Airline deregulation deserves another look
Sen. Daniel Inouye says he plans to conduct Senate hearings of the possible re-regulation of the aviation industry.
Staggering airlines have increased pressure to abandon deregulation of the airlines enacted three decades ago. The collapse of Aloha Airlines and last week's declaration of bankruptcy by Frontier Airlines indicate a fresh look should be given to regulating airlines serving rural and remote areas.
Congress enacted the Airline Deregulation Act in 1978, ending federal control of commercial aviation and subjecting air fares and flight schedules to the forces of supply and demand. In a hearing last week before the U.S. Senate Commerce Committee, David Banmiller, Aloha's chief executive, said deregulation has been proved to be potentially harmful in achieving stable air serve for small regional markets such as Hawaii.
Inouye said he plans to conduct hearings on possible re-regulation of airlines, and Rep. Mazie Hirono said the issue of airline regulation has drawn interest. Indeed, Rep. James Oberstar, D-Minn., chairman of the House Committee on Transportation and Infrastructure, warned that pressure to re-regulate the industry is mounting in Congress.
The pressure results not only from the demise of Aloha, ATA , Skyway and Skybus and the Frontier bankruptcy but by American Airlines canceling more than 1,000 flights, stranding 100,000 passengers, while wiring in airplanes was fixed. Oberstar suggests that the wiring problems were a result of previous laxity in regulation by the Federal Aviation Administration.
When Banmiller complained to the federal Department of Transportation about predatory pricing, he said he was told, "We'll look into it." That lack of response is a sign that regulation is needed in some circumstances, if not across the industry. Rural and remote areas cannot depend on free enterprise to assure adequate service, and congressional hearings should result in a method of addressing the problem.
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