The Trump administration is floating rolling back Biden-era rules that tightly regulate how airlines issue refunds, assign seats, and advertise. In reaction, some so-called “consumer advocates” are throwing a temper tantrum, suggesting the White House’s agenda “reads like a passenger’s nightmare.”
Americans should not be fooled by the Chicken Little warnings. As is often the case, too much government regulation of the free market is a detriment to consumers rather than a savior.
You see, private businesses are wired very differently than government bureaucracies, where rigid procedure— rather than flexibility to better assist customers— is king. Anyone who has spent time at the local DMV or post office has witnessed how workers deliver bare-minimum service—punching the clock and following the employee handbook to the letter without consideration for the customer.
Why? Because there is no incentive to go the extra mile to attract repeat business. Regardless of how lousy the customer experience is, job security is all but guaranteed because the taxpayer is on the hook to subsidize the worker’s salary.
The airline industry, on the other hand, operates in a very different environment. More than a dozen major carriers compete on pricing, routes, amenities, and loyalty programs to attract consumers. These businesses live or die based on repeat customers. So, if an airline is unsuccessful at winning over the flying public, unlike the DMV or post office, it goes belly up and the consumer moves on to other options.
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Regardless of whether or not the government mandates a certain behavior, private businesses will do their best to satisfy customers; competition breeds accountability. McDonald’s, for example, does not need to be told by the feds to serve hot, salty French fries. The company’s executives understand that their signature side gives them the upper hand against competitor restaurants like Burger King or Wendy’s.
The same mechanism with travel companies is why hysteria over the Trump administration considering walking back certain airline regulations is misplaced. Sure, government rules should help to dictate safety protocols; experts at the Federal Aviation Administration (FAA) draw on decades of experience in this space. But does Uncle Sam need to nitpick how customers purchase a ticket or seat selection? Of course not.
In fact, too much government red tape can backfire on the very people regulators are intending to help. Prior to the Airline Deregulation Act of 1978, the federal government controlled where airlines could fly and micromanaged daily operations that resulted in a rigid travel experience. Consequently, flying was a cost-prohibitive activity that few could take advantage of.
After the skies were opened to the free market, the number of passengers went up as prices went down. Nearly 90 percent of Americans living today have flown commercially compared to less than one-in-four in the 1960s. Meanwhile, inflation-adjusted ticket costs have fallen by hundreds of dollars.
Modern air travel—whether for business or pleasure—is not without flaws. But, in general, flying has improved greatly over the last 50 years because the government has gotten out of the way. The sky will not fall because Biden-era travel regulations could fly away.
Jackson Shedelbower is the executive director of the Center for Transportation Policy.
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