Washington Post writer David Ignatius writes at RealClearPolitics.com today that
We speak of the airline industry as a market failure, but in a deeper sense, it’s a political failure. The next time you’re sweltering in an airport, ask yourself why government doesn’t start helping to fix this mess.
Whoa! my friend. As President Reagan once said, “Government is the problem.”
We all can agree that airline travel is a lot less pleasurable than it was in years past. Airports and airplanes are crowded. But isn’t that the testament of success? More people are flying. That much is good.
Like our highways, the federal government has not done much to expand the system. How many new major airports have been built in the last 35 years? I can think of only two: Dallas-Fort Worth and Denver. How many more passengers are flying in those 35 years? Think, “what if we had put all those billions in Amtrak subsidies into the airport system ….”
Responding to populist fears of reducing competiton, the government has also denied airline mergers the past 20 years which resulted in some of those airlines declaring bankruptcy. Operating under bankruptcy protection, those carriers offered cheaper tickets which the “healthy” carriers had to match thus dragging down the industry even more. Maybe, if the mergers had been allowed to go through, the industry would be healthier today.
The government problem is not just federal. It’s mostly local; mostly local port authorities. Local politics is especially sensitive to NIMBYism. Just look at the politics of Paine Field in Snohomish County or the politics in South Pierce County about the future of McChord AFB. Washington State, like many parts of the country, needs more paved runway, but the people and the its government lack the resolve and competence to solve the problem.
Instead, what local governments all around the country have done the last the last 20 years is put lipstick on the pig. Government has turned our airport terminals into expensive shopping malls and pseudo art museums. Who do you think pays for that? Do you think adding a dollar to the cost of your airport Starbucks does that? Hell no. It’s added to your ticket price along with the cost of the post 9/11 airport security. Who do you think pays for the federally-mandated TSA? It’s added to your ticket price. Hope you feel safer.
Most consumers have no idea what the cost of government is in their airline travel. It probably ranks just under fuel costs and ahead of labor costs.
Airlines know that consumers have sensitivity to ticket prices. Go above a certain price-point and more consumers will postpone the trip to go see grandma. So, as the airlines have absorbed added government costs, and then get shocked by soaring jet fuel costs, the airlines started cutting the luxury aspects of flying. You want a snack or a beer? It’s going to cost. And so on.
How many of you are willing to pay more for better service?
I suspect in time the systems and services will work itself out. Would I pay $20 more so that the airline will give me a meal on a 3 hour flight? Probably not, because I hate most of the food I get on an airplane. I’d rather spend $20 at an airport restaurant. But I want better than a Pizza Hut meal. So I suspect airport restaurants will get better in time.
There’s an old saying I learned from the lectures of Professor Woodrow Borah at UC Berkeley at the height of People’s Park:
When there’s a dollar to be made, somebody somewhere will make it.
The market will respond in time and airline travel will get better. Just keep government out of the market decisions!
Despite our bitching and moaning, we must all consider the most important matrix for analyzing our aviation system: American carriers are the safest in the world. Right now we might have to put up with older airplanes, crowded cabins and fewer amenities, but we are safe. The airline industry is filled with competent and professional employees. I have faith in them. Just get government and its huge costs (taxes) off their backs.