Roll back airline deregulation? That’s no way to fly

Editor’s Note: This article has been updated to remove a mistakenly attributed quotation.

If you want to see how much flying has changed in the last 50 years, watch any scene from “Mad Men.” You will be treated to a true depiction of the so-called “golden days” of air travel.

Flying was, at that time, a privilege that few could afford, with limited carriers and service in the market.

Now, so-called industry experts are looking to upend this progress.

The American Economic Liberties Project recently released a white paper called How to Fix Flying. It recommends a new round of re-regulation to overhaul the industry.

Alas, the Liberties Project reflexively blames free markets for all of air travel’s perceived problems. It sees airlines’ competitive pricing models, passenger-compensation policies and other business practices as opportunities for government-mandated standardization across the industry.

They say we can have perfect air travel, but only if the government takes control.

Even if this desire is grounded in good intentions, its only outcome will be to keep Americans grounded. It is yet another example of the fallacy of the false alternative. Regulation won’t make for better flying — it will make for less flying and more expensive flying.

Deregulation and competition are the reasons the skies are accessible to so many people today. The government once fully regulated air travel, but it stopped doing so 45 years ago. It was not a Republican idea, either, but the brainchild of Sen. Ted Kennedy (D-Mass.) and his 1978 Air Transportation Regulatory Reform Act, which President Jimmy Carter (D) signed into law after most of Congress — including Delaware’s own Sen. Joe Biden (D) — voted for it.

Before deregulation, an agency called the Civil Aeronautics Board had complete control over domestic air travel. The agency dictated airfare pricing and had autonomy over new routes and flight frequencies between cities. It micromanaged the process to the detriment of the industry and, more importantly, to the detriment of consumers at large. 

This is part of the reason air travel was out of reach then for most people. As of 1977, only 25 percent of adult Americans had ever been on an airplane, according to an Ipsos survey. Think of the episode of “Mad Men” where Peggy complains that she’s never flown before. Today, almost 90 percent of Americans have flown commercial, and more than 50 percent fly before turning 16.

Thanks to our current deregulated market, Americans have more opportunities to fly, more schedule options for flying, more airlines to choose from and more opportunities for flyer-reward programs.

Air travel is also much safer than before deregulation. And because of competition, every airline is eager to brag that it is the safest. As the good folks at “Freakonomics” have long taught us, it’s safer to fly than it is to drive to the airport.

A single government-run airline could never promise as much safety as private-sector airlines already do with appropriate regulatory guardrails. And if government centrally-planned utilities were the answer to safety, then the Soviets’ Chernobyl nuclear power plant would be famous for quite different reasons.

This is not to say that we have to content ourselves with the status quo. If the federal government wants to make flying cheaper, it can start with policies making fuel cheaper by getting out of the way of domestic energy production.

You don’t have to be Don Draper to realize that increasing regulations on airlines is a bad idea. In real terms, airfares are lower today than they have ever been. Let’s keep it that way.

Jared Whitley has worked in the U.S. Senate and White House. He has an MBA from Hult business school in Dubai.