Chaos in the skies
JUST WHEN you think air travel cannot possibly get any worse, it keeps deteriorating in new ways.
Consider US Airways, whose efficient "kiosk" system for self-service check-ins was scrapped in favor of a more cumbersome one that regularly crashes, the fruit of its merger with
I am writing these words at 36,000 feet, where Delta, another malefactor, no longer provides complimentary meal service on its six-hour nonstop Boston-to-Seattle route. Delta doesn't even offer meals for purchase. (On the shorter, but competitive, Boston-to-London flight, it manages to serve two.) Delta, which emerged this week from bankruptcy, pinches pennies in other ways, with sardine-like coach seats.
The other menace of today's deregulated flying experience is the crazy quilt of fares. Deregulation allows airlines to adopt any pricing scheme the traffic will bear. The object is to fill all seats, with the maximum total revenue. This is said to be economically efficient. But this chaos is not the only way of optimizing revenue. Indeed, the proof of its failure is the epidemic of airline bankruptcies. In most years since deregulation, the airlines have lost money.
While this system may be "efficient" in one textbook economics sense (manipulating fares to maximize revenue per seat), it is not efficient for the customer. It costs me more to fly to Washington, D.C., than to Washington State, even though it's less than one-sixth the distance. And, of course, there are huge penalties for making changes.
In an economics textbook, it is "efficient" to levy these penalties. But real people frequently need to change their plans. They often need to book travel on short notice. Why should they be penalized for this?
Fares bear little relationship to airlines' costs. In principle, it's possible that every person on the same flight was charged a different fare. Some paid less than others, not because they booked early but because they got discounts negotiated by a corporate employer. Yet it costs the airline the same to fly the passenger in seat 21A as in 21B. These corporate discount deals produce few if any economies of scale, since seats are still mostly booked one at a time. So why should different passengers be charged different fares for the same flight?
In nearly all products that we buy, there's plenty of competition and ample gradations of price and quality. I can spend $75 for a hotel room, or $250, or $1,250. I can buy a suit for $169 at
But not with air travel. If you want to fly nonstop from Boston to Seattle, there's Delta . . . or Delta. The two shuttles to Washington National mysteriously charge identical, exorbitant fares. Nor are there options of price and quality. You can suffer steerage; or plunk down a month's pay and go first class.
Another casualty of deregulation is a modern fleet. Before deregulation hit in the late 1970s, ticket prices dropped steadily because airlines had stable earnings and could invest in more efficient planes. Today,
Air travel, in short, is no free market, and it is not delivering what consumers want. So it's time to declare the experiment in airline deregulation a failure.
We are prisoners of monopoly airlines and lunatic pricing schemes. Paradoxically, even with their market power, the airlines cannot turn a reliable profit, so they keep debasing the service-crowding seats, eliminating meals, cutting employee pay, even reducing the amount of circulating air.
Congress should investigate what went wrong -- and regulate the terms of airline competition. Airlines should be held to minimum standards of passenger comfort. We need limits on wild disparities and discrimination in ticket pricing. The airlines will still be able to fill seats, by offering last-minute deals.
The received wisdom among economists is that deregulation worked out fine. Lots more people are flying, and some are getting real bargains. But passengers wonder why we can't have consumer choice, reasonable prices, and decent service, too.
Robert Kuttner is co-editor of The American Prospect and a fellow at Demos. His column appears regularly in the Globe.
( Correction: Robert Kuttner's column Friday on airline travel incorrectly described a Delta flight that did not provide meals. That flight was from New York to Seattle, not Boston to Seattle. The column also stated incorrectly that Delta has a Boston-to-London flight. It does not. Furthermore, the column stated incorrectly that Delta provides the only nonstop Boston-to-Seattle service. In fact, JetBlue and Air Alaska provide nonstops from Boston, and Delta does not.)
