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Will forced schedule reductions lead to higher air fares?

October 4, 2007

It’s something every traveler — or at least every leisure traveler — worries about. Will the air fare to my next destination be affordable? And the all-powerful airline lobby and the industry’s apologists know it, too. That’s why they’re raising the specter of higher fares, now that the government is threatening to force them to reduce flight schedules at airports where traffic is grinding to a halt.

But will de-facto government regulation lead to higher ticket prices?

The issue is again front-and-center after yesterday’s humiliating airline numbers reported by the DOT. Complaints were up nearly 90 percent from a year ago, and key numbers like delays, cancellations and on-time arrivals were in the toilet.

The Associated Press write-up on the DOT report card wastes no time getting right to the airline industry’s talking point. In paragraph two, it declares:

Aviation officials are considering forcing carriers to shrink their flight schedules or to pay more to fly during peak travel periods, though the traveling public could end up with higher fares as a result.

Now, I’m not saying the AP writer has a political agenda here. I was a wire service reporter in a previous life; I didn’t have time to think when I was on deadline. I just wrote. But the airline’s lobbyists probably couldn’t be happier with the story.

Truth is, there’s no evidence that fares will go up. At least no convincing evidence that I’ve seen.

Think about it. We’ve had wars, terrorist attacks, soaring fuel prices and recessions — and what have ticket prices done? When adjusted for inflation, they’ve remained more or less flat since deregulation. And in some instances, they’ve actually gone down. (Here are a few recent numbers from BTS.)

The federal government can, and should, force the airline industry to use the system responsibly. It just makes sense. Would you divert traffic from a four-lane highway down an alleyway? Would you send supertankers up a creek?

I think we will all benefit when the traffic cops show up and do their jobs. Look for an immediate reduction in delays and cancellations, and certainly, fewer complaints.

And how about air fares? I wouldn’t be surprised if they headed in the other direction.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

5 comments

  • Ron

    Here’s a thought…..with schedules forced to shrink, maybe the airlines will go back to using real planes instead of puddle jumpers for longer flights. With fewer flights, it doesn’t mean fewer passengers. They will have to make the best use of their flight slots and that will mean putting a bigger plane back on some routes.

    While I understand the need for smaller planes to smaller markets, the use of these samll Express Jets has gotten out of hand. With low ceilings, small seats, little room for carry-ons and no first class to be upgraded to, I avoid them if at all possible.

  • Jasper

    The problem with the airline mess is that none of the parties is willing to take responsibility for their part of the mess.

    The FAA needs to hurry with their new air-control system, just like the rest over the government builds more roads when there’s a traffic jam. The airlines need to stop cutting corners and actually deliver on the products they sell. How angry would we be is Coke bottles occasionally would be empty, or contain Pepsi? The fact that airlines have started blaming weather more and more is outrageous. Bad weather is a given. Not a surprise. Deal with it. Where do those folks live? In lala land?

    On the argument of the price increase, I am stunned that all those free market lobbyists suddenly have forgotten that if a product (start and landing slots) are scarce, the price is SUPPOSED to go up. Quite frankly, I’d encourage to government to put a price tag on those slots and make some easy money. We live in a capitalist country after all. I am surprised that especially republicans suddenly turn into ‘give it away for free’ socialists when it comes to putting a price on a scarce good. Perhaps that same government can drop some of the ridiculous taxes that all airline customers are paying then.

  • Joe F.

    Where is the incentive for the airlines to get bigger planes if they can keep higher profits by operating smaller ones? Bigger planes means more lost luggage, higher pilot and crew expenses, and higher maintenance costs – not to mention higher finance and lease costs.

    No, I expect higher prices = the cost of admission to fly is too higher to get new entrants that easily.

  • John

    Where are all of these magical ‘big planes’ going to come from? It will takes years for the orders from Boeing and Airbus to catch up with the demand. In the meantime, there will be fewer flights, and higher prices. If Elliot is right and the prices aren’t raised in the short-term, at least one of the major carriers will go broke, reducing competition, and leading to higher flights in the long-term. Knee-jerk legislation isn’t the answer. Fixing the bloody ATC system is. The separation scheme that planes must adhere to is a joke.

  • Will H

    Larger planes will likely not result in more luggage loss, as suggested by a prev. post. On larger planes, the batching of luggage to carousel of a large # of bags will have no greater prob. of going haywire than a small batch. Also, with bigger planes there is more in-cabin stowage, and we may hope that opportunity for loss will be reduced for5 the non-checked bags. Finally, current reported figures (I don’t have citation, just repeating abstract of data from a usually reliable source) show abt double loss rates per 100,000 flyers on flights involving RJ’s. Whether this is due to the smaller regional carriers or their parent/partner/accomplice larger carriers is an ongoing squabble (my own belief is that there are no clean hands here), but, empirically, the loss rate doesn’t look good for RJ flights.

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