The single nuttiest idea in aviation history was published in the Dallas Morning News, an argument by Matt Andersson, the founder of an airline startup (Indigo Airlines), to merge the nation’s airlines into one and have the government run it.
The gripes about the airline industry that should spur us to this action?
If it isn’t an act of God delaying flights, like weather, any number of other complicated variables can disrupt the smooth flow of operations. A maintenance problem, an air traffic control computer glitch, a crew scheduling snafu, a grounded airplane (like the 737 MAX), or a simple but disruptive problem like a broken passenger jet bridge, or one unruly passenger who has to be escorted off the plane by law enforcement, or a medical emergency that requires a diversion or special handling after landing.
There’s never any suggestion how a single national airline is going to solve weather, air traffic control computer glitches (in the U.S. air traffic control is already run by government), problems with the Boeing 737 MAX or disruptive passengers.
- Employees can strike
- Management can hurt employee morale
- Airlines can make bad decisions about their fleet, schedules, routes, pricing, and any number of other decisions
The airline industry is “among the most complex” and “the stakes are unforgiving” so let’s have government run it. Other than government employees not generally being permitted to strike, it’s not clear how government handles any of these complexities better. And the piece offers no suggestion of how it would either.
However there’s “one fundamental, overriding problem that keeps the airline industry in a constant state of disequilibrium” that nationalizing the industry and merging all airlines into one would solve. The author believes that problem is that there is too much competition.
Andersson acknowledges this “may seem counterintuitive or perhaps even absurd.” Why yes, yes it does. Yet for someone like him who believes that “market is so saturated with competitors and choices” and that it’s a bad thing when “no single firm can dictate price” you reach the conclusion competition shouldn’t be allowed and government should set prices — as they did prior to deregulation when the Civil Aeronautics Board dictated which airlines could fly specific routes and what prices they’d charge in order to prevent competition, keep prices high, and ensure airline profits.
Airfares Since Deregulation
Prices may not be high enough at some times, but Andersson also thinks they are too high for last minute business travel. One of the ways airlines maintain market power, he notes, is keeping out foreign competition — although he advocates less competition, not more.
Not only are prices too high and too low at the same time, service is bad, and we can be rest assured a government monopoly airline will provide better service – just like it worked in the good old days?
Aeroflot ad from 1970
Andersson fails to offer an example from around the world of a state-run airline he’s modeling this after. Instead he suggests airlines are like “any other mass-transportation system like a commuter rail or subway.” He must not have ridden New York’s subway system in recent years, or read federal reports on the safety problems at DC’s metro.
Since he says that “one thing is in short supply: imagination” it’s even harder to envision how an airline, run to service the objectives of politicians elected in a democracy, will become more imaginative.
The true challenge is that we have too few airlines there’s little opportunity for new entrants to engage in experimentation. We’ve seen mergers winnow down the field, and anti-trust immunized joint ventures winnow it down further on international routes as well, with huge impediments to starting a new airline (foreign airlines need not apply) and once started little opportunity to access gates and in some cases takeoff and landing slots at the most valuable – government owned and operated – airports in the country.
Instead of tackling the real problems in the airline industry, offering a model or plans to improve, he simply wants you to imagine getting everything you want and that’s government.
Imagine there were just one major airline, but it actually worked the way you want. This airline has regulated service standards (like comfortable seat pitch and shape), flat and predictable everyday fares like a commuter train, and a broad, comprehensive network. Can competition make it better than that? Not likely, unless you want to fly on a private jet.
State Airline on Approach to New York JFK in 2014, Copyright zhukovsky / 123RF Stock Photo
The problem is that one size fits all isn’t what we have, and we live in a world of tradeoffs. The notion that a government-run airline is going to “work the way you want” when different people want different things is silly.
The plan has two steps:
- Merge United, American, and Delta “eliminating or reducing duplication and waste” having fewer flights and less competition. Then give better “seat comfort and spacing, and fares.” Fewer flights, each with fewer seats, and all at lower prices, all while ensuring “reliable financial performance.” He says that “if airline executives were honest, most would be relieved.” But they’d be happier if they could deliver this product, make more money, and have a pony.
- Nationalize the entire industry making it “a pure public mass transit system.” Since the U.S. government already owns airports (unlike much of the world), and both regulates and runs air traffic control (unlike most of the work, and contrary to ICAO safety recommendations), why not just go all-in?
The Government Airline: Singapore Airlines A380 Seats, On-Time Operations, and Low Low Prices!
This way airline won’t have to “worry about in day-to-day operations” (although hopefully the government would hire people to do this?) and passengers wouldn’t have to spend time “search[ing] for a flight that is both affordable and likely to arrive on the day it is scheduled” (since they’d have no choices at all).
Indeed this “future of air travel is modern, technologically sophisticated, comfortable and humane, and with one standardized class of service — fast” just like every other state enterprise. Oh he wants to eliminate frequent flyer points, too.
This idea is even worse than Robert Kuttner’s nutty arguments for re-regulating the airlines.