http://blog.wired.com/cars/2008/06/re-regulate-com.html
Wired is arguing that the airlines should be reregulated because the airlines are losing so much money. I think they’re absofreakinglutely insane. It seems like they think there are two states to capitalist systems. Regulated and unregulated. Really, there’s a huge grayscale between the two and airlines even with deregulation are still more on the regulated side than unregulated. The FAA, the Air Traffic Control, the TSA… All are regulatory nightmares created by a meddling government. Not to mention all of the environmental regulations, regulations on the energy producers, regulations on how long pilots can fly, regulations on darn near everything except who can take what routes. And they think it’s deregulated because congress flipped a switch and opened up a tiny portion of it.
Lets look at their plans and the real reason it’s so screwed up.
Giving the government a role in pricing and prohibit new airlines from offering below cost fares that makes flying unprofitable for everyone.
Price fixing to benefit the large airlines and keep them from getting undercut by more efficient competitors with lower piggish overhead. So they lose less money. And get fewer handouts from the capitalism ignorant government. The problem isn’t the cost of the tickets, it’s the government bailouts. Without them a capitalist system has a very effective way to deal with inefficient, piggish competitors. THEY DIE. Their assets are parted out and bought. And the supply and demand in their market adjusts so that another carrier can profitably take their spot.
Amending the Railway Labor Act so that unions and management both “adopt more moderate positions”.“ Translation: Make strikes by unions illegal and force them into binding arbitration.
So they lost the ability to complain that their routes aren’t covered by anyone else, and they lose business when they go on strike. I wonder if the government run by union fanatics would go for this?
Pressuring airlines to use the larger jets, which means you won’t be flying those annoying 50-seat regional jets between Cleveland and Cincinnati anymore, but you’ll only have two flights a day to choose from, instead of eight.
If it weren’t for these regional jets many airports wouldn’t be able to operate at all. This also seems to be a dreadful hackish way to chase your smaller competitors away.
Developing a replacement for America’s antiquated air traffic control system. (Most of us won’t live to see this one, so don’t hold your breath).
A government operated system that runs on such horribly antiquated crap that it’s a wonder it stays up at all. I’m sure that a free market system would be much more effective. Buckle up though, the way congress is going the air traffic system’s mode of operation will be the norm for fields as diverse as health care and energy soon enough.
In the end they talk about them raising rates rapidly and many going out of business. This brings me to the REASON for this that they failed to mention.
ENERGY. The energy prices are going through the roof. There are several reasons why. The primary one is that China and India are both taking off with their economies, and are paying far more for energy than we are. They can afford it because their economies are going crazy. The other problem is that for the last 15 years we’ve been locked down in our domestic energy production by the politicians marking huge swathes of the country and shoreline as no-exploration zones. They’ve also been passing new laws like crazy to ban research and development of making portable liquid versions of our massive coal and oil shale reserves.
The former CEO of jetblue has been trying for years to get the government to let him build coal to oil plants to safeguard the profitability of his airline. He finally gave up because they’re just have the blinders on in congress. He’s resigned from jetblue and is starting a new airline based in Brazil because they actually understand what’s going on and have solutions.
It’s because of government regulations and other distortions to the market caused by government we’re in this mess, and telling government to fix it by further regulating it is like putting out a forest fire by dumping helicopter loads of lighter fluid on it.