Fear of Flying: Where are the Market Solutions?
posted by Frank Pasquale
Anyone who flies knows that the experience has been deteriorating for years. The problem isn’t just a lost glamor; basic necessities are getting jettisoned:
Since late December, we have heard of literally dozens of incidents in which passengers were stuck on parked airplanes, unable to get off for four, six and even 10 hours. Typically, food and water were scarce, and often, the toilets started backing up after a few hours. [One] flight attendant . . . said that when a plane is delayed or stuck for hours on the ground, it is the passengers’ responsibility not to eat or drink, to avoid overtaxing the toilets.
Great advice for diabetics. Anyway, after the JetBlue’s Valentine’s Day disaster, outraged passengers lobbied Capitol Hill for some guarantees of food, water, and reasonable responsiveness to stuck passengers. (They appear to have some chance of succeeding.) The industry and anti-regulation gurus responded that such rules would put too heavy a burden on an struggling industry.
My question is: has market competition for humane passenger conditions begun to emerge? Are airplanes competing on enforceable promises not to, say, expose trans-Atlantic passengers to sewage? Or is this an area where competition is simply unable to emerge, since no one is really going to pick through the (invariably one-sided) contractual terms applicable to a given flight?
I suppose I will be accused of trying to price the poor out of airflight, in order to preserve “Cadillac-level” service for the rich. Perhaps I’m just too risk-averse. But I predict more and more people would rather just stay home than even face a small chance of the types of indignities, delays, and rough treatment now becoming commonplace in the “friendly skies.”
July 3, 2007 at 3:15 pm
Posted in: Administrative Law, Economic Analysis of Law
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Responses (6)
William McGeveran - July 3, 2007 at 3:47 pm
Some smaller carriers, like JetBlue and Sun Country, are trying to distinguish themselves based upon supposedly friendlier service and more amenities. They are putting marketing muscle behind the premise, too, so the information asymmetry problem may be overcome.
But of course there are other problems with this market, starting with ginormous barriers to entry, not only from huge capital costs (planes, fuel) but also from constrained space at major airports.
Austrian - July 3, 2007 at 8:33 pm
The market solution here involves what price people give to an inhumane tarmac experience multiplied by the relatively small chance that it will happen to them. If airlines have a good record relative to other airlines they will advertise that and independent information gatherers (the travel press, other airlines, etc.) will help check those claims. Then potential passengers will weigh that record against the price (in many cases perhaps higher) that the airlines charge.
Will passengers still have awful experiences? Of course. Will this keep costs down relative to government regulation? Very very probably. The regulations will likely add costs and, unless the regulators have extensive “facts of time and place”, to paraphrase Hayek, will have inadequate information.
So, with this in mind, my question to Professor Pasquale is, what’s your beef? This isn’t really a market failure, but a case of how things wouldn’t be any better in an alternative regulatory scenario (at least with increased regulation) given current technology, costs, and demand. Are you wishing for something that isn’t really available, but just feel sorry for all those passengers? Or, do you really think there are regulations available that will meet the choice I lay out here: price of ticket versus chance of being stranded on the runway (versus, I might add, a whole bunch of other variables–inflight meal, frequent flyer miles, etc.).
Austrian - July 3, 2007 at 8:36 pm
The market solution here involves what price people give to an inhumane tarmac experience multiplied by the relatively small chance that it will happen to them. If airlines have a good record relative to other airlines they will advertise that and independent information gatherers (the travel press, other airlines, etc.) will help check those claims. Then potential passengers will weigh that record against the price (in many cases perhaps higher) that the airlines charge.
Will passengers still have awful experiences? Of course. Will this keep costs down relative to government regulation? Very very probably. The regulations will likely add costs and, unless the regulators have extensive “facts of time and place”, to paraphrase Hayek, will have inadequate information.
So, with this in mind, my question to Professor Pasquale is, what’s your beef? This isn’t really a market failure, but a case of how things wouldn’t be any better in an alternative regulatory scenario (at least with increased regulation) given current technology, costs, and demand. Are you wishing for something that isn’t really available, but just feel sorry for all those passengers? Or, do you really think there are regulations available that will meet the choice I lay out here: price of ticket versus chance of being stranded on the runway (versus, I might add, a whole bunch of other variables–inflight meal, frequent flyer miles, etc.).
austro-marxist - July 3, 2007 at 11:14 pm
I have to wonder: has Austrian actually been an airline passenger within the past decade?
Austrian - July 4, 2007 at 1:02 am
Austro-Marxist: If I had been what would I be advocating? What should the solution be? Or is your point that I seem unduly harsh? Well, ok, but what about my underlying contention that there is an imperfect market with no better alternative available?
I seriously would like an answer, because I don’t see a better way for the airlines to run without imposing costs that will drive the price of airline fares up to such an extent that society will be worse off.
Miriam Cherry - July 4, 2007 at 3:11 am
Finished Ursula K. LeGuin’s “Changing Planes” while I was last stuck on the tarmac… highly recommended!
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