The Soviet Skies

The Washington Post's Anne Applebaum has a mini-revelation: Flying in America now reminds her of air travel in the old Soviet Union.

Which is no surprise, as most airlines nowadays are heavily subsidized, uncompetitive companies, operating in what is, in effect, a centrally planned economy.

Link via Matthew Yglesias.

Comments

[MP]

I'm pleasantly surprised that her solution wasn't additional government regulation of the ailine Evil Empire. Her facts aren't quite right about the subsidies though. A recent article in Regulation magazine discussed that the oversight panel of the government airline subsidies was actually doing a good job. So although money has been allocated, much of it wasn't spent.

[MP]

Hmm...no anchor link. OK, here it is...

http://www.cato.org/pubs/regulation/regv26n1/v26n1-noted.pdf

[matt]

will,

I did too, and reed's was funnier

[Zathras]

I sympathize with Applebaum's complaints about airline service, but isn't what we see with airlines more obviously related to the problems faced by many large, undiversified companies when their business environment changes radically?

Such companies typically have large stranded investments, not only in their capital equipment but in their employees. United and Delta just can't just replace unionized workers with Southwest-style go-getters, and unionized workers previously granted lavish pay and benefits will not give them up while becoming Southwest-style go-getters just because they are asked to. Major airlines remind me less of the USSR than of General Motors circa 1980, but with less room to maneuver.

As far as service specifically, look, people complain about this all the time, and complain just as bitterly when airfares go up. They complain about airline regulations about carry-on bags, and complain that airlines allow other passengers to carry on bags that ought to be checked. They complain traveling with small children is difficult, and complain about other passengers who insist on traveling with small children. You're talking about stuffing hundreds of people in an aluminum tube, getting them from A to B at hundreds of miles an hour, and doing it cheaply and profitably. It may be possible to do this and still have everyone love you, but it isn't easy.

[Brad S]

Zathras - from an airline employee, well put. The only correction I would make is that Southwest is the most Unionized airline in the business. The major differences between Southwest and the hub-and-spoke majors are: 1. Southwest's point-to-point system uses aircraft, facilities, and employees more efficiently than the hub-and-spoke model (although the hub-and-spoke model does allow for connection of more city pairs and thus hub-and-spoke is advantageous on the revenue side), and 2. Southwest has done the best job of handling its Unions (i.e. coming up with win/win compensation items like profit sharing, stock options, and other forms of variable compensation as opposed to things like defined benefit pension plans, etc).

[headshaker]

"Would you go to a restaurant that couldn't find its cook and waiters and got you your meal after leaving you in the parking lot for an hour and a half? If you subsidize lousy performance, you get more of it. If second-rate airlines go out of business, tough. Splendid, in fact."

http://www.lewrockwell.com/reed/reed7.html

Touche!

[Anonymous]

And all because some stupid gubmint morons at Boston's Logan Airport didn't (or wouldn't) do their job on September 11, 2001.

[will]

odd, didn't i read this yesterday?

[Cesare/Bartnicki Nikki]

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