Is airline deregulation a disaster
 

In the early 1980's I was doing a lot of work with the airlines. The Regan administration was implementing airline deregulation as a strategy to foster competition and reduce prices.<BR><BR>At the time, the US air system was dominated by United, American, Eastern, Delta, TWA, and Pan AM as the international flag carrier.<BR><BR>I remember discussing the anticipated effects with an executive at American. He aid that when all was said and done, we would still have a system dominated by 4 or 5 major carriers, the only difference would be that the traveling public would have to worry about bolts falling out of the airplanes!<BR><BR>How prophetic, plus planes are cramped, dirty and service s!@#$ !<BR><BR>If this topic shouldn't be here, kill it, but I think it is an appropriate question for this forum. <BR><BR>Was airline deregulation a success or a failure?

It was a success in the sense that prices went down wherever there was real competition. <BR><BR>It was a failure in that airlines that had hubs in particular cities--United in Chicago, Delta in Cincinnati, etc., were allowed to ride roughshod over the local airport authorities and monopolize the available gates and slots. <BR><BR>The deregulation plan needed to have capacity limits on the airport facilities. Now, each airline has a chokehold on one or more of the major gateways.

I guess it depends on how you define success and failure.<BR><BR>In 1971, I flew roundtrip Boston to Vegas: $350. Thirty years later the price is the same (or less). <BR><BR>Yes, the service is worse and the comfort is less, but I've always looked at air travel as just a way to get from Point A to Point B.

Actually, airline deregulation started under Jimmy Carter's administration.

That's good. We can't blame it on those evil Republicans!

I don't think you can call it a success when UAL is now asking for a taxpayer financed $2 billion bail-out. Yeah, customers may benefit from lower fares, but UAL in trouble can't bode well for the industry or its customers. If the industry's major carriers can't make a profit, eventually we'll all pay a higher price.

There is a good article in Cosumer Reports(I think it was probably their June edition) about deregulation. It talks about the airlines,utilities,phone service, etc...several industries that were affected by deregulation. Based on data they had(also taking into account inflation) they said all of these industries prices were steadily going down prior to deregulation. The article did list some good benefits of deregulation but the biggest thing that stood out to me is the decline of service (especially with the airlines) after dereg. It also stated (considering inflation) something like 56% of airline fares were cheaper prior to 1978 than they are today. A chart showed these industries actually shot up in prices after dereg. Anyways it was an interesting article that some of you may want to check out.

Oooohhh, I'm melting!!

Is airline deregulation a disaster? <BR><BR>Yes. Resoundingly (and don't forget the strike-busting of PATCO and now we are on the verge of having NO air controllers once the current ones retire). So was deregulation of phone service and the failure to regulate everything given away to the telecom industries.<BR><BR>And then there's the SEC and the general lack of supervision of corporate accounting.<BR><BR>Yep, get the gummint off the backs of business and just SEE what happens to America.