Who killed America's airlines?
The government warns that "very brittle" airlines are on the verge of a breakdown. How did we get here?
On the same day U.S. airlines canceled almost five percent of their flights, Transportation Secretary Pete Buttigieg appeared on CNN to declare that America's airlines were "very brittle" and possibly on the verge of a breakdown.
Too late, Secretary Pete.
The wheels started coming off the airline industry years ago. But the world finally started to notice this summer. Last Friday, you would have had to be an airline fanboy not to notice the industry's malaise. Airlines canceled 1,613 flights and delayed one in three departures by an average of just over an hour.
No question about it, we're in trouble. But how did we get here? And what can you do about it?
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The decline of the airline industry explained
Stop me if you already know this: In the late 70s, Congress deregulated the airline industry. But it turns out the government was even worse at managing an unregulated airline industry than it was at managing a regulated one.
The government adopted an irresponsible hands-off approach to commercial aviation. Airlines were free to publish schedules they couldn't, create customer-unfriendly ticket rules no one wanted, charge fees that would make a payday lender blush, shrink their economy class seats beyond recognition, and bend the truth about the actual cost of their fares to the point of lying. After all, weren't they deregulated?
The government also rubber-stamped every airline merger, permitting a once-competitive industry to shrink into just four oversized airlines.
In troubled times, the powerful and persuasive airline lobby demanded bailouts from the government and got them. After 9/11 and the pandemic, airlines received billions in cash transfusions. In flush times, the airlines used their influential lobbyists to insist that the government stay out of their deregulated industry and stop trying to impose common-sense rules to prevent them from charging outrageous fees or further reducing the size of their seats.
In other words, the government provided a safety net to the airline industry but almost no guardrails. And it's been doing so for 40 years. No wonder the industry is on the brink.
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The government had a chance to prevent this
Every new administration has an opportunity to push the reset button. They can look back at the disaster of airline deregulation and try to undo some of the past mistakes. At the very least, they can stop any new airline mergers that would further reduce competition.
So when the current administration came on the scene, consumer advocates were hopeful that Secretary Pete would do something to rein in the airline industry.
There were plenty of opportunities. He could have tapped the brakes on giving the airlines more bailout money or at least imposed sensible new conditions. The Department of Transportation could have moved forward with rulemakings that would have strengthened consumer rights.
But it did nothing meaningful until this summer when it started talking — talking! —about the problem. No wonder advocates have begun calling it the do-nothing DOT. It's done nothing except talk. How is the secretary appearing on CNN going to help? What good is having a dialogue with the airlines?
When Buttigieg called the airline industry brittle, it was a self-indictment. The industry went into a death spiral on his watch. He continued the failed government policies that allowed the airline industry to self-regulate. And now, he may reap what four decades of flawed federal policy have sown: a breakdown of the air travel system.
Today, four airlines control more than 80 percent of domestic passenger traffic. They give you failing, substandard service at record-high prices. In many respects, the system isn't about to break. It's already broken.
So how do we repair this? I may not know what the entire solution looks like. But I have a pretty good idea of what needs to happen before this gets fixed.
And let's be clear: A fix is a competitive domestic airline industry that treats its customers fairly. No one expects to turn the clock back to 1978 when airlines competed in service and the Civil Aeronautics Board set airfares. But is it too much to ask airlines to keep to their published schedules? Is it unrealistic to expect the price you're quoted for a ticket to be the price you pay? At the very least, can we assume we'll fit into the airline seat that we book?
Here's what a solution would look like:
A freeze on airline mergers
Mergers reduce competition. The proposed JetBlue-Spirit combination will remove a competitor from the market, allowing the combined airline to raise prices. The Department of Justice knows this. Will it look the other way and let the latest airline merger sail through? Probably. And that will take us even closer to a breakdown. We have to stop the mergers now.
The powers that be in Washington need to end their policy of placating the airline industry. They have to stop the handouts that spoiled the airline industry and allowed it to take its own customers for granted. We need to elect leaders who turn down the airline lobby's generous campaign donations and work for the people who elected them.
A better way to get there
It's hard to imagine a future without commercial air travel. But the latest innovations in high-speed rail, like Hyperloop, look promising for short- to medium-range trips. Affordable new air taxis could replace the inefficient puddle jumpers. Commercial air travel isn't the only way to get places. The demise of America's air travel may be a wake-up call to get on board with these new mass transit options.
For what it's worth …
All the doom-and-gloom talk coming from aviation insiders may be premature.
We had an interesting discussion about the heated rhetoric in the Friday Forum. No, the domestic airline industry probably won't grind to a halt this summer. But a reckoning will happen soon. Maybe not this month, but if we don't do something now, the upcoming holiday travel season could be far worse. Travel insurance, anyone?
What's on your mind?
How do you feel about the government's oversight of the airline industry? What kind of solutions do you think would work? The comments are open.
About the art
Artist Dustin Elliott envisioned Secretary Pete playing the fiddle as DFW burns. "For this work, I added to the old story of the burning of Rome with the addition of an Illinois all-American federal travel hero," he says. "Step aside, Nero."
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