Nonsense From The New York Times On How To Address Airline Reliability

The New York Times ran an op-ed on Friday by William J. McGee full of bizarre nonsense, arguing that it’s time to re-regulate the airlines, because Southwest Airlines melted down over the holidays and the FAA (government regulator!)’s antiquated NOTAM system failed for several hours this past week.

Here are some of the key arguments, each one of which is… special in its own way I guess?

  • The current regulator has the authority it needs but doesn’t use it this isn’t an argument for changing what authorities the regulator has though!

    Despite having the authority to investigate and fine airlines for unfair and deceptive practices, the Department of Transportation and its subsidiary the F.A.A. have deferred to the private sector for decades, and have done little to rearrange market incentives that lead to these problems.

  • Airlines aren’t profitable. I guess that’s an argument to re-regulate, because people forget that a core mission of the federal government during the regulated era was to ensure that airlines were profitable. The federal government used to tell airlines where they could fly and what they could charge – not to ensure prices stayed low, but to make sure that they stayed high and there was limited competition, so incumbent airlines made money. The theory was that without profits they wouldn’t invest in safety (this turned out not to be true).

    The airlines are not a consistently profitable industry, shown by their need to come hat-in-hand for a bailout at any sign of economic turbulence.

  • Government air traffic control is bad because airlines lobby against programs that would require them to spend money although re-regulating airlines wouldn’t stop their lobbying, the more regulated airlines are the more they’d be lobbying regulators. He dismisses reform of air traffic control itself though, because “that doesn’t get at the problems we’ve seen in the private sector that are similar, and in many cases, worse” without giving any reason why.

    In fact, air traffic control in Canada is managed by a non-profit. They separate out the regulator from the service provider (always a best practice in regulating safety!). And as a non-profit they can issue bonds to borrow for technology upgrades, they aren’t subject to the vagaries of annual congressional appropriations cycles.

Hinging the argument for re-regulation on Southwest’s lack of technology investment, when the government’s technology investments have themselves fared poorly (which is why we’re talking about issues of FAA structure and funding!) makes little sense.

And oddly, the author makes the case for the Civil Aeronautics Board – abolished by deregulation – because it limited competition and ensured airline profitability. That’s obviously bad for consumers. On the other hand, almost as an afterthought at the end he mentions “more F.A.A. funding and eliminating federal pre-emption” which are core ideas worth fleshing out rather than eliminating competition and raising fares.

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