The article is long on rhetoric - language designed to have a persuasive or impressive effect on its audience, but often regarded as lacking in sincerity or meaningful content: all we have from the opposition is empty rhetoric - and short on verifiable facts. There are too many assumptions, fallacies, etc. in the article to go into all of them.
Under the regulated scheme favored by many, including presumably the authors of the article, incompetent airlines were allowed to survive at the expense of consumers, who were forced to pay higher than market fares for air travel, as well as depend on support from the taxpayers to cover operations that could not be sustained in a free market economy. This applies equally well to railroads, trucking companies, telecommunication companies, utilities, etc.
Deregulation weeded out the incompetents. More importantly, however, it opened the market to new carriers, i.e. Southwest Airlines, Jet Blue, etc. that have made air travel possible for millions of folks who otherwise could not afford it.
Numerous studies have shown that when the cost of air travel is adjusted for inflation, it costs less to fly today than it did in 1979, which was the last full year before deregulation.
Airlines have had a difficult time making money. That's part of the idea behind competitive markets. If you cannot offer a product or service and make money on it, you go out of business. And someone else has a go at it. Propping up inefficient businesses, read Amtrak, means that the taxpayers (non-users) have to pay for a money losing operation.
The authors have cherry picked scenarios. For example, they decry the fact that U.S. Airways pulled its Pittsburgh hub, thereby reducing significantly the number of its flights into and out of Steel City. They seem to have overlooked the fact that Southwest Airlines has filled a significant number of the U.S. Airways slots. For April 25th Southwest has six flights from Pittsburgh to BWI, with connecting service to New York. American, Jet Blue, United, Delta, etc. have 12 non-stops and 10 one-stops for the same date. The average fare for the non-stops is $71.80, whilst the average fare for the one-stops is $82.60. Of course, the cost of walk-up and last minute fares will be much higher.
My brother lives in Pittsburgh. I visit him two or three times a year. I have no trouble getting there from Austin on Southwest or American. And he has no trouble traveling from there to a variety of locations, which he does frequently. It is true that approximately 40% of the relatively new Pittsburgh airport is shuttered or under utilized. The reason is because the airport was over built for a city that has been losing population for decades. But the city fathers and mothers did not want to recognize it, so they built an airport for a city that was!
What about Cincinnati? Getting from there to major centers does not appear to be a problem. As examples, there are 12 non-stops and 5 one stops to New York. To Los Angeles there are two non-stops and 32 one stops, with the lowest fare being $89.10. Of course, as is true for many locations, service to smaller communities has been reduced or eliminated, although in many instances it is no more than a couple of hours by car to a major city airport. The service that remains to smaller communities can be pricy. But this has always been the case. Passenger rail service to smaller communities, even in its hay day, was never as good for smaller communities as metropolitan areas.
The only place where passenger rail makes sense is in relatively short, high density corridors where the cost of expanding the airways and highways is prohibitive. In most instances bus service is the best option for smaller communities that need commercial ground passenger transport. The last thing this nation needs, given its tremendous debt burden, is to be locked into a transport system that the users will not pay for and, therefore, must be carried by the taxpayers.
That article reads like a Wendell Cox piece, just slanted the other way. Fact cherry picking is the order of the day...
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
From the consumers side of things, huge success. Just look at the growth of passenger miles before and after as well as the fares! That's a slam dunk. Are there potential anti trust issues from too much consolidation? Probably. A need to regulate some behaviors? Probably. But theses are needs that grew from dereg, not dereg itself.
Like everything else, it's a mixed bag.
The initial result was the entry into the system of many small startups. Most failed or were absorbed by the major carriers who couldn't compete so they bought them out or squashed them with predatory pricing. However, over time, several of the major carriers failed, or reorganized under bankruptcy protection.
Now the small carriers mostly function as subcontractors for the major carriers. Like everyone else, all of them are being pressured by the oil company greed.
If you look at what has changed it is the loss of air service at many small city airports. Small communities do not have enough traffic to support air service. All but the largest cities have only commuter level service to a major hub. To fly from one small or medium size city to another you must often go far out of your way through a major city hub. When hubs and plane changes are involved, the speed advantage of air travel is lost.
That is the market that could best be served by rail. Very few people will take a train from NYC to Chicago, but there are many smaller communities along the route between NYC and Chicago. Those people have a need to move around among those communities. Time has proven that air service to small communities is not fiscally feasible.
Dave
Lackawanna Route of the Phoebe Snow
Deregulation, like anything else, has to be measured by expected or hoped for results. If one thought that deregulaiton of airlines would mean a free wheeling anything goes growth, then, no, it is a failure. If one thought that it would mean a weeding out of weaker operations, merging of others, etc., then, yes, it was successful. If one thought it meant major airline service to every airport, cheaper fares for everyone on every route, and freedom from all government rules and regulations, then, no it hasn't worked out that way. If one expected one or two major airlines being fed by much smaller short lines, ..er...airlines, stupid, not trains...much smaller commuter lines, then, yes it is a success. Hmm...deregulated airlines vs. deregulated rail lines vs. deregulated telephone companies vs deregulated banks. Ah! Its all in the perspective from which you started.
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I'd like to see any data regarding airfares, including fees, being higher (inflation adjusted) than they were 30 years ago. I suspect the writer included it as an assertion without any underlying data at all and that the reality is just the opposite. Perhaps if one analyzes "fees" as a standalone item that is true, but not the total charge for the flight.
Washington Monthly is a magazine for and about the federal government. I suspect that on almost any subject they would support increased regulation. More regulation = more federal jobs = more readers.
The author of this Washington Monthly article claims deregulating the airlines 30 years ago has been a failure since there's fewer major airlines, airline fees have gotten higher and higher, and there's fewer viable major hubs, with some cities like Memphis getting reduced airline traffic. Of course IMO, the higher airline rates and fees are partly due to increase fuel costs in the last several years.
And smaller regional airlines are having problems too. Just a couple days ago here in the midwest the regional airline Direct-Air canceled all their flights from now and into May, and people who pre-paid are justifiably ticked off.
This is a good reason why the nation must invest more in regional passenger rail travel.
http://www.washingtonmonthly.com/magazine/march_april_2012/features/terminal_sickness035756.php?page=1
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