BerkeleyBob

Airlines: Some Costs They Can't - And Shouldn't - Cut

Deregulation theoretically allowed the airlines to compete by lowering fares thus benefiting passengers. The problem is that some of the cost factors are variable (fuel), the air traffic control system has been underfunded (possibly a subsidy to the airlines but most assuredly a public good), and entry of non-legacy competition (Jet Blue, Virgin, SouthWest) limited by airport and runway constraints. Does deregulation work over the long haul? More people are flying at lower fares, but there are some real externalized public costs. Good article; we know that commuter airlines and feeder pilots are having it even worse than the majors.