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How to Fix Flying
Report

How to Fix Flying

A New Approach to Regulating the Airline Industry

William J. McGee and Ganesh Sitaraman
American Economic Liberties Project, 2024
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Editorial Rating

9

Qualities

  • Comprehensive
  • Eye Opening
  • Visionary

Recommendation

In 1978, Congress passed legislation deregulating the US airline industry. The goal was to make the sector more competitive, which should have resulted in lower consumer costs and more travel options. But since then, competition has actually decreased, with only four legacy airlines now serving passengers, who face increasing prices and reduced service. Aviation experts William McGee and Ganesh Sitaraman examine the industry and propose a regulatory architecture that would address these problems. Airline executives and passengers will find this a robust analysis of the sector and its issues.

Summary

Policymakers believed deregulation of the US airline industry would result in a better experience for passengers. They were wrong.

Flight delays, costly tickets, airline bankruptcies and poor travel conditions plague air passengers and industry stakeholders. Congressional action in 1978 intended that airline deregulation would increase competition. The legislation upended a 40-year period in which the Civil Aeronautics Board had managed carriers’ flights and pricing. While this bureaucracy was not ideal, the United States at the time had 12 major airlines, and passengers were, on the whole, satisfied with service and fares.

In the post-Board landscape, officials believed more airlines would enter the market, fares would decline, routes would expand and service would markedly improve. Fast-forward 45 years: The sector now relies on only four airlines, and passengers are upset about a lack ...

About the Authors

William J. McGee is a senior fellow at the American Economic Liberties Project and the author of Attention All Passengers. Ganesh Sitaraman holds the New York Alumni Chancellor’s Chair at Vanderbilt Law School and is the author of Why Flying is Miserable: And How to Fix It.

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