function hide_user_promo_bubble_second_stage() { var bubble = $("user_promo_bubble"); bubble.style.display = "none"; } function hide_user_promo_bubble() { var bubble = $("user_promo_bubble"); var myAnim = new YAHOO.util.Anim(bubble, { opacity: { to: 0 } }, 1, YAHOO.util.Easing.easeOut); myAnim.animate(); setTimeout("hide_user_promo_bubble_second_stage()", 1100); } function handle_promo_username(params) { var bubble = $("user_promo_bubble"); var img = $("user_promo_bubble_image"); var anchor = $("user_promo_bubble_link"); if (params.has_photo == "true") { img.src = "http://images.huffingtonpost.com/profiles/" + params.user_id + "-tiny.png"; } else { img.style.display = "none"; Dom.addClass(anchor, "wide"); } anchor.innerHTML = "Shared by " + params.user_name; anchor.href = "http://www.huffingtonpost.com/social/" + params.user_name; bubble.style.display = "block"; var myAnim = new YAHOO.util.Anim(bubble, { opacity: { to: 1 } }, 2, YAHOO.util.Easing.easeOut); myAnim.animate(); } if (HuffPoUtil.getUrlVar("user_promo")) { YAHOO.util.Event.onDOMReady(function() { var parts = document.location.hash.split(","), shared_by = "", badge = "", i; if (parts.length < 2) return; for (i = 0; i < parts.length; i++) { if (parts[i].indexOf("sb=") !== -1) { shared_by = parts[i]; } if (parts[i].indexOf("b=") !== -1) { badge = parts[i]; } } if (shared_by == "" || badge == "") return; var bubble = $("user_promo_bubble"); if (!bubble) return; var entry_id = HuffPoUtil.GetEntryID(); if (!entry_id) return; var user_id = parseInt(shared_by.substr(shared_by.indexOf("sb=") + 3)); if (!user_id) return; var badge_type = badge.substr(badge.indexOf("b=") + 2); if (!badge_type) return; script = document.createElement("script"); script.setAttribute("type", "text/javascript"); bubble.appendChild(script); script.setAttribute("src", "/include/share_track.php?a=view&eid=" + entry_id + "&uid=" + user_id + "&b=" + badge_type + "&cb=handle_promo_username"); }); } Congress May Bring Back Airline Regulation

WASHINGTON — Restoring financial regulation of the airline industry will be put before Congress if the Justice Department approves a proposed merger of United and Continental airlines, two key House members said Wednesday.

At a hearing on the merger, Reps. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, and Jerry Costello, D-Ill., chairman of the panel's aviation subcommittee, expressed concern about the impact the proposed deal could have on consumers and airline workers.

Deregulation has been credited with making airline travel affordable for the average American. But Oberstar pointed to the $2.7 billion the airlines earned in baggage fees in 2009 as evidence that consumers are no longer benefiting from the system. He said he believes there's support in the House for re-regulation.

"Hardly a day passes where I don't walk out on the (House) floor that someone asks me, 'When are we going to re-regulate the airlines?'" Oberstar told reporters after the hearing.

The legislation would impose federal regulation of airline pricing and re-establish a government gatekeeper role similar to that played by the old Civil Aeronautics Board prior to deregulation in 1978, Oberstar said. The board set standards for companies trying to enter the airline market and decided on a case-by-case basis which companies should be granted permission to fly passengers.

Deregulation worked for a while, bringing new, lower-cost carriers into the market and driving down fares, said Oberstar, who – as a junior congressman – voted in favor of deregulation. Most of those air carriers – as well as several "legacy" carriers dating back prior to deregulation – are gone.

The CEOs of United and Continental, who testified at the hearing, complained that competing against a steady influx of low-cost carriers who drive prices artificially low and then go bankrupt has weakened the airline industry.

Airlines have also suffered repeated shocks in recent years, including the Sept. 11 terror attacks, the SARS virus, volatile oil prices and the economic downturn. They have shed more than 158,000 full-time jobs since employment peaked in 2001 and lost an estimated $30 billion to $60 billion in recent years. At least 13 airlines have filed for bankruptcy in the past several years.

"The status quo for this industry is unacceptable," said United's Glenn Tilton.

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United's proposed merger with Continental would create the nation's largest airline. Tilton and Continental's Jeffery Smisek said the new company would be able to compete more effectively against large, foreign carriers in the international market.

The new airline's financial success will be based on "synergies" produced by combining the two carriers, not higher fares, Tilton said.

However, industry experts and consumer advocates were skeptical there would be any synergy savings other than reduced competition.

Costello said the committee will ask the Justice Department, which is reviewing the merger proposal, to determine if there is evidence to support the synergy claims.

"I'm looking for a way to preserve competition," Oberstar said. "That's what I voted for in 1978."

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Comments

[Bronxdude]

For republicans, free-enterprise means corporations should be unregulated and free to exploit the American public at will with no governmental interference. “No grown-ups around” – the republican anti-government, anti-regulation mantra. Under republican rule, banks should be free to gamble in risky subprime derivatives and still receive FDIC protection at taxpayer expense – the republican answer to reforming Wall Street. Republicans baulked at healthcare reform – a strategy primarily designed to elevate the standard of living for middleclass Americans – because such a restructuring of the economy would have involved 17% of the GNP; conversely, republicans rejected Wall Street reform, but offered no opposition to 6 financial institutions/banks controlling 63% of the GNP – a move primarily designed to benefit the wealthiest top 2%. Exploiting the middleclass represents a bipartisan effort. For example, Ben Nelson (republican masquerading as a democrat) owns $2 million in Berkshire Hathaway stock, so when it came time to vote for sweeping Wall Street reform, Ben voted against reform to protect Warren Buffett, who controls $63 billion in risky derivatives. Politicians are bankrolled by Big Corporations, which is why, collectively, they are not concerned with protecting the bottom 95%; they are only concerned with continuing preferential practices that benefit the top 2% (their base). Just as long as republicans are in power, they support big government, as evidenced by Bush expanding the federal government 47%, when compared to Clinton.

[Fergie1]

In the late 1970s United (UAL) Airlines wanted to become a one stop World Wide Travel venture.
At this time they already owned Westin Hotels and they then bought Hertz. Well bigger didn't work, they had to sell off Westin and Hertz and go back to their core business. This is when most of the lay-offs began to occur and people were hired on what was called a "B" salary. Disasterous!

So not allowing a company to become that large of an entity is worth regulating. I say to Congress, keep your eye on the ball with this.

[deepintheheartoftejas]

I think too many people here are confusing aircraft deregulation with the great deregulating phases led by Republicans in the 80s and 90s. Airline deregulation was initiated by Carter. It was led by Democrats. Ted Kennedy ran the committee that formed the legislation ending it, and he was the primary sponsor on the bill. The 78 deregulation was opposed by big business, and it left the common people far better off. It was a model of how smart deregulation can be beneficial.

[ecrichert12]

Now many people who opposed it on this site will suddenly support it, simply because it was done by a person with a different letter next to their name. Lemmings.

[goodwill2]

They could fix and expand the trains / Amtrak if they wanted to. I have limited vision in one eye (due to diabetes) and I believe rail travel could be excellent for 200-500 mile trips. It would be more comfortable and less expensive than flying.

[ecrichert12]

Amtrak - convenient as it is on the northeast corridor - hasn't been run in the black in decades and still is more expensive than airlines over nearly any distances.

[coolaid8]

Please, please, please fix TSA before taking on the airlines. I've racked up over 1.5 million miles over the past 25 years. TSA is easily the worst part about flying.

[jasongrundy]

What!!!! We don't already have airline regulations...When will we understand that regulations is both great for people and companies.

[Paul Russell]

Considering all airlines are merging into one big one....the Government will sooner or later have to step in and not allow these mergers to continue occuring

[sc300nc]

That is a completely false statement. There are plenty of airline choices available.

[beatrix]

YESSSSSS! Those of us who worked in the travel industry back in the 70's predicted that deregulation would lead to the demise of many carriers (remember Panam, PSA, Western, Braniff, Republic, and on and on) and-- ultimately-- passenger services. This has all come true-- in fistfuls!! Time to toss out the Reagan-era mess and return some structure and sanity to the industry. Cheap tickets aren't cheap if the airlines don't even provide the most basic services (like food and a pillow and luggage carrying)-- and safety is ever in question. Hope this passes!

[sc300nc]

Cheap tickets are what passengers want. The market decides, not the government. If passengers do not like the add-ons, that will be reflected in their decisions to fly airlines that do not have those charges. Safety has never been better.

[ecrichert12]

Passengers have never been willing to pay for extra services. Is it a coincidence that the low budget airlines like Southwest, RyanAir, and Jetblue are the most profitable, get the best ratings, despite offering less amenities than the giants?

If you want a pillow so bad, bring your own pillow instead of charging me more for the airline to give you one that some brat probably got snot all over anyway.

Airlines are still barely profitable as is, but tickets are incredibly cheap relative to the rise in prices in everything else in the last few decades (including jet fuel costs) and routemaps have expanded incredibly. Trying to manipulate the market is like trying to push a string - you rarely ever get it to go where you want it to - better off letting the other side pull.

[Fergie1]

That's right ecrichert12 - there's no other world outside America. I think we could use quite a few tourism dollars right now and people just love to travel the world with a pillow under their arm! RyanAir is an abomination and the CEO wants to charge for using the restroom facilities. If you don't see anything wrong with that, then carry on with eyes wide shut.

[efmo]

Much as I am not a fan of the reagan era of union busting & corporate "conglomerating", the article says the airlines were deregulated under Carter (which I had read somewhere else as well - but not sure if a republican congress - ? - played a role?)

[Fergie1]

From one ex-airline person to another - you are so right. I was with a certain carrier for 24 years starting back then and predicted exactly what you wrote. Unfortunately we (the staff) also became casualities of this and many lives were ruined by the greed and 'the winner takes it all' mentality.
Less competition and Darwin was alive and well.
Thank you for that and fanned!

[cvkathy]

Thank you Mr. Reagan - deregulation has really screwed things up.

[JoeBlough]

GOP says government is broken and they are determined to keep it that way.

[mrspiffy]

Industry worked OK before Reagan deregulated it.
http://yieldpig.blogspot.com/

[efmo]

Except wasn't it Carter who did this?

[jdacal]

No, if I recall correctly Reagan de-regulated right after firing every single air traffic controller.

[BoiseLib]

"Restoring financial regulation of the airline industry will be put before Congress if the Justice Department approves a proposed merger of United and Continental airlines."

How about denying the merger--And re-regulating the industry?

[ecrichert12]

Why would we possibly want to tell two businesses they cant form a partnership to better the interests of both's shareholders? Ever heard of porters five forces? This industry is a dog as it is, it doesnt need more help in screwing it up.

[hswanson2]

Because it is the governments responsibility to prevent a non-competitive environment, monopolies, price fixing, complete control over a product lifespan which is the opposite of the free competitive market. It is time for the government to break up the trusts and prevent new ones from forming.

[Sam Ritchie]

"I'm looking for a way to preserve competition," Oberstar said. "That's what I voted for in 1978."

So Oberstar has been in Congress my entire life. Neat.

[thumbtax]

Re-regulation that includes controlling fares is not a good idea. Consumers have benefited from deregulation through low fares. Southwest built its business on it. Increasing fares and decreasing competition is not good for the traveling public. Today's carriers are flying more passengers than ever before. Safety has not suffered.

[Reiziger]

Wrong. Safety has suffered because of airlines' increasing reliance on underpaid and overworked route pilots. Time was when being a commercial airline pilot was a distinguished profession. Now they are little more than flying bus drivers, carrying passengers on no-frills planes from one regional hub to another. I have friends who are commercial pilots for several such airlines and none of them makes over $25K/yr, most below that mark. Of the commuter airline accidents in the past 3 years, almost all of them track back to either pilot fatigue or error based on inexperience, the crash in Buffalo being one of the best-known.

Increased competition hasn't done much for fares, either, for the airlines claim all kinds of reasons for fare hikes: cost of fuel, cost of insurance, cost of security, etc. Some US airlines now charge for pillows and blankets: how long before one of them puts coin slots on the lavatory doors?

We bailed them out after 9/11/01. In fact, Delta was facing economic ruin in August 2001 but avoided bankruptcy thanks to Congress. Yet with each subsequent hardship - economic turndown, SARS, volcanic ask - the airlines keep going back to Uncle, hat in hand, looking for help. Since the airlines themselves seem to believe they need continual federal intervention to stay in business, perhaps we can just cut out the middleman and reinstate federal regulation. It cannot be any worse for passengers than it already is.

[sc300nc]

how has safety suffered? More people than ever are flying, at lower costs, with a very, very low percentage of accidents.

More government = higher prices and lower quality service

[a500n54]

Typical big government whats next mandating lead free toys

[ecrichert12]

That would be a great example of a non-sequitor.

[Husaria]

" Deregulation has been credited with making airline travel affordable for the average American. But Oberstar pointed to the $2.7 billion the airlines earned in baggage fees in 2009 as evidence that consumers are no longer benefiting from the system. He said he believes there's support in the House for re-regulation. "

Wow! are they going to come out of the woodwork when they hear this! The baggers, birthers and Beckers are going to go apoplectic. I can just hear it now......." Obama is turning us into the USSA....."

So, they great de-reg of the airlines is no longer benfiting the consumer. Shocking isnt it? Classic case of the thinking that the ' market ' will cure all our woes

[ecrichert12]

how does an industry making money imply that people somehow got screwed?

Why is it a problem anytime people make money? I thought that was the point of starting a business. If you want to start an airline with no fees, go ahead - if the economics make sense passengers may or may not prefer your brand.

[Husaria]

Correct. On a smaller scale.

If mom / pop business ' A ' treats its customers badly then the customer can go to mom / pop business ' B '. That does not work for extremely large business / services.

So, if you do not like Delta airlines, you go to American airlines. It is SSDD. You cannot go to ' different ' airline because they are pretty much all the same. The airline industry is so specialized that there really is no choice so the preference of brand really does not matter.