The planes and the bees

Marie Force, the archives manager at Delta Air Lines, posts fascinating historical items at Delta’s blog Under the Wing. Today she notes the anniversary of the death of one of Delta’s founders, C. E. Woolman, who had a quotation worth sharing here: “Running an airline is like having a baby: fun to conceive, but hell [...]

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Deregulation “clearly, definitely” a good idea: an interview with Alfred Kahn

Sorry for the light posting around here. I’ve been working on some major writing projects that will appear over the next few months. In the course of one of them, I had occasion to chat with Alfred Kahn, the chairman of the Civil Aeronautics Board in the late ’70s and the “father of airline deregulation” [...]

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Who says airlines can’t make a profit?

One of the most-voiced complaints about deregulation is that airlines have been consistently unprofitable since deregulation. That’s not true, according to this handy chart from a 2006 Government Accountability Office report [PDF].

As you can see, airlines were only narrowly profitable in the era of regulation. After regulation, they became exposed to economic forces, making them [...]

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Should airlines be regulated like a public utility?

Yesterday, several outlets reported on former American Airlines CEO Robert Crandall’s speech at the Wings Club (full text here). Crandall, who ran AA during the process of deregulation and made it an industry leader in the post-deregulation era, opposed deregulation in the late 1970s, and his opinions haven’t changed: “We have failed to confront the [...]

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When regulators can’t keep up

The Civil Aeronautics Board, which regulated interstate air fares and routes until its statutory demise from 1978 to 1985, was by the early ’70s a hidebound agency with little interest in serving consumers. It declined to approve new route authorities, frequently offered antitrust immunity to airlines when they colluded on scheduling, and generally opposed any [...]

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Shame as a public policy tool

Today I’m reading Grounded: Frank Lorenzo and the Destruction of Eastern Airlines, an on-the-ground account written in 1990 by reporter Aaron Bernstein about the events surrounding Lorenzo’s ill-fated ownership of Eastern in the ’80s. (FYI: Bernstein takes a clear pro-labor angle that should be noted.) In his discussion of military man, former astronaut, and Eastern [...]

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Quote of the day

Maybe it’s sex appeal, but there’s something about an airline that drives investors crazy.
–Alfred Kahn

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Southwest’s Kelleher gives Lindbergh Lecture

Herb Kelleher, the legendary founder of Southwest Airlines, proponent of low fares, and friend of deregulation, delivered the Charles A. Lindbergh Memorial Lecture tonight at the National Air and Space Museum in Washington, D.C. He reflected on his long career in aviation, on the fundamentals of Southwest, and offered a few [...]

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1978, 2008

[Alfred] Kahn and the [Civil Aeronautics Board] were facing not just one but three airline mergers in the summer of 1978. In addition to the battle for National, Continental Airlines and Western Air Lines had filed for approval to merge, and two local service carriers — North Central Airlines and Southern Airways — also wanted [...]

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Airline regulation revisionists face the wrath of Kahn

Alfred Kahn, the eminent economist and chairman of the Civil Aeronautics Board who oversaw airline deregulation in the 1970s, has published a fascinating new working paper on the AEI Reg-Markets Center site. He addresses the difference between “liberal” and “progressive” views on economic policy and regulation, and he argues that “progressivism” as defined by those [...]

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