Mark Kahan

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The Wreckage of Airline Deregulation

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Confessions of an Airline Deregulator

They were sure deregulation would unleash fierce competition, produce better service, and result in lower prices. Five of six assumptions turned out to be wrong.

The young lawyers and economists who came to Washington in the late 1970s with Alfred Kahn, the architect of airline deregulation, had an uncommonly heady experience. They created real change. Their blueprint enjoyed bipartisan support and its initial success exceeded their rosiest expectations. Things look far different today. We who are still willing to defend airline deregulation are a lonely lot, at least outside the small world of government bureaucrats and professional economists who remain true believers. There may be a "silent majority" out there who appreciate their improved access to air travel. If so, they are drowned out by the deafening complaints of passengers who think service has never been worse and fares have never been higher, and from employees who have lost their jobs through mergers and bankruptcy. At the very least, we have to face up to the sobering realization that the robust competition unleashed back in 1978 may not endure. Long-established airlines continue...