Comments on: Fear of Flying: Where are the Market Solutions?

By: Miriam Cherry

Miriam Cherry — Wed, 04 Jul 2007 10:11:15 +0000

Finished Ursula K. LeGuin’s “Changing Planes” while I was last stuck on the tarmac… highly recommended!

By: Austrian

Austrian — Wed, 04 Jul 2007 08:02:20 +0000

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.

By: austro-marxist

austro-marxist — Wed, 04 Jul 2007 06:14:03 +0000

I have to wonder: has Austrian actually been an airline passenger within the past decade?

By: Austrian

Austrian — Wed, 04 Jul 2007 03:36:57 +0000

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.).

By: Austrian

Austrian — Wed, 04 Jul 2007 03:33:49 +0000

By: William McGeveran

William McGeveran — Tue, 03 Jul 2007 22:47:02 +0000

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.