20 April 2008

Did Ending Regulation Help Fliers?

This is from a story in the NYTimes


Check out the cool picture with the story.

Most people would think that deregulation has been a boon to all. I wholeheartedly support that notion. Less Government is more. But lately I have started to look at some of the fundementals of the pricing model for airlines. It is not good. Yield is WAY down. With Fuel prices now being the largest discretionary item of airline cost – there is essentially a new set of people holding the airlines hostage. The airlines face an uncertain future with oil at its current levels. We believe that there is unlikely to be a fall in the price of all of any significance.

So while deregulation helped just about everyone – it has hurt some.

I would argue that there is a case for some regulation coverage for certain types of activity. Now is a good time to think about the economic value of the air transportation system.
Lets hope someone does it soon.



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