hat is it that the Big Five airlines
want? Their vision is straightforward and clear: They want the
government to stay out of the operation of their businesses, and
they want the government to prop up their finances.
Now, is that asking too much?
And, by the way, they reserve the right to stand behind the
Airline Deregulation Act in defense of their independence, but
there are times when they may want a bit of relief from it.
In other words, the airlines have an adolescent view of the
world ("Get Out of My Life, but First Could You Drive Me &
Cheryl to the Mall?" is the apt title of a book on teens by Anthony
Throughout much of the '90s, airline execs acted like adults and
pointed out how well deregulation worked -- more people than ever
were traveling, fares were lower and their companies were
profitable. And, they could take credit for all this good stuff
because they stood up on their own hind feet and achieved it
through revenue growth and a minimum of governmental
After 9/11, however, the airlines called for, and received, a $5
billion cash payout and $10 billion in loan guarantees. Congress
bought into the argument that exceptional times called for
A bit of regression could be expected after the shock of 9/11.
But now looms a war with Iraq, and airline execs are preparing to
ask for what they requested, but didn't get, last time. Continental
chairman and CEO Gordon Bethune told Travel Weekly that, should war
break out, he would look to the government to suspend passenger
taxes "and other forms of taxation," allow the airlines access to
the strategic petroleum reserves at their acquisition prices and
"most important, [grant] antitrust immunity so that we could
coordinate and rationalize services with other airlines."
Yikes! "Antitrust immunity"? "Coordinate and rationalize
services with other airlines"? Assuming this means the airlines
could carve up the country and each take on a proportionate share
of capacity, isn't that exactly the type of behavior that led
Congress to pass the Airline Deregulation Act in the first
Though they stand ready, willing and able to receive cash,
subsidies, tax holidays and relief from the competitiveness of the
marketplace, some airlines bristle at the suggestion that the
government can get involved in any other aspect of the business
related to 9/11 fallout.
Last August, the Department of Transportation told airlines they
shouldn't charge more than $25 (each way) to accommodate passengers
with a ticket on a carrier that suspends a route due to insolvency
Indignant, American and Delta sued. Both cite this DOT action as
running contrary to the Airline Deregulation Act. (Incidentally,
the DOT said that the airlines could charge more, but they'd have
to show that additional costs were justified.)
Now, in principle, I agree with the airlines -- I'm not at all
sure the DOT has the authority to have set this limit, and I'm keen
on letting marketplaces set prices for services, even when the
services are offered at times of duress. After all, even
casket-makers get to set their own prices.
But the airlines' willingness to cast aside the tenets of the
Airline Deregulation Act when it doesn't suit them, and then wrap
themselves in it when it serves their purposes, speaks volumes
about how deep their regression has set in.
Should there be a war, Congress -- and it would take an act of
Congress -- should not grant antitrust immunity. It's true that not
every airline may survive the aftermath of a war with Iraq, but
there may be worse consequences if Congress gives in to the
Every parent knows there are times when adolescent behavior
leads to someone being grounded.