Lou, much that you are writing about the airlines is actually a repeat of the
disaster of markets for railroads in the late 19th C. I tried to discuss that in
a book, The End of Economics.
Louis Proyect wrote:
> >From the preface to Paul Stephen Dempsey & Andrew R. Goetz, "Airline
> Dergulation Mythology" (Quorum, 1992):
>
> --Under deregulation, the airline industry lost all of the money it made
> since the Wright Brothers� inaugural flight at Kitty Hawk in 1903, and $1.5
> billion more.
>
> --After more than 200 bankruptcies and 50 mergers, we now fly the oldest
> and most repainted fleet of aircraft in the developed world.
>
> --Of the 176 airlines to which deregulation gave birth, only one remains
> and, as of 1992, it too was in bankruptcy.
>
> --In 1991, fully 30 percent of the nation�s fleet capacity was in
> bankruptcy or close to it.
>
> --All the U.S. airlines together are now worth less than Japan Airlines
> individually.
>
> --Despite predictions to the contrary, deregulation has produced the
> highest level of national and regional concentration in history.
>
> --Although more people are flying than ever before, the percentage increase
> in domestic airline passenger boardings was lower during the first decade
> of deregulation than in every decade that preceded it.
>
> --While most passengers now fly on a discounted ticket, the full fare has
> risen sharply under deregulation, far exceeding the rate of inflation, and
> the discounts are now encumbered with onerous prepurchase, nonrefundability
> and Saturday-night stay-over restrictions. Today�s airline ticket is
> therefore an inferior product compared to its counterpart under regulation,
> which provided passengers with considerable flexibility.
>
> --Despite allegations to the contrary, average real fuel-adjusted ticket
> prices are higher than they would have been had the pre-deregulation trend
> continued. Pricing has not only increased above pre-deregulation trend
> levels, it has grown monstrously discriminatory.
>
> --Industry costs increased sharply under deregulation, while the long-term
> trend in productivity improvements fell flat.
>
> --Hubbing-and-spoking, the dominant megatrend on the deregulation
> landscape, has caused some air travel to regress back to the DC-3 era,
> robbing aviation of its inherent advantage and people�s most precious
> commodity�time.
>
> --Business travelers lose billions of dollars in productivity as a result
> of circuitous and time-consuming hub-and-spoke operations.
>
> --Service has declined under deregulation, while consumer fraud has increased.
>
> --Although fatality statistics do not reflect it, the margin of safety has
> also declined.
>
> --Labor-management relations have deteriorated.
>
> --Americans now rate airlines as the industry in which they have the least
> confidence.
>
> Louis Proyect
> Marxism mailing list: http://www.marxmail.org/
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
