Tags: Consumer | Flying | Airports | Free-Market Forces

Consumer Flying Would Benefit From True Free Market Forces

Consumer Flying Would Benefit From True Free Market Forces
(Dollar Photo Club)

By    |   Monday, 28 September 2015 12:55 PM

American air travel would be better served if it operated within a true free market.

How many times has this happened to you?  You go to a dirty airport with long lines and at best food that is “eh” in a less than desirable atmosphere. You bring a bag or two, or try to change your flight, and get hammered with huge fees that have no bearing on the cost to the airline. 

You get on the plane and get stuck in a cramped seat with loud people sitting right on your elbows. 

You end that trip not wanting to fly again for a long long time.

Airports should be nice, comfortable and clean.  The airlines should not nickel and dime travelers with excessive bag and change flight fees that make them extra billions in income. America needs more free market forces to make travel less painful.

First, our nation has the worst airports in the whole world. 

The web site Priceonomics studied 71 large airports and studied the overall quality of the flying experience using data from the website Skytrax. They found that two airports in Seoul, South Korea were, by far, the best airports in the world.  Out of the top 20, only the San Francisco International Airport made the cut. 

On the list of terrible airports, the United States ranked much higher.  Dalaman Airport in Turkey was ranked the worst, but American airports ranked Newark, N.J., at fourth, Miami, Fla., at seventh and Washington-Dulles at eighth with three others in the top 20.

One reason why our airports are not very nice is the way we fund them.  Right now, Congress is up against a September 30, 2015 deadline to renew expiring funding for the Federal Aviation Administration (FAA). 

The Hill reports that “Airports are blaming airlines' opposition to a proposal increasing the amount of money passengers can be charged to help pay for facility improvements for a standoff in Congress that is threatening federal aviation funding.”

Airports want the feds to increase the Passenger Facility Charge (PFC) by $4.00 per ticket for improvements to airports. As long as Congress reduces the federal excise taxes on the ticket, this would help to improve travel while keeping cost down.

While you are having a miserable time traveling, the airlines just made the most money since 2007. 

The L.A. Times reports “commercial airlines reported net income of $5.5 billion for the three months that ended in June, a 53% increase over the same period last year, according to financial data released Monday by the U.S. Department of Transportation.” 

One of the reasons for that is the tax treatment of bag fees and change fees, in addition to lower aviation fuel prices.

The Times reports “the formula for the ninth straight profitable quarter: fuel costs that have dropped about 30% since the same period last year, combined with passenger totals that have jumped nearly 10%, and fees from checked bags and reservation changes that have climbed about 5%, according to federal data. Revenue from fares has remained nearly flat over the last year.” 

The federal government has issued tax regulations that allow bag and change flight fees to be untaxed, therefore the government has created a perverse incentive whereby the airlines use those fees to make more money.

To add insult to injury, Peter Greenberg reports “it’s no secret that many airlines have been quietly adding seats to the back of their planes. But you know what that means — more of you are now being squeezed into the main cabin.” 

And a lack of competition is one reason why airlines can treat passengers like cattle.

Open Skies agreements provide competition for the three big domestic airlines, yet the airlines are trying to use the power of government to impose protectionism.  They don't want free competition and lower prices, because that would cut into the bottom line.

More competition, some nicer airports and Congress fixing the tax code would go a long way to restoring free market forces to air travel.  That will benefit both consumers and the air travel industry as a whole.

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ChrisVersace
Airports should be nice, comfortable and clean. The airlines should not nickel and dime travelers with excessive bag and change flight fees that make them extra billions in income. America needs more free market forces to make travel less painful.
Consumer, Flying, Airports, Free-Market Forces
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2015-55-28
Monday, 28 September 2015 12:55 PM
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