Matt D
Topic Author
Posts: 8907
Joined: Fri Nov 19, 1999 6:00 am

(Re) Regulation?

Tue Jan 25, 2000 11:44 am

Should the US government reregulate the airline industry? Here are some pro and con points I've gathered on the subject:

Pros: Bankruptcies would all but become a thing of the past, thereby insuring long term career stability for those in the industry.
In light of Valujet 592, perhaps re regulation would force the airlines to bring back a higher element of safety.
Since Deregulation, it is pretty much unanimous to everyone that service has fallen by the wayside. With re regulation, and airlines all charging the same fares, air travel could be special again as that would be the only way airlines can distinguish themselves from the competition.
The airlines are a critical part of our infrastructure, and must not be left to be ran by a collection of temporary, if wreckless new starts. Let the well established and time honored carriers run the market.

Cons: Air fares, adjusted for inflation are overall at the lowest levels since Deregulation, allowing many folks that couldn't otherwise to travel.
The government sticks its nose in enough matters. Let the market decide, maintain the Laissez-Faire philosophy.
It would become all but impossible for any entreupeneur (sp?) to begin a new airline.
The air industry is just another business, like selling cars, and hamburgers. Any time one business goes under, another one will come along to replace it.

I eagerly await your feedback. I won't state my personal position until later.


Tue Jan 25, 2000 11:58 am

I Can't believe what I'm reading....
Next you'll tell me we should get rid of the internet because its too distracting.

Why do I need to pay $700 for a plane ticket just so air travel can be "special" again?! I need to get where I'm going and if I have to sit next to some incontinent fat grandmother to do it; so be it.

Capitalism works better when unrestrained and left to the mercy of market forces. For what its worth, deregulation has done wonders for this country. Now you can choose among 5000 Telephone Companies and pay $0.05 a minute for that call instead of $5.00 as it was back in 1972. Who benefits? We all do.

If nothing else, air travel is an adventure. I'm not rich, so I don't expect or for that matter deserve the lap of luxury. If you don't know what I'm talking about, go ask Herb Kelleher.

RE: (Re) Regulation?

Tue Jan 25, 2000 12:46 pm

How would re-regulation prevent airline bankrupcies?
I can't see how the allocation of routes and frequencies would help an airline with bad service, old aircraft and high costs not go out of business.

The only place regulation kept airlines flying instead of going bust was in Europe where the regulator owned the airlines.
Look at BA before privatisation.
Look at Air France, Alitalia, Olympic and Iberia. These airlines were propped up by their governments as they bled red ink left right and centre! Old aircraft, outdated procedures and terrible service is the general hallmark of an airline that is artificially supported.

This isn't good for the customer or the market who face unfair competition. Why should we care if an airline goes out of business, at the end of the day it's down to the airline it's self. They can claim unfair competition from the majors, high costs or market apathy. But at the end of the day, the people behind the venture should have known better. A new airline flying a 30-year old 727 between a few secondary airports at a low frequency does not deserve to be supported by regulation!

The successful startups have identified their market, and have not needed regulation to survive.
Southwest, National and Midway all appear to be doing well. I hope JetBlue do too!
Posts: 448
Joined: Thu Jul 29, 1999 8:12 am

RE: Howz That Again?

Tue Jan 25, 2000 10:37 pm

In light of Valujet 592, perhaps re regulation would force the airlines to bring back a higher element of safety.

Sorry, but I don't feel that to be an accurate statement. Valujet took advantage of a lax FAA and certain loopholes in the existing FARs which at that time allowed any airline to perform its maintenance just like Valujet did. The majors didn't use those methods because of past performance of the third party outfits, but there was nothing illegal in doing so. IMO Valujet got screwed over 592 to make up for what they had been doing elsewhere. The FAA was like a father hitting his kid. The kid asks "Why?" and the father says "For what I didn't catch you at before!"

Deregulation has not caused a reduction in the safety of operating or maintaining aircraft; rather it has helped (incrementally) in increasing safety. Deregulation caused a ballooning growth in the industry, which forced the FAA to re-vamp aging Control centers and forced the airlines to develop TECAS, GPWS, and predictive windshear.

The market forces deregulation brought to bear has also forced the (major) airlines to pay MORE attention to details of maintenance. If an airline was the only one serving a city, a crash or outlandish numbers of maintenace delays at that city could be shrugged off by the airline because it had a 'captive market'. Now with nearly every small-to mid-size city having service by a major and a low-cost, people have a choice, and the majors must pay attention to 'marginal revenue' markets to prevent erosion of profits.

I have no arguements with your other points, except to say that if it wasn't for deregulation, I probably wouldn't be working for Delta; the explosion in the industry's growth is why I am employed today. And for those of you who wish to work for a major, full reregulation to the 1960's laws would probably end those dreams.

Be careful what you wish for...........



RE: (Re) Regulation?

Wed Jan 26, 2000 2:31 am

I feel very strongly against the re-regulation of teh airline industry. I really don't think that the government should be controlling the airlines as they did before. Deregulation has made air service so much better... Airlines now have vast route networks that were unheard of before 1978, they offer lower fares and more frequent service. Passengers now have a real choice of carriers when they travel, and though the level of service may have declined, I think that, as a whole, deregulation has been a good thing.

Jet Setter - Re-regulation would prevent bankruptcy because, under a regulated industry, the government set fares for the airlines. When a carrier wanted to charge more or less, it petitioned the gov't to change the fare. Raising fares was easier done than lowering them, so airlines can simply get the government to raise fares above costs, making airlines profitable. Look at history, and you will see few if any bankruptcies in the US airline industry before 1978. In the 80's and 90's, however, with the Deregulation Act in full swing, airlines dropped like flies.

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