Air Deregulation, 13 Years Later

September 16, 1991

R.I.P., air transport regulation. Critics said you made little economic sense, carriers said they could give better service if you were banished and consumers thought they could get better deals if the government laid you to rest.

Thirteen years later, it's clear mistakes were made. Carter administration regulators who opened American skies to cut-throat competition gave little thought to protecting smaller carriers. Yet of 150 new carriers launched since 1978, 118 are gone, merged into dominant national carriers or wiped out completely.

R.I.P., People Express, New York Air. Your innovative pricing and upbeat advertising could not survive the realities of predatory "yield management" ticket pricing by such heavyweight fliers as American, United and Delta. R.I.P. to Eastern. "The wings of man" were not strong enough to support long-haul, nonstop routes. And almost R.I.P. for TWA and Pan Am, which have struggled since the advent of hub-and-spoke feeder systems kept passengers corralled in the major airlines' systems. The double-headed computerized reservation systems owned by American and United, skewed to favor their makers, compounded this trend.

Where there were 24 national air passenger carriers, now there are half as many. Consumers, once thrilled by fire-sale ticket prices, now look to foreigners' invasion of U.S. markets to keep the domestic airlines honest as ticket prices head upward and flight delays and long-way-around commutes scramble their lives.

Consolidation may make it easier for U.S. carriers to power into markets in Europe or the Pacific Rim, but it has Americans riding in the oldest jetliner fleet in the developed world. Some $162 billion worth of new airliners are scheduled to replace those planes. Airlines say service improvements are imminent, too. But so far, deregulation of the skies has been, at best, a mixed blessing.

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