the ticket and thus the airlines continue to cut costs and services so they can deliver the lowest priced ticket.
Regulating the airlines, or the phone companies is bad for the consumer, pure and simple.
Regulation? Yes, all for it, even in its former format.
Deregulation has led to compeltition, yes, but now flying is like shopping at Wal*Mart: Pile ‘em high and sell ‘em cheap … and I’m tired of being piled high. (And, though I do occasionally shop at Wal*Mart , I am more inclined to shop at Target or Macy*s and pay the price for quality and service.)
So what if the price reflects the cost? It should. Otherwise, government money to support and subsidise airlines is actually my money anyway, isn’t it. Let ME decide where to spend my dollars — or even TO spend my dollars on flights that cost more.
And one more item: when did flying become a “right” that everyone is entitled to at a price only they are willing to pay? If you choose to move to another state away from family or to send your kid to a university miles and miles away, then factor in the actual cost of flying/travel and don’t expect it for cheap.
On November 25th, 2008 at 11:55 am john m said
Additionally, we, the American public have to accept responsibility for our part in this. We consistently tell the airlines that we want more luxury but we are unwilling to pay for it. We show no loyalty to anything but the price of the ticket and thus the airlines continue to cut costs and services so they can deliver the lowest priced ticket.
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John!! Best post I’ve read in a LONG TIME on this site!