We’ve all been shocked and horrified by that video of a passenger being dragged off a United Airlines flight last weekend. But the incident is merely a symptom of an airlines industry that’s lately been plagued with terrible service all around.
American travelers, when they’re not being dragged off of airplanes, have been dealing with minimal legroom in the economy section, in-flight meals that have been curtailed, airfare that usually comes with added fees for everything from checking luggage to in-flight wifi, and pre-flight groping from the TSA.
Flying has become hellish these days. But who is to blame for the poor service of America’s airlines?
Eve Peyser of Vice has a couple of culprits: deregulation and mergers. She wants the federal government to start regulating airlines again as if they were utilities or taxi cab companies. That means the federal government would set airfare and airlines would compete just on service. “In the short term, boycott United, yes. For the long term, however, have you considered socialism?” Peyser wrote.
The real problem is not that there is insufficient government in the airline industry; it’s that there is too much regulation and protectionism.
Marc Scribner of the Competitive Enterprise Institute notes that domestic airlines are protected against foreign airlines that want to fly domestic routes in the U.S.:
Since the Air Commerce Act of 1926, federal law has imposed ownership and control restrictions on U.S.-flag airlines. These restrictions were tightened under the Civil Aeronautics Act of 1938. Under current law, the maximum foreign ownership and control share of U.S.-flag airlines is 25 percent (see 49 U.S.C. § 40102(a)(15)(c) for the relevant definition of “citizen of the United States”). This is why Richard Branson only held 25 percent of Virgin America prior to its sale to Alaska Airlines. The rest was owned by a New York hedge fund.
The Air Commerce Act of 1926 also prohibited cabotage (see 49 U.S.C. § 41703 and 19 C.F.R. § 122.165), whereby foreign airlines service U.S. domestic routes. There are extremely narrow emergency exceptions to this broad ban on foreign airline competition along U.S. routes and these typically are only granted when a remote domestic route in the Pacific loses all U.S.-flag carrier service—which has occurred in Guam, for instance.
As the domestic airlines merge and consolidate, they have few incentives to provide better customer service. Forcing them to compete with foreign airlines would also force them to compete on both price and service, which would compel them to become better.
Protecting airlines from foreign competition isn’t the only way government overregulates air travel. Ryan McMaken of the Mises Institute points out that government has put up substantial barriers to entry in the air travel industry.
The feds have even cracked down on attempts to modernize air travel. Just as Uber and Lyft have disrupted taxi cabs and changed how people get around in cities, some have tried to do the same for air travel. But the Federal Aviation Administration has shut down every “Uber for airplanes” attempt that’s been launched so far.
That isn’t the private sector’s fault. The problem isn’t that the airlines have too little socialism, it’s that they have too much.