What’s Wrong With American Air Travel?

What’s Wrong With American Air Travel? April 28, 2017

Tight accommodations, high prices, delays and cancellations, abysmal customer service. Nearly everything is wrong with American airline companies. In Europe, by contrast, fares are lower and service is better. Even a brief 1 1/2 hour flight has time for a quick sandwich, a fair sight better than a packet of mini-pretzels.

You’d think that some air carrier in the US would step up and make life a bit less miserable. The fact that no one does suggests that the problem lies in the structure of the industry. According to the Economist, the reason for the divergence is simple and obvious: Competition. “American policymakers have presided over a wave of mergers in the past few years. The biggest four carriers in America between them now control 80% of the market, compared with just 48% a decade ago. . . . In Europe, where the top four carriers have around 45% of the market.”

They point to three policies that encourage competition in Europe: “European regulators have tried harder to preserve competition between existing carriers”; “Europe has made it easier for foreigners to boost competition by entering new markets”; “Europe has also encouraged competition between different airports and their main operators.”

They conclude with some trust-busting suggestions: “America’s regulators should loosen the cap on foreign ownership, take away slots from incumbents and promote the use of secondary airports to give new entrants a leg-up. If that doesn’t yield dividends, regulators should consider breaking up the big airlines. Allowing competition to wither was a huge mistake. It should be rectified.”

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