Would More Government Intervention Make Flying Better or Worse?

February 12, 2024 by Dan Mitchell @ International Liberty

There are plenty of problems, but this image reminds me that there are not necessarily government solutions.

 

Indeed, it is quite likely that government created the problems in the first place and that additional government intervention will simply make bad situations even worse.

For instance, I’m a frequent flyer, mostly for work but sometimes for more important reasons. So I’m very interested in three things:

1. Cheap flights
2. Convenient flights
3. Comfortable flights

But I’m very skeptical about the ability of government to deliver those goals. Let’s see what two columnists for the Washington Post recently wrote on this topic.

We’ll start with some excerpts from an article by Bina Venkataraman.

…flying is broken. …Little about the experience of modern flying is acceptable. …That’s where Ganesh Sitaraman, a professor at Vanderbilt University Law School…comes in. I cornered him on a recent evening while he was visiting D.C. to ask whether he really thinks there’s a way to end our misery — one that doesn’t just involve paying higher prices. His answer: …Ask more of the country’s airlines.

The U.S. airline industry, Sitaraman points out, …is not being required by policymakers to deliver adequate service to the American public. …airlines should be forced to have consistent fares based on distances traveled, not based on when you book your ticket…

Sitaraman also advocates disallowing any one airline from dominating a hub such as Dallas, Chicago or Atlanta… airlines should be required to return to the practice of honoring passengers’ tickets from other carriers’ flights when a cancellation or missed connection occurs… I largely agree…that air travel should be treated more as a public utility. …the FAA or Congress could set a minimum size for legroom in economy-class travel.

The big takeaway is that she thinks the market produces bad results and that politicians and bureaucrats would do a better job.

For a different perspective, here are some excerpts from Megan McArdle’s column about airlines.

Every argument about airline customer policy is essentially the same one: “I should be entitled to cheaper and more pleasant flights, and airlines should charge someone else more or make their flight less pleasant to give me what I deserve.”

…Politicians are an exception, however. When they weigh in, the argument they’re making is “vote for me.” …Parents understandably…want a guarantee that their kids can sit with them. Unfortunately, the only way to offer such a guarantee would be to toss people without children out of seats they chose in advance, perhaps even paid for… Some might say…passengers shouldn’t have to pay to choose their seats.

Fair enough — as long as you understand that the people who pay more for specific seats subsidize the folks who don’t. Stop the practice and the cost of the cheapest tickets will rise. …folks who instinctively feel that the ability to choose your seat or check a bag ought to be included with the price.

But if airlines bundled all those things into one standard fare, that fare would be considerably higher than the budget fares the complainers are currently buying. …There is no way to make everyone, or even most people, better off. There is only the Hobbesian scramble for the inherently scarce resources that can be crammed into an aluminum tube flying 35,000 feet above the ground.

Megan also points out that airlines are one of the nation’s least-profitable industries, so it’s absurd to accuse them of successfully pillaging customers.

As explained above, they are simply trying to please consumers, who seem to value low prices over everything else.

 

The good news is that they are getting low prices thanks to airline deregulation enacted during the Carter Administration.

The bad news is that prices will go back up if Ms. Venkataraman and her allies succeed in pushing through more government control.

The bottom line is that there’s no such thing as a free lunch. There are only tradeoffs. That’s true when looking at the airline market, just like it’s true when looking at everything from the labor market to the nicotine market.

P.S. Ordinary consumers value low prices over conveniences. The main reason is that ordinary consumers are paying out of their own pockets. The people who complain the loudest about airlines are usually the people (such as politicians and journalists) who fly with other people (such as taxpayers and employers) paying for the tickets. For what it’s worth, I’m actually similar to politicians and journalists in that my flight costs rarely come out of my own pocket. But I nonetheless oppose government intervention because I’m not as dumb as Bernie Sanders.