Apr 15, 2008
As our airlines shrink in number, we should all start thinking about re-regulation
Delta has acquired Northwest Airlines, in a merger that will result in the nation's largest single airline. United is on the brink of merging with Continental. The world of aviation in America -- a business of crucial importance to all of us, a public utility if there ever was one -- is fast shrinking in the number of its competitors, and competition will inevitably disappear when just a handful of giants set the fares and choose the routes. The few remaining upstarts will lose their ability to keep fares low, and our options in air transportation will be determined, eventually, by three or four carriers acting in parallel fashion to each other.
It was the possibility of healthy competition that caused Congress to de-regulate the airline industry years ago. Competition was the key. I'm not saying that we are necessarily on the brink of an industry lacking competition, but we are getting there. Because the system of air transportation is too important to be dominated by just three entities, because a public utility needs to be operated for the benefit of the public, we should all start thinking about what measures are necessary for the public interest. I will be writing more about this topic in the weeks ahead.
Write and read comments about this post.
It was the possibility of healthy competition that caused Congress to de-regulate the airline industry years ago. Competition was the key. I'm not saying that we are necessarily on the brink of an industry lacking competition, but we are getting there. Because the system of air transportation is too important to be dominated by just three entities, because a public utility needs to be operated for the benefit of the public, we should all start thinking about what measures are necessary for the public interest. I will be writing more about this topic in the weeks ahead.
Write and read comments about this post.
Labels: airlines, merger, regulation
Fifty years ago, 
Arthur Frommer is generally acknowledged to be the nation's foremost travel authority. He is the founder of the
