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Schatz: Airline regulations will only raise ticket prices


So why is Congress still trying to push them through?

By Senator Dave Schatz

The cost of flying in the United States has reached record lows, but you wouldn’t know it. Just by listening to how people talk, it seems like complaining about the cost of flying is a national past time.  Despite its bad reputation, the numbers tell us a different story; one where free market competition has driven down prices and improved safety and quality.  Yet a Congressional proposal is eager to reverse this progress with new rules and control over the aviation industry.

But here’s what the facts say: This past year was not only the safest year to date, we also had fewer flight cancellations than ever before and the fewest bags mishandled.  Overall, Americans were more satisfied than they’ve ever been with the airline industry.  Domestic travel prices are at an all-time low.

Prices have been dropping steadily since airlines were deregulated in 1979.  Before, it was illegal to charge less than $1,442 (adjusted for inflation) for a flight from New York to Los Angeles.  Today, at the time I wrote this article, I could buy the same ticket for about $280. Ticket prices have fallen 41%!  Taking away the federal middleman revealed outrageously low demand for airline tickets.  In order to meet the market, prices fell and Americans have been flying ever since.

The Senate Bill brought before Congress would reauthorize the Federal Aviation Administration as a presiding body and would control airline pricing through the Secretary of Transportation.  Part of their job would be determining whether fees are unreasonable.  They claim it would save the average passenger money, but history tells us this could produce the opposite effect, by promoting higher ticket fares and fewer options for domestic flyers.

Competition is the driving force behind our falling ticket prices.  There are 11 different airlines to choose from, such as the big names of Delta and United, alongside smaller, cheaper airlines like Spirit and JetBlue.  Online pricing tools help you compare flights within seconds, pulling pricing from all over the internet and informing consumers on the best deals available.

Airlines have been operating at a loss since the 80’s, driving their fee accumulation on services such as baggage check, wifi, food, and so on.  Despite being frustrating additions to what seemed like a great deal, these fees are a desperate attempt to offset the mounting losses airline industries are facing.

Between 2001 and 2011, airlines lost over $51 billion dollars trying to keep Americans in the air.  As the cost of production, rising fuel prices, and increased safety precautions all chip away further at their budgets, they will have to raise prices to cover the difference.  This is just business.

Inserting a bureaucrat in the middle won’t help.  Smaller airlines depend on having the cheapest tickets on the market in order to survive.  When they’re forced to decrease their biggest source of income, they’ll soon be run out of business by the bigger airlines, further monopolizing the airline industry.

When it comes down to it, deregulations just flat work.  Removing constraints and arbitrarily assigned price points gives the free market a chance to do what it does best; create competition, enforced flexibility, and consumer accountability, driving prices down and quality up.  Before 1979, only 20% of Americans had ever flown.  That number is now 82%.

It’s disappointing to see a Senate bill wants to reverse the effects of the free market, but you chose.  Do you want a $300.00 dollar tickets with 25.00 dollar fees for reversal, baggage check, and food?  Or a non-refundable, non-changeable ticket you paid more than $1,000.00 for?

Senator Schatz is the Chairman of the Senate Transportation, Infrastructure and Public Safety Committee.