Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Washington, D.C., December 8, 1998 – The most efficient way to reduce congestion and increase competition in the nation’s air travel system is to reduce, rather than increase, intervention by the government, according to a new study published by the Competitive Enterprise Institute (CEI), Airline Deregulation: The Unfinished Revolution. The study, written by Robert Poole, president of the Reason Foundation, and Viggo Butler, chairman of United Airports Unlimited, argues against re-regulation of air travel and instead calls for the expansion of the market into areas still controlled by the government.
The current air traffic control (ATC) system combines a lack of incentive to meet the demands of the consumer and an increased amount of government red tape limiting their ability to keep up with a rapidly changing airline industry. "New technology exists which could produce up to a 50 percent increase in capacity at congested airports like LaGuardia and Washington National," comments Poole and Butler in the paper. "But these new technologies are only likely to come about in a timely fashion if the structure and funding of today’s obsolescent ATC system is dramatically changed." They recommend "commercializing" the ATC and taking it out of the federal bureaucracy.
The study further examines the benefits of reform of airports themselves. Currently, the Federal Aviation Administration (FAA) calculate the maximum safe number of operations an hour and allocate them into specific time slots. This attempt at central planning, the paper argues, is arbitrary and results in less desirable outcomes than those provided by the market.
Poole and Butler argue instead for market pricing of airport access. "Congested airports should be allowed to levy market-based access charges during peak hours," they state, "with the revenues earmarked for capacity-enhancing investments within the same metro area."
"Airline deregulation has been an enormous policy success," the Poole and Butler conclude. But, they point out, these gains are threatened by attempts to impose new controls on the airlines. "What’s needed, instead, is to finish the job of deregulation, removing the remaining non-market elements of the air travel system."
CEI, a non-profit, non-partisan public policy group founded in 1984, is dedicated to the principles of free enterprise and limited government. For more information, contact Emily McGee, director of public relations, at 202-331-1010.