Proponents of the Airline Deregulation Act of 1978 often point to the relatively low prices in the industry today as proof that deregulation was a success. But this week‘s guest on Sea Change Radio, Bill McGee believes that the connection is specious at best, and that advocates are making the mistake of confusing cause and effect. McGee, a consumer advocate in the aviation sector and a senior fellow at the American Economic Liberties Project, shares his perspective about the long-term problems created by airline deregulation, explains why it often gets credited for saving the industry when it shouldn’t, and looks at how sustainability is not a big enough factor in the way that airline prices are determined.
Narrator| 00:02 - This is Sea Change Radio covering the shift to sustainability. I'm Alex Wise.
Bill McGee | 00:18 - So if you just look at a chart and say, oh, since 1978 airline safety has improved. Well, statistically, it absolutely has. But it was improving long before that. And the, and in fact, the improvements before 1978 were much greater.
Narrator | 00:34 - Proponents of the Airline Deregulation Act of 1978, often point to the relatively low prices in the industry today as proof that deregulation was a success. But this week's guest on Sea Change Radio, bill McGee believes that the connection is specious at best, and that advocates are making the mistake of confusing cause and effect. McGee, a consumer advocate in the aviation sector and a senior fellow at the American Economic Liberties Project, shares his perspective about the long-term problems created by airline deregulation explains why it often gets credited for saving the industry when it shouldn't, and looks at how sustainability is not a big enough factor in the way that airline prices are determined. I am joined now on Sea Change Radio by Bill McGee. He is a senior fellow at the American Economic Liberties Project. Bill, welcome to Sea Change Radio.
Bill McGee | 01:44 - Thanks very much, Alex. It's a pleasure to be here.
Alex Wise (AW) | 01:47 - So the American Economic Liberties Project, AELP, what is its mission? Why don't you give us a brief snapshot of the organization, if you can?
Bill McGee | 01:55 - Sure. AELP is about five years old. It's a Washington based nonprofit think tank. And, uh, the mission is really simple. We fight monopoly power where wherever it occurs. So I have colleagues that are fighting monopoly power in financial services, healthcare, uh, Ticketmaster, when you're getting your Taylor Swift tickets and, uh, you know, the market is too consolidated to get a better price. And of course, I handle, um, airlines and travel and airlines, which consumes overwhelmingly most of my time is an industry that is, as you know, uh, overly consolidated. It's basically an oligopoly at this point with four major carriers controlling 80% of the market. So we fight that power, and we're always trying to find ways to increase competition and make life better for consumers.
AW | 02:43 - So I was surprised as I dug into the history of deregulation. I always thought it was a Reagan era initiative, but it preceded Ronald Reagan. It was a Carter administration policy from 1978. Why was I confused about that? That's not an uncommon mistake to make, is it?
Bill McGee | 03:03 - Not at all. Alex, I can't tell you how many times I've written about deregulation. And in the comments below, people will write, thanks, Reagan. The fact is Reagan wasn't even in office, as you pointed out in 1978, Jimmy Carter was president, a Democratic president, and both the House and the Senate were controlled by Democrats. That's where deregulation came from. It actually was spurred by the left, not the right people. Like Ralph Nader testified in favor of it. Senator Ted Kennedy introduced the bill in the Senate. To just step back a moment, the industry was regulated from 1938 to 1978. And I think there's a lot of confusion over that too.