Typology of Those Favoring Airline “Re-Regulation”

Megan McArdle offers a trenchant observation about those who call for greater regulation of the airline industry (I hesitate to call it ‘re-regulation’ as commercial aviation is already among the most heavily regulated industries). 

Like everyone else, I hate the delays and various indignities of flying.  On the other hand, I like the fact that it’s costing me $100 to fly to Tampa to pick up my car in two weeks; absent deregulation, that trip would cost a lot more than twice that amount.  I think it’s telling that complaints about deregulation of the airlines come almost entirely from three groups of people:

1)  People who have no idea what they are talking about
2)  Affluent people
3)  People who fly a lot for work

The third group, especially, would like to basically cut the bottom out of the market, so that coach is a vastly more pleasant experience.  They don’t care that this will raise prices, because they aren’t paying for the tickets–most of them probably don’t particularly care if this means that they fly less.  But of course, the only way to raise the level of service is to raise the cost, which means a lot of people who don’t have jobs that send them hopping from city to city wouldn’t be able to fly at all.  Remember the Brady Bunch trip to the Grand Canyon?  You young people may not remember, but that’s what all family vacations used to look like.  You may climb into the back of a station wagon for a two day trek to Canada, but I’ll take flying,

Her number three is precisely what I called out Richard Posner on back in April.

And it’s little surprise that the “Business Travel Coalition” is calling for re-regulation, oddly because of how important commercial aviation is to the economy.

Meanwhile, for Matthew Yglesias, labor-management class warfare is Maslow’s hammer; and he seems to think that business travel is a nail. Folks who fly for work in less pleasant conditions than previously have ‘gotten a pay cut’ which somehow generates surplus profits that translate into more executive perks ‘like corporate jets and first class tickets.’

I suppose that if class warriors abandon consumers who couldn’t previously afford to fly in favor of fighting battles for capitalist middle managers and salespeople, that’s really a victory for proponents of markets. But it also displays a lack of understanding of the specific facts of air travel as it currently stands.

First, because the purchase of premium class tickets has taken a hit this year, Yglesias’ executives are buying fewer first class tickets rather than more.

And second, because domestically it’s more likely that those middle managers flying incessantly are the ones who will be sitting up front rather than their bosses, as roughly 90% of domestic first class seats are upgrades awarded to frequent flyers rather than paid first class tickets. And those frequent flyers can board first (thus securing overhead bin space) and sit in their choice of aisle or window at the front of coach if they can sit in front of the curtain (on those carriers that still separate the classes via a curtain).

Meanwhile, Yglesias draws no connection to the increased flying driven by lower prices and greater worker productivity that drives incomes. Strange, indeed.

(Both links via Economist’s View, which has an excellent overall post on why airline service isn’t as bad as you think, I don’t endorse all of the particulars but the post is 90% correct.)

Update: Kevin Mitchell writes in the comments that the Business Travel Coalition has not called for re-regulation.  I take him at his word that reports to the contrary mischaracterize his position.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. >>roughly 90% of domestic first class seats are upgrades awarded to frequent flyers rather than paid first class tickets>>

    Do you have a citation for this?

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