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Thursday, April 06, 2006

Deregulation Gone Mad - by William Pfaff

A man who played a key role in the deregulation of the U.S. airline industry in 1980, Tom Allison, at the time chief counsel to the U.S. Senate Commerce Committee, says that if senators had known then what they know now about airline deregulation, they would never have passed the measure.
 
Allison says that by lifting restrictions on airline competition, and on where airlines could fly, Congress unintentionally created unending disruption and cost to both industry and consumers, with gross accompanying inefficiencies.
 
In an interview given to the International Herald Tribune in February, intended to influence the current debate in Europe over airline deregulation, he said the human and other costs of U.S. airline deregulation outweighed benefits to consumers, which were chiefly lower airfares on the popular routes between big cities that attract competition.
 
Small-city air service, typically provided in the United States by single carriers, has greatly increased in cost, or has simply been abandoned. From any big American city, Allison said, "It's cheaper to fly to Paris than to Missoula." In practice, to get to Missoula, in Montana, you now need a car, the Greyhound Bus or a bicycle.
 
Allison said that deregulation cut airline salaries, slashed retirement benefits, forced job cuts despite rises in the frequency of airline services, bankrupted many formerly great airlines or forced them into bankruptcy protection, ruined standards of airline service, raised fares on most non-mainline services, and made life miserable for travelers and airline employees.
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