National Airline Policy
39 Pages Posted: 7 Dec 2014
Date Written: November 26, 2014
Since enactment of the federal airline deregulation law more than thirty years ago, the global airline industry has shrunk significantly and every major domestic airline has sought bankruptcy protection (at least once), bringing into question the central assumption of the 1970s deregulation era, free competition in a market space with few barriers to entry. The persistence of low air fares is regularly cited as proof of the success of airline deregulation, but where base air fares have remained affordable, the overall expense of commercial flying is higher for travelers at particular origins and destinations. The “innovation” of ancillary fees for carry-on baggage, seat selection, and in-flight amenities, to say nothing of the inefficiency of congestion and delays caused by an old aviation infrastructure, has impaired some of the most important promises of airline deregulation for airline passengers, too. Meanwhile, airline carriers themselves are concerned about passenger fees they must charge, taxes they must bear, an aging air traffic system in which they must operate, and threats they daily confront in the form of national security risks and competition from state-sponsored foreign airlines. These realities suggest that the time is at hand for a national aviation policy.
This Article is the first to evaluate the legal implications of a proposed national aviation policy. An important part of this discussion involves presentation of recent decisional law — including Northwest, Inc. v. Ginsberg and Spirit Airlines, Inc. v. Dep’t of Transp. — along with a pending federal case attempting to enforce private passenger rights under RICO. These cases, along with pending legislation purportedly aimed at improving the experience of airline passengers, illustrate a deep disconnect between passengers and airlines, on the one hand, and airlines and aviation regulators, on the other hand. In all, while a national airline policy may be desirable, the industry’s victim narrative advanced in the call for such legislative and regulatory reform of commercial aviation rules and regulations is unhelpful. Moreover, the unilateral view that the federal government is both the villain and savior of business realities borne out of deregulation policy deflects and misses an opportunity for airlines themselves to self-examine legal and business practices that disappoint and aggravate their customers. In this context, this Article suggests that a national aviation policy is a pro-business initiative more than a pro-customer campaign and invites a multi-lateral approach to reforming national airline service, beginning with the industry and traveling public disabusing themselves of the notion that airline profit is a “dirty word” that should be sacrificed for illusory lower fares.
Keywords: airline deregulation, national airline policy, airline passenger rights
JEL Classification: A1, A11, A13, D4, E3, G18, H3, H50, H70, K20, K23, L15, L50, L91, L93
Suggested Citation: Suggested Citation