Monopoly of Government Power in the airline industry

Prior to taking the helm of the Rio Grande Foundation, I did a fair amount of work in airline taxation and regulation. A recent article in Barron’s, a national financial and investing publication, caught my attention and drew a response. See that response which was published in the September 2, 2013 issue.

Thomas Donlan is on-target in critiquing the (mis) use of anti-trust by the Obama Administration in the US Airways/American Airlines merger, but he only scratches the surface in terms of the heavy burden the federal government places on airlines and their customers.

For starters, the current rules in the U.S. state that airlines must be majority-owned by Americans (50 percent plus one) and that Americans must own 75 percent of the voting shares in the company, hinder competition and reduce the ability of airlines to access capital in the international marketplace.

The TSA’s stranglehold on airport screening also must be ended. The use of private contractors should be expanded beyond a few pilot programs immediately. According to the GAO, if the nation’s top 35 airports switched to private contractors, taxpayers would save $1 billion over five years.

The FAA made news earlier this year when the Obama Administration used the sequestration budget “cuts” as an excuse to force Americans to face increased delays due to air traffic control. There is absolutely no reason for the federal government to manage air traffic control. This too should be privatized as has been done in Canada and dozens of nations around the globe to great effect in terms of both costs and improved technology.

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