Who doesn’t want Ryanair and its cheap flights (passengers often just pay taxes and fees on sale prices) to offer the same fares domestically in the U.S.? Well, based on current law, our government doesn’t. And as I’ve said before on NPR’s Kojo Nnamdi Show, in an article for CEI’s Monthly Planet, and while moderating a panel discussion, the regulation of international air travel must change.
Unfortunately, cabotage rights that prohibit European airlines like Ryanair from operating on American domestic routes are not on the bargaining table. But a bilateral U.S. – EU “open skies” deal that was provisionally agreed to on March 2 should be approved, even if it’s only, as is said in an Economist article, “baby steps.”
The airline industry has much in common with other network industries such as railroads, electrical power, and telecommunications. The airline industry remains heavily regulated despite partial deregulation with the 1978 Airline Deregulation Act, especially with international travel.
Like all network industries, the air travel sector involves both flows and a grid. The flows are the mobile system elements: the airplanes, the trains, the power, the messages, etc. The grid is the infrastructure over which these flows move: the airports and air traffic control system, the tracks and stations, the wires and cables, the electromagnetic spectrum, and so on. Network efficiency depends critically on the close coordination of grid and flow operating and investment decisions.
Consumers would benefit if governments would get out of the way and allow the market to determine international routes, just as U.S. consumers benefited when the 1978 Act allowed the market to determine the number and frequency of domestic routes.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
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