Most Americans agree that modern air travel under the Big Three Airlines – Delta, United, and American, is far from enjoyable these days. Assaulted customers, families expelled from their seats, canceled flights; the headlines are unforgiving, and the experience itself is often a nightmare.
Can anything be done to get these airlines back on track? There are some actions that policymakers, and even the Big Three themselves, can take to enhance competition, put customers in the driver’s seat and allow the industry to thrive.
Consider, as an example, the issue of Open Skies agreements. The United States currently has Open Skies agreements with more than 120 countries and economic unions. These agreements govern air travel on international flights between the United States and its partner countries and economic unions, such as the European Union. At the same time, the respective governments are kept out of the business of setting routes, flights, and fares. On these routes, airlines are forced to compete for both price and service.
Passengers are obviously the biggest beneficiaries of these policies, but we’d be remiss not to acknowledge the potential impact on the United States tourism industry, which is lagging in global growth and in desperate need of the dollars that international travelers spend. Open Skies agreements give airline customers options that they might not have enjoyed otherwise. Unlike the take-it-or-leave-it, do-what-we-say, drag-you-down-the-aisle approach that is so common in the domestic airline industry, many of these Open Skies flights offer ample leg room, meals that don’t cost extra, and (believe it or not), good old-fashioned customer service.
They’re also cheaper. Economists estimate that flights regulated under Open Skies agreements have seen fares decline about thirty-two percent, leaving nearly $4 billion in travelers’ pockets. These dollars saved become dollars spent – on food, lodging, experiences, and souvenirs, helping to fuel our nation’s economy.
To put it simply, Open Skies is a no-brainer. So, why do the Big Three Airlines have such a problem with these agreements? Subsidies, tax breaks, bailouts, and other favorable regulations are baked into the cake of how the airlines operate domestically. On their home turf, they can still engage in most of these behaviors. Open Skies agreements keep international markets free and open, making it much more difficult for the airlines to participate in these crony capitalist affairs abroad.
According to the Wall Street Journal, Delta, United, and American have spent a cumulative $50 million lobbying against Open Skies agreements in just the past three years. It seems to me that the airlines could do a lot of good if they stopped pushing for anti-competitive policies, and instead invested in safety, efficiency, and customer experience.
Let’s hope that some key government officials continue pushing back against these protectionist and anti-consumer movements spurred by the Big Three airlines.
Matt Cordio is co-founder and president of Skills Pipeline, a technology talent solutions company.