Preserve Competition in Airline Industry | U.S. Chamber of Commerce

Preserve Competition in Airline Industry

The American business community knows what regulatory overreach looks like, and we know the effect it has on economic growth. In 1978, Congress approved and President Jimmy Carter signed legislation to deregulate the aviation industry. A few years later, Congress also agreed to deregulate the motor carrier and freight railroad industries. By allowing free-market competition in these industries, we have experienced an unprecedented rise in reliability, safety, and efficiency.

Unfortunately, there is a troubling trend to push us back into the regulatory stranglehold of the past. For example, a provision in the Senate Federal Aviation Administration Authorization bill, S. 1405, would attempt to have government regulators interfere with the competitive environment in which our aviation industry currently thrives by attempting to regulate how air carriers’ price services.

Different airlines offer different services with different fee structures.  A heavy-handed regulatory approach to pricing would eliminate the ability of customers to choose what product and pricing works best for them. It also would hurt low-cost airlines that serve smaller communities by taking away a potential competitive advantage.

Since airline deregulation, domestic airfares, adjusted for inflation, have dropped 42 percent. During the same period, the number of commercial passengers has tripled to 820 million in 2016. This success story happened because the federal government got out of the way of private sector innovation and growth.

Now is not the time to move to a one-size-fits-all, government-knows-best approach. The U.S. aviation industry contributes $846 billion to our nation’s gross domestic product and employs nearly 424,000 people. After suffering from the economic downturn, U.S. airlines are finally on sound financial footing. The stability of U.S. aviation carriers has allowed for increased investments in infrastructure, aircraft, and other customer enhancements. American business cannot allow for a setback in an industry critical to moving people, goods, and the economy as a whole.