Flying Blind: Airline Deregulation Reconsidered

Flying Blind: Airline Deregulation Reconsidered

June 24, 2009
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In this wideranging new Demos report on the airline industry, co-authors James Lardner and Robert Kuttner trace the industry's current troubles back to the decision, three decades ago, to lift most federal regulation of air travel. The authors point out the rise in regional carrier flight hours, the rise in outsourcing of heavy aircraft maintenance, service cutbacks and hidden charges, wage and benefit reductions, and "more consolidation in the hope of surviving long enough to be in a position to turn a profit and expand again during a future economic recovery."

The report links these practices to a broader "race to the bottom" on service standards and labor practices. While many industry leaders blame the airlines' difficulties on the price of fuel and the current economic crisis, Flying Blind uncovers a three-decade-long pattern of declining profitability and rising instability. 

The report concludes that "while the price of flying has come down over the past thirty years...low airfares are as much a problem as an achievement if they leave an industry without the resources to maintain service standards and make crucial investments in equipment, technology, and human capital.”