NCPA - National Center for Policy Analysis

Undoing Airline Deregulation?

April 30, 2004

Until 1978, when Congress scaled back regulation of the airline industry, a federal board had the final say over where airlines could fly, when they could fly and how much they could charge. Though the government continues to regulate airline safety, security and air traffic, deregulation unleashed fierce competition that led to sharply lower fares.

  • The average, inflation-adjusted price of an airline ticket has fallen in half since 1978 -- from 23 cents per mile to just 12 cents a mile in 2002.
  • Additionally, travelers benefit from more service to more places.

The benefit to consumers may disappear, warns USA Today, if the government creeps back into the airline business. Recent steps support its fears:

  • Twice this year the Transportation Department has intervened to alter flight schedules in order to relieve congestion, rather than allowing airlines to resolve the problem themselves.
  • Rather than allowing airports to charge higher fees at peak times to reduce congestion, Congress decided last December to add 20 more landing slots at Reagan National Airport.
  • While dozens of airlines failed under deregulation, Congress provided taxpayer-backed loan guarantees to six airlines and is weighing a $1.6 billion bailout of United Airlines.

Source: Editorial, "Halth Government's Creep Back into Airline Business," USA Today, April 30, 2004.

For USA Today


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