The case for leaving the airline industry alone

Wired magazine Autopia blog makes the case for re-regulating airlines. Bob Crandall, the former CEO of American Airlines proposes this according to the Autopioa blog :

"Giving the government a role in pricing and prohibit new airlines from offering below cost fares that makes flying unprofitable for everyone."

So he wants less innovation by start ups which was hugely successful in Europe. Granted low cost airlines such as Ryanair or Easyjet do not make travelling a stylish or even pleasurable experience but they get you from A to B quickly, cheaply and in many cases more directly. Moreover they force established airlines to offer either better service or lower prices. I cannot see what is bad about this.

Not only consumers but also employees would lose out by this proposals:

"Amending the Railway Labor Act so that unions and management both "adopt more moderate positions"." Translation: Make strikes by unions illegal and force them into binding arbitration." (from the Autopia blog)

Furthermore the government would second guess the wishes of consumers by:"Pressuring airlines to use the larger jets, which means you won't be flying those annoying 50-seat regional jets between Cleveland and Cincinnati anymore, but you'll only have two flights a day to choose from, instead of eight." (from the Autopia blog again)

"Collectively, airlines have lost over $13 billion since deregulation, and that's even after you throw all the profitable years into the mix. (quoted from the Autopia blog)" I do not care at all how much money the airline industry loses. If it is such a bad businesses ,why are companies not deserting it for more lucrative ventures? Some companies such as Lufthansa are do not look at all as they would struggle for survival. Certainly, air transport is not a public service especially regarding the huge environmental costs associated with it.

Most of the current losses are related to the high oil prices, as far as I can judge. Well, market conditions seems to favour energy efficiency in this case. This will potentially spur research into enhancing fuel efficiency. Hardly a bad thing given global warming.

The Aviation industry is hardly de-regulated when their are still restrictions on who can service domestic routes in the US and the foreign ownership of airlines. Re-regulation might be good for vested interests such as incumbents, but is almost certainly bad for my desire to choose between excellent service or cheap tickets.