“Consumers have become fed up with the poor quality of air transportation,” and there is “no doubt that the criticism of the industry is well deserved.”
Who said that? American Airlines did, in a petition filed with the Department of Transportation asking for rules to give airline passengers better information about various segments of air travel.
Don’t be misled. American Airlines is just a little smarter than the
dwindling number of other airlines. They know the wisdom of bending a little
before a hurricane of consumer complaints flooding the inactive Department of
Congressional hearings, newspapers, television and radio reports about
the great airline mess have reached new peaks of intensity. Flight delays,
cancellations for alleged “mechanical difficulties,” when the real reason
is an insufficient number of passengers, heavily advertised discount fares that
are always “sold out” whenever you call, poor service at the phones, the counter
and on the planes — these are some of the causes for the groans and shouting
one hears at airports these days. Amidst these outcrys, I am hearing the word
“deregulation” uttered in disgust.
Whenever I hear the word “deregulation” I think of Ronald Reagan who
applies that term almost exclusively to shoving aside law and order against
corporate fraud, abuse and pollution. But airline de-regulation started before
Reagan in the hopes that more new airlines would start to give the traditional
large airlines more competition in price, routes and service.
At first, this started to happen. New airlines entered, prices dropped,
and while service did not get better, at least, when you got through on the
telephone, you could get a cheaper fare from New York to Buffalo than going
Then the mergers started to accelerate in 1984. The Department of Trans‑
portation, which is supposed to monitor these mergers for anti-competitive
impacts, just could never say no. Eleven mergers requested; eleven mergers
approved. Northwest acquired Republic and gained over 80 percent of the
Minneapolis-St. Paul market and over half of the Detroit market. TWA acquired
Ozark and secured three quarters of the St. Louis market. Delta merged with
Western, Texas Air took over Continental and acquired Eastern and People Express
which itself had devoured Frontier. And now two stable, profitable airlines -‑
USAir and Piedmont are merging.
The impact of competition-reducing mergers has not been good on consumers.
First, there is the service-chaos that comes from one airline like Northwest
trying to digest Republic. Second, the airline industry is completing a ten
year cycle when it went from a regulated oligopoly. (few firms) to an unregulated
oligopoly. That will spell higher prices and higher levels of company arrogance.
Soon there will be only six airlines dominating the domestic airline
business. Notice the recent headline in the Wall St. Journal: “Five Airlines
Move to Meet Price Rises by 2 Other Carriers.” I always thought companies are
supposed to lower prices to meet the competition. But that contrary behavior
is what economists describe as the workings of a tight oligopoly.
What to do? Well, don’t rely on Ronald Reagan. He de-regulates in fact
what he is supposed to regulate in law. Congress did not deregulate safety nor
did it deregulate consumer protection, noise controls nor the antitrust laws.
But Ronald Reagan has frozen these laws.
Cornish Hitchcock of the Aviation Consumer Action Project (ACAP), a group
I started in 1971, recommends that Congress give you, the airline passenger, a
federal right of action if you are victimized by an unfair or deceptive practice.
That means you could go to court and recover your actual damages or $1,000,
whichever is greater, plus your attorney’s fees from an airline that misled or
The second proposal focuses on making it easy for mistreated passengers
to join with one another in a fully staffed airline passengers’ consumer action
organization. This can be done by Congress simply requiring the airlines to
place a readable notice on all airline tickets which invites passengers to join
such a Congressionally chartered organization for modest annual dues. Such an
action group would be controlled by its members’ votes and would have full time
lawyers, economists, engineers and other skilled people to take on the airlines
before Congress, in the courts and, most importantly, through head-to-head negoti‑
There are many other problems that Secretary Elizabeth Dole’s Transportation
Department and its subsidiary, the FAA, are neglecting such as aircraft safety
standards, in-plane emergency equipment, crew safety, and tobacco smoking. Little
will be done about all these areas before that “notice to join” appears on all
airline tickets and ticket jackets.
The legislative proposals now before Congress will not be enforced unless
there is a powerful passengers group standing tall and alert behind these laws.
That ticket notice will bring tens of thousands of such passengers together.
After all, the notice to join reaches them at, shall we say, their peak point of
For more information about this notice proposal, write to ACAP, P. 0. Box 19404, Washington, DC 20036.