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Airline Reform Takes Off
The Travel Critic · September 28, 2000

It's time to rein in the airline business before it really takes us for a ride.

Deregulation didn't work. Whether you're a free-market capitalist, a middle-of-the-road moderate or a Big Government socialist, you've gotta admit that we're no better off now than we were two decades ago, when the Carter administration loosened the federal government's grip on the airline industry.

"After seeing the mess the airlines have made of a once-great way to travel, I vote for regulation," says Ben Strong, a Pensacola, Florida, retiree who had a front-row seat to deregulation as a business traveler for IBM. "I believe it is the only way we will be able to restore coach seating from the cattle cars that exist now to what was once reasonably comfortable - with decent meals and decent cabin service."

Dismantling the Civil Aeronautics Board was supposed to usher in an era of "more flights, more convenient schedules and substantially lower fares" for consumers, as former Eastern Air Lines executive Jack Robinson observed after his airline's demise. But has that happened?

The major airlines, including US Airways and United, have announced plans to merge into monopolistic megacarriers (result: fewer choices) and in many cases, reduce service (result: less-convenient schedules). They've also indiscriminately raised prices and socked us with ridiculous fuel surcharges (so much for the low fares).

And it's getting worse. According to Rolfe Shellenberger, airline ticket prices will surge 6.8 percent in 2001. "This is the biggest increase we've forecast in 20 years," says the Runzheimer International senior analyst.

These anticipated hikes, when adjusted for inflation, will raise fares beyond those charged in the days before deregulation, he says.

Add to that the broken promises made last June when airlines launched a program to prevent re-regulation. They called it "Customers First," but passengers sometimes felt like they were the last thing on airlines' agenda.

For example, airlines vowed to be more truthful about delays and more upfront about the availability of low fares. But complaints about carriers just skyrocketed instead, suggesting that carriers fell short of their pledge.

Someone has to do something, but what?

Adam Thierer, a fellow in economic policy at the Washington-based Heritage Foundation and one of the strongest voices against re-regulating airlines, believes the solution is to dismantle the "good-ol'-boy network" at airports that lets big airlines hog gates and landing slots.

But, in a shift from his earlier denouncement of any government intervention, the economist suggests that more controls may be needed.

"I'll be honest with you; I don't like to fly any more than the next guy," he says. "I think this problem requires more than a simplistic proposal. At some point, one of these mergers will be the straw that breaks the airlines' back, and the government will disallow them."

Richard Gritta, a professor of finance at the University of Portland's Pamplin School of Business in Portland, Oregon, thinks a more activist government is needed, too. An expert in airline economics, he blames the federal government for being too lax on enforcing antitrust laws.

"It isn't so much that deregulation failed as that the government failed to curtail some of the airline abuses," says Gritta, an adviser to Sen. Ron Wyden, a Democrat from Oregon. "If existing laws are enforced, I think that would solve the problem."

Even self-described "Republican consumer advocate" Terry Trippler, who cringes every time I mention the word "re-regulation," is coming around. Although he cautions about returning to pre-regulation days when there were no fare sales, frequent-flier programs or excursion fares, Trippler now admits that "a little structure" is in order.

"Maybe if the Department of Transportation would get off its duff and enforce the powers they already have things would be better," he says.

Maybe. We've thought we were close to solving this complex problem several times, but it's never really worked out the way most travelers hoped it would. Now we're getting cynical - not to mention mad.

Ronald Bude, a professor of radiology at the University of Michigan Medical Center who says he's "basically a libertarian," chafes at the notion the feds will get involved in the airline industry. However, he's upset enough to consider revising his political philosophy.

"This is an important issue," he acknowledges. "I think the government should step in when a monopoly threatens."

The sentiment carries over to the travel industry itself.

"The truth is, the airlines have been running wild, trampling not only over travel agents, but on the traveling public as well," says Douglas Hachnow, a Boca Raton, Florida, travel agent. "Re-regulation needn't take away the right of airlines to sell their own product, but it would break the grip that airlines have, and which recent events suggest is not in the interest of the traveling public."

How true. Here's the kicker, though: The people you've just heard aren't the ones who always thought deregulation was a bad idea. On the contrary, some of the folks in this story who support some kind of government intervention are politically conservative - some very much so.

Is the flying public condemned to fewer choices, higher fares and other airborne indignities? Perhaps not. Consider:

Last year, domestic carriers transported 582.3 million passengers, according to the Air Transport Association, a trade group representing the major airlines. Suppose just a fraction of those travelers became incensed enough to write their federal representatives about the state of the airline business?

You can bet the lawmakers would make changes faster than you can say re-regulation. Or airline "reform."

Do-it-yourself Airline Reform

Lobby hard. It's an election year, so federal representatives are paying extra close attention to voter concerns. Write to your legislator in the House or Senate and express your concerns. Demand that something be done.

Get local. Airports are often controlled on the local level, either by a city or county oversight board. Write to these representatives or attend a meeting and let your voice be heard.

Shape other opinions. Find like-minded people - travel agents, business travelers, frequent vacationers - who've had enough. Persuade them to write their representatives. This can also be accomplished with a letter to the editor of your local newspaper or Web site.

Vote with your feet. Whenever possible, patronize an airline that has acted responsibly and followed the spirit of deregulation instead of the monopolistic carriers that just want to get bigger.

Christopher Elliott is a travel commentator and author of A Bridge to Nowhere: A Year in the Florida Keys. All e-mailed questions may be edited, condensed or republished at the site's discretion.