Out of Control Policy Blog

Bob Poole (Quoted by Steve Forbes) Has It Right: Airline Deregulation is not to Blame

In a book by Steve Forbes and Elizabeth Ames, How Capitalism Will Save Us, Why Free Markets and Free People Are the Best Answer, the question was asked:  Didn’t deregulation wreck the airline industry?  The resounding answer is NO! It actually greatly benefitted consumers. As the a short version in an article concludesAirline deregulation actually has made service cheaper and more abundant. Adjusted for inflation, fares today are 25 percent to 44.9 percent lower than they were before deregulation three decades ago. Carriers offer far more service to more cities. And studies show travel is safer, too.

In the course of describing the situation (accurately) the authors use an article in 'Regulation Magazine" by (Reason’s own) Bob Poole, Jr. and Viggo Butler where they explain:

  • … government management of our airports and air-traffic-control systems has produced an antiquated, inefficient infrastructure unequipped to handle the explosion of air travel resulting from deregulation.
    Government-run airports, for example, are unable to use market-based methods to reduce airport congestion--such as using peak pricing to direct some usage by carriers into off-hours. This would not only cut down on overcrowded terminals, it would generate much-needed fees to finance expansion and technological improvements both in air traffic control and in airport facilities
  • …the misery of today's air travel is largely caused by an air-traffic-control system that relies on outdated 1950s technology. Only recently did the FAA announce that it would phase in more sophisticated NextGen air-traffic-control systems that use the kind of GPS satellite navigation technology consumers have had for years in passenger cars. The new systems would enable airports to handle at least twice as much traffic.
  • NextGen technology has existed for years. But the system has been bogged down in political debate. Not having to account to consumers, bureaucrats, as always, take their time at taxpayer expense. NextGen isn't expected to be fully in use until about 2025, at a total cost of some $35 billion.
  • Other countries already have more efficient, up-to-date air-traffic-control systems than the United States because they have given the management of airports and air-traffic-control systems to nonprofit corporations under industry control--and out of the hands of politically interested government bureaucrats.

Hence the accurate concluding comment which Bob Poole has written about many times over:  "The real problem in the United States isn't our airline traffic jam. It's the bureaucratic bottleneck in Washington."

See other articles by Bob Poole, Jr. at http://reason.org/areas/topic/air-traffic-control

Shirley Ybarra is Senior Transportation Policy Analyst


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