Airline Regulation? No Thanks

My parents were in their 40s before they could afford to take a commercial airline flight. I was 20 the first time I flew. My daughter was three months old.

This is not because my family got richer. It’s because air travel got a lot more affordable. And that’s because of airline deregulation.

And that’s why I don’t want it back, no matter what Congress says.

The main argument for restoring some degree of airline regulation is that deregulation caused airline service to deteriorate. Everyone seems to agree on that. It was, for instance, part of the central argument put forward in favor of renewed regulation in an op-ed piece in the New York Times by former American Airlines CEO Robert Crandall.

But wait. In 1999, more than 20 years after deregulation began, the General Accounting Office didn’t seem to think airline service had deteriorated. In a report to Congress, it said:

… Since 1990, we have reported that, overall, fares have declined and service has improved since deregulation but that deregulation’s benefits have not been evenly distributed throughout U.S. air service markets.

Service improved after deregulation? Let’s concede that it at least increased, with more flights and more competition. Subjectively, I think most passengers would not agree that in-flight service improved after deregulation. When the government set the fares and approved the routes, service was about the only thing airlines could compete over. So service was good.

But I’m not sure that the correlation between poor service and deregulation is as strong as some people suggest. It’s a subjective call, but in my experience service declined much more precipitously after 1999 – and particularly after 9/11.

I suppose this may have been largely because of the forces unleashed much earlier by deregulation. But the timing suggests additional factors. And if it could not have happened without deregulation, it also could not have happened if passengers had not willingly traded comfort for low prices.

It’s all hard to quantify. But it’s not really a relevant argument for the majority of Americans who couldn’t afford to fly before deregulation. Airline service didn’t deteriorate at all for people who didn’t get any.

And a lot of people didn’t get any. In 1971, half of Americans had never flown on a commercial flight. By 2003, that had dropped to 18 percent.

According to the Bureau of Transportation Statistics, the number of “revenue passenger emplanements” — the number of times people who paid to board commercial aircraft — was about 149.5 million in 1977, the year before deregulation began. In 2007, it was 769 million.

Yes. The number of times a person boarded a plane in the United States quintupled. Not because the population grew. The U.S. population increased only about 20 percent during that time. An increase in income? Per capita income, adjusted for inflation, rose 53 percent.

Five times more passengers are boarding planes at least in part because deregulation allowed market forces to truly open up commercial air travel to the middle class. For that alone, I’m willing to stick with it.



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