Airline Deregulation, Revisited
Thirty-five years ago this month, Senator Edward Kennedy (D-Mass.) held hearings on the federal government's regulation of the airlines. His primary focus was on fares. Why were they so high? Officials at the Federal Trade Commission believed that regulation itself was the primary reason. The Civil Aeronautics Board had forbidden price competition. The result was service competition instead: empty seats, steak sandwiches, Aloha bars near the galley, and sky-high prices. A business traveler may be pleased to find an empty seat for his briefcase, an FTC official said at the time, but probably doesn't realize he is paying full fare for the briefcase.
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