Friday, June 18, 2010

Back in Time: Congress Threatens to Re-Regulate Airline Industry

Perhaps the 25th anniversary of the blockbuster hit Back to the Future has got some members of Congress feeling nostalgic.

It appears they’re big fans of Back in Time, one of the Huey Lewis & The News hits from the film.

Because that’s where certain politicos are indicating they’d like to take an entire industry – to the past.

Their target? The airline business.

Speaking to reporters Wednesday after a hearing on Capitol Hill, James Oberstar (D-Minn.), Chairman of the House Transportation Committee, claimed that “Hardly a day passes where I don’t walk out on the (House) floor that someone asks me, ‘when are we going to re-regulate the airlines?’”

Oberstar has been a critic of the airlines for some time, despite the fact that in his early years in Congress, he voted for the 1978 Airline Deregulation Act.

That legislation was a welcome breath of fresh air for the flying public. It resulted in a boom in competition, and lower airfares.

But at the close of Wednesday’s meetings, Oberstar said that if the merger between Continental and United Airlines is approved, he will introduce legislation that would reverse the progressive steps taken in the 1970s to deregulate the industry.

And Oberstar is not alone with his threats. The chairman of the House Transportation Subcommittee on Aviation, Jerry Costello (D-Ill.), has indicated similar sentiments. And Oberstar believes there is support in the House for re-regulation.

What would it mean?

Prior to 1978, the Civil Aeronautics Board regulated the U.S. airline industry, granting – or denying – permission to companies wishing to get into the business. Furthermore, it regulated fares and routes.

So were Oberstar et al to get their way, anytime a new start-up like JetBlue or Virgin America came along, they’d face much tougher hurdles just to be granted permission to fly by government bureaucrats.

And once they start flying, they’d be told where they can fly, and how much they could charge.

Is going back to the 1960′s and 70′s considered “progress”?

Most people would not argue with having regulators set safety standards for the industry, or to coordinate an air traffic control system for use by everyone in the nation’s airspace. And many also applaud efforts to increase consumer rights.

But it’s a very different thing to in effect direct the operations of private businesses.
I won’t even get into the government’s terrible track record when it tries to run a business, like the U.S. Postal Service, or Amtrak.
Back in Time? Good song – but a bad idea for the airline industry.

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