In important ways, airlines are already regulated, but some regulations serve to maintain market power and defeat the free market. These are practices that are legal only in the airline world and cry out for re-regulating airlines.
Code sharing allows Delta, for instance, to put its name on the ticket and then fly passengers on an Air France/KLM plane. That’s like allowing a Chevy to be sold with a Toyota name. It is basic false advertising that promotes consumer confusion and legal fraud.
Antitrust immunity lets international airline alliances operate as one and coordinate pricing and schedules for their own benefit, not for the consumer benefit. Re-regulating airlines is needed here.
A free market without the limitation of alliances and consolidation would mean that airfares would move with the costs of airline service. When fuel costs drop precipitously, airfares would follow.
But re-regulating airlines can help consumers.
Airlines should be held to their schedules. In Europe, all are punished for delays in service and consumers are compensated. Similar rules should prevail in the United States.
Egregiously outrageous fees such as $200 to $450 for cancellation of flights should be limited to a reasonable amount proportionate with costs. These kinds of wildly excessive fees should not be allowed.
Ever since the advent of ancillary fees, airlines have refused to reveal them upfront so that the free market can work. The Department of Transportation should require that airlines disclose all airfares and fees so consumers are able to comparison shop on more than just airfare alone.
Truth in advertising should also apply to seating charts. By holding back many seats for their elite level frequent flyers and marking them as taken, passengers believe that seating is more limited than it actually is. Many may decide that they need to purchase a seat upgrade.
Re-regulating airlines means changing the rules that allow airlines to distort the free market and can allow consumers to find a far better market where prices can be accurately compared.
This was previously published in a similar form by the New York Times in a debate about re-regulating airlines.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
