Saturday, February 12, 2011

Government and the Airline Industry

Turns out all those “Passenger Bill of Rights” and other government actions – intended to keep you from sitting out on the ramp in a commercial airliner for hours at a time – have done nothing other than lead to more canceled flights.
Last April new regulations went into effect that subject airlines to fines of up to $27,000 per passenger for waiting over 3 hours without access to the airport. (Time starts from the moment the jetway is pulled.)
Think about this: an average 737 with 150 passengers on board. At $27,000 per passenger that is $4,050,000 just for a single incident. Airlines would be crazy to even risk pushing back from the gate and getting stuck paying such a fine. A couple of incidents like this, and all profitability for a quarter or even a year could go down the drain.
It should come as no surprise that airlines are simply “pre-canceling” flights. In the past you might have left the gate in La Guardia knowing that it will be a couple of hours until wheels-up but there is a good chance some other flight will cancel and your flight can fit in it’s slot. Now, aircraft sit at the gate fully loaded or even delay boarding until operators know they will be able to quickly depart. Anything questionable is quickly canceled and aircraft are used for other purposes.
While there certainly have been a few examples throughout the history of airtravel when passengers were stuck on an airplane for an unreasonable amount of time, there was certainly no justification for this “Passenger Bill of Rights” and other regulations. In a free market, airlines would avoid disasters like this because “imprisoned” passengers do not make for good marketing or PR. Passengers would quickly decide what was acceptable and what was not – by voting with their wallets.
Instead the Congress chose to cave to a few loud voices and further burden a constantly struggling industry. All without a single benefit for 99% of passengers.

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