6 ms·

>You see this in most heavily regulated markets. Except airlines were heavily deregulated in 1978. In my mind it's also "clear why we have reached this point",

by nanny 8y ago

>You see this in most heavily regulated markets. Except airlines were heavily deregulated in 1978. In my mind it's also "clear why we have reached this point", except that I've come to the opposite conclusion that you have.

pdonis 8y ago
> airlines were heavily deregulated in 1978. With regard to the routes they could fly and the prices they could charge, yes. But they were never de-regulated with regard to the safety requirements they had to meet or the qualifications their pilots and crew and maintenance workers have to have. Those regulations have, if anything, gotten more stringent over time. And those regulations pose a huge barrier to entry for new competitors, and favor large airlines over small ones because a large airline can more easily absorb the costs of compliance.
- thatfrenchguy 8y ago
  Yes but none of us want to die.
  - pdonis 8y ago
    That's true. I'm not saying the safety regulations are a bad idea. I'm just saying that they have the side effect of giving the advantage to large airlines and posing a barrier to entry for new competitors. (And that, since they are indeed regulations and have gotten more stringent over time, it is a mistake to think of the airline industry as being "deregulated" in the sense of the term "regulation" that is being used in this discussion.)
  - conanbatt 8y ago
    Depends on the price.
  - AnthonyMouse 8y ago
    > Yes but none of us want to die. This is the problematic false dichotomy. If you give someone a choice between "this specific set of onerous, expensive, competition-destroying regulations" or "you will be killed", they make the obvious choice. But those aren't the only options. Existing regulations are poorly optimized. It would be possible to save the same number of lives -- more lives -- by doing more work to improve the benefit:burden ratio of regulations. The problem is that people aren't interested in this. It's detail-oriented work that doesn't make for good sound bites, so the beneficiaries (the general public) aren't organized enough to know how to ask for it, and the organized incumbents don't want it because it would result in a larger number of viable competitors. And it's too easy for incumbents to make the sound bites go the other way, by pretending that not spending a billion dollars to save one life is irresponsible, even though the same billion dollars could save more than a thousand lives if saved here and used beneficially somewhere else.
    - nradov 8y ago
      Could you give us an example of a specific FAA or NTSB regulation which has a suboptimal benefit:burden ratio?
      - AnthonyMouse 8y ago
        > Could you give us an example of a specific FAA or NTSB regulation which has a suboptimal benefit:burden ratio? Sure. The air traffic control system is 20th century technology that has air traffic controllers doing things manually that could be done by computers. A better automated system would have the same or better safety while requiring significantly less labor.
        nradov 8y ago
        The FAA has been actively working to modernise the air traffic control system for decades. It's a hard problem. I fail to see how that addresses the point?
        AnthonyMouse 8y ago
        The point is that it's a hard problem whose solution yields large returns, but we're expending resources to solve it at a rate that takes decades to produce the solution.
  - thucydidesofusa 8y ago
    Very true. But we also don't want to overpay. Heck, no one wants to die but some people smoke cigarettes. Despite what people identify as their preference, their behavior reveals what really matters to them. In freer markets, people have the option to buy the safety that's appropriate for them. A person who's concerned about car safety may buy a Volvo and someone who'd rather have the money can buy a 90s Corolla. The analogy would be that regulations prohibit airlines from offering a lower safety at cost levels that consumers may find palatable. If airliners became an order of magnitude less safe, they'd still be on-par with the safety offered by other legal modes of transportation. A better analogy might be this - overly zealous regulations probably make it more expensive to achieve a given level of safety. Engine inspections are a great example - they have to be done on a regular schedule despite operating conditions and monitoring. These regulations disincentivize jet engine manufacturers from developing and deploying on board monitoring equipment that could flag engines for inspection when they need it and avoid unnecessary inspections.
  - aidenn0 8y ago
    Driving is far less safe than flying, but people choose to drive all the time.
    - ekianjo 8y ago
      Yes, and even after 9/11 there is clear data showing that people stopped flying en masse and took the wheel instead, resulting in increased overall death count. https://www.theguardian.com/world/2011/sep/05/september-11-road-deaths https://www.theguardian.com/world/2011/sep/05/september-11-r... > However, Professor Gerd Gigerenzer, a German academic specialising in risk, has estimated that an extra 1,595 Americans died in car accidents in the year after the attacks – indirect victims of the tragedy.
    - maxxxxx 8y ago
      With driving people think they are in control and that safety is determined by their own skills. When you sit in a plane you are at the mercy of the airline and the pilot. I would more compare it to buying a car. And there are a lot of safety regulations on cars. When you buy a car you know that the steering or brakes won't fail randomly.
- repsilat 8y ago
  More to the point, foreign carriers are literally not allowed to fly US domestic routes. Plenty of international competition would love to (and foreign governments might even subsidise those flights!) but trade protection keeps them out.
  - nradov 8y ago
    It's more than just trade protection, it's a matter of national security. US airlines are legally subject to having their aircraft commandeered to transport military personnel in wartime. It wouldn't be feasible to enforce that requirement on foreign airlines.
    - maxxxxx 8y ago
      Why not?
    - danaris 8y ago
      ...I don't see that as being nearly as big of a (potential) national security risk as, say, a plane from a country with much lower national standards being flown into a major hub and either accidentally or maliciously crashing into populated areas. I'm honestly not sure how "we can't legally commandeer the plane to transport military personnel in wartime" qualifies as a national security issue. Seems more like a logistical issue in that unlikely event.
      - nradov 8y ago
        Logistical issues are national security issues. It's an insurance policy against the possibility of another large-scale war involving immediate full mobilization. Fortunately we haven't really had a war like that since WWII but the risk is still there. Safety and security issues are handled separately. Some foreign airlines are banned from landing at any US airport because they're not trusted.
        heavenlyblue 8y ago
        What stops you, in the event of a war, to only use the planes from domestic carriers for military purposes?
- dv_dt 8y ago
  They've become more stringent over time because there are more flights now, and had they not become more stringent, then we would have daily crashes and fewer people would be willing to fly.
  - ekianjo 8y ago
    > and had they not become more stringent, then we would have daily crashes and fewer people would be willing to fly. Not sure you can make such a claim. There are other industries where standards and safety practices improve over time without the need of strong regulatory leadership. Case in point: occupational injuries have been decreasing over time across the board: https://www.bls.gov/news.release/archives/osh_11082018.pdf https://www.bls.gov/news.release/archives/osh_11082018.pdf
    - nradov 8y ago
      Occupational injuries have been decreasing over time largely due to deindustrialization. There just aren't as many people working in factories and mines any more.
      - majewsky 8y ago
        Also, OSHA was enacted in 1970.
      - maxxxxx 8y ago
        And the people working in factories and mines are protected by regulation. The owners didn't improve safety voluntarily.
        JoeAltmaier 8y ago
        Which are routinely, famously flaunted by both management and labor in mining and manufacturing to increase output and thereby pay/profit. I'd favor mechanization over 'rational human' for sure.
    - maxxxxx 8y ago
- Ar-Curunir 8y ago
  And more safety is a bad thing... how? Should the airline industry become more like the software eng industry, which has had such great success in producing solid and safe products?
  - ekianjo 8y ago
    Safety comes at a cost. If you want to makes planes ultimately safe, you would not allow them to fly, period. Just like NASA has now an objective of "safe flights" and basically does not send humans in space anymore because they can't guarantee zero fatality. Safety is not a binary variable: it's a trade-off vs economical factors and the cost of each ticket. Since some people have to fly anyway, this means decreased spending in other areas of the economy.
    - nradov 8y ago
      But planes are ultimately safe, to the extent that the major US airlines often go a whole year with zero passenger deaths. And this safety doesn't even cost more; it's actually cheaper than the alternative when you net out all the costs.
      - mattbessey 8y ago
        > this safety doesn't even cost more; it's actually cheaper than the alternative when you net out all the costs. You can't just drop an argument destroying bomb like this with no citation
- deleted 8y ago
  [deleted]
- edanm 8y ago
  Also, there is no real market for airline tickets, because you can't, as a consumer, decide to resell them. So their prices are often set in very bizarre ways (leading to prices jumping around minute to minute by crazy algorithms.) I think a big part of this situation is for security purposes.
  - selestify 8y ago
    Why would preventing reselling of airline tickets promote security?
    - edanm 8y ago
      I think the idea is that tickets are tied to a real person's identity (via their passport number), you can't sell to somebody else, who might be a threat, because the airline won't let them on. Compare to, say, a car, where no one verifies that you aren't selling your car to someone without a license (or that intends to commit a terror attack, say).
- apexalpha 8y ago
  >And those regulations pose a huge barrier to entry for new competitors, and favor large airlines over small ones because a large airline can more easily absorb the costs of compliance. Have you seen the EU airline market? It's _insanely_ competitive with dozens of airlines flying everywhere, all with rigorous safety standards.
- mbrodersen 8y ago
  So are you suggesting that the airlines should be allowed to use pilots that are less qualified to fly, and maintenance crew that is less qualified to maintain aircraft? Seriously?
afjl 8y ago
In my opinion, both lead to monopolies and oligopolies. Ekianjo is right, in the sense that entities with lots of capital will become rent-seeking entities in over-regulated/mis-regulated markets because of very high barriers to entry. Examples include ISP's and insurance markets. You are also right, in the sense that entities will rush to control a heavily de-regulated market. To that end, companies with lots of capital can afford to outspend or acquire their undersized competition. Examples include Air-transit post-1978 and the Internet 2.0. There isn't one single legislation that led us here and there is no one-size-fits-all solution that can solve each monopoly. We have to evaluate each industry and each market on its own to determine how the state would break the oligopoly.
- larl 8y ago
  But that requires political will, and with current political funding and party platforms, that's basically a non-starter.
  - ekianjo 8y ago
    That's also the problem of our current political systems which favor party lines instead of individual thinking. It's very inefficient to drive reforms.

by nanny 8y ago

pdonis 8y ago

> airlines were heavily deregulated in 1978. With regard to the routes they could fly and the prices they could charge, yes. But they were never de-regulated with regard to the safety requirements they had to meet or the qualifications their pilots and crew and maintenance workers have to have. Those regulations have, if anything, gotten more stringent over time. And those regulations pose a huge barrier to entry for new competitors, and favor large airlines over small ones because a large airline can more easily absorb the costs of compliance.

thatfrenchguy 8y ago
Yes but none of us want to die.
- pdonis 8y ago
  That's true. I'm not saying the safety regulations are a bad idea. I'm just saying that they have the side effect of giving the advantage to large airlines and posing a barrier to entry for new competitors. (And that, since they are indeed regulations and have gotten more stringent over time, it is a mistake to think of the airline industry as being "deregulated" in the sense of the term "regulation" that is being used in this discussion.)
- conanbatt 8y ago
  Depends on the price.
- AnthonyMouse 8y ago
  > Yes but none of us want to die. This is the problematic false dichotomy. If you give someone a choice between "this specific set of onerous, expensive, competition-destroying regulations" or "you will be killed", they make the obvious choice. But those aren't the only options. Existing regulations are poorly optimized. It would be possible to save the same number of lives -- more lives -- by doing more work to improve the benefit:burden ratio of regulations. The problem is that people aren't interested in this. It's detail-oriented work that doesn't make for good sound bites, so the beneficiaries (the general public) aren't organized enough to know how to ask for it, and the organized incumbents don't want it because it would result in a larger number of viable competitors. And it's too easy for incumbents to make the sound bites go the other way, by pretending that not spending a billion dollars to save one life is irresponsible, even though the same billion dollars could save more than a thousand lives if saved here and used beneficially somewhere else.
  - nradov 8y ago
    Could you give us an example of a specific FAA or NTSB regulation which has a suboptimal benefit:burden ratio?
    - AnthonyMouse 8y ago
      > Could you give us an example of a specific FAA or NTSB regulation which has a suboptimal benefit:burden ratio? Sure. The air traffic control system is 20th century technology that has air traffic controllers doing things manually that could be done by computers. A better automated system would have the same or better safety while requiring significantly less labor.
      - nradov 8y ago
        The FAA has been actively working to modernise the air traffic control system for decades. It's a hard problem. I fail to see how that addresses the point?
        AnthonyMouse 8y ago
        The point is that it's a hard problem whose solution yields large returns, but we're expending resources to solve it at a rate that takes decades to produce the solution.
- thucydidesofusa 8y ago
  Very true. But we also don't want to overpay. Heck, no one wants to die but some people smoke cigarettes. Despite what people identify as their preference, their behavior reveals what really matters to them. In freer markets, people have the option to buy the safety that's appropriate for them. A person who's concerned about car safety may buy a Volvo and someone who'd rather have the money can buy a 90s Corolla. The analogy would be that regulations prohibit airlines from offering a lower safety at cost levels that consumers may find palatable. If airliners became an order of magnitude less safe, they'd still be on-par with the safety offered by other legal modes of transportation. A better analogy might be this - overly zealous regulations probably make it more expensive to achieve a given level of safety. Engine inspections are a great example - they have to be done on a regular schedule despite operating conditions and monitoring. These regulations disincentivize jet engine manufacturers from developing and deploying on board monitoring equipment that could flag engines for inspection when they need it and avoid unnecessary inspections.
- aidenn0 8y ago
  Driving is far less safe than flying, but people choose to drive all the time.
  - ekianjo 8y ago
    Yes, and even after 9/11 there is clear data showing that people stopped flying en masse and took the wheel instead, resulting in increased overall death count. https://www.theguardian.com/world/2011/sep/05/september-11-road-deaths https://www.theguardian.com/world/2011/sep/05/september-11-r... > However, Professor Gerd Gigerenzer, a German academic specialising in risk, has estimated that an extra 1,595 Americans died in car accidents in the year after the attacks – indirect victims of the tragedy.
  - maxxxxx 8y ago
    With driving people think they are in control and that safety is determined by their own skills. When you sit in a plane you are at the mercy of the airline and the pilot. I would more compare it to buying a car. And there are a lot of safety regulations on cars. When you buy a car you know that the steering or brakes won't fail randomly.
repsilat 8y ago
More to the point, foreign carriers are literally not allowed to fly US domestic routes. Plenty of international competition would love to (and foreign governments might even subsidise those flights!) but trade protection keeps them out.
- nradov 8y ago
  It's more than just trade protection, it's a matter of national security. US airlines are legally subject to having their aircraft commandeered to transport military personnel in wartime. It wouldn't be feasible to enforce that requirement on foreign airlines.
  - maxxxxx 8y ago
    Why not?
  - danaris 8y ago
    ...I don't see that as being nearly as big of a (potential) national security risk as, say, a plane from a country with much lower national standards being flown into a major hub and either accidentally or maliciously crashing into populated areas. I'm honestly not sure how "we can't legally commandeer the plane to transport military personnel in wartime" qualifies as a national security issue. Seems more like a logistical issue in that unlikely event.
    - nradov 8y ago
      Logistical issues are national security issues. It's an insurance policy against the possibility of another large-scale war involving immediate full mobilization. Fortunately we haven't really had a war like that since WWII but the risk is still there. Safety and security issues are handled separately. Some foreign airlines are banned from landing at any US airport because they're not trusted.
      - heavenlyblue 8y ago
        What stops you, in the event of a war, to only use the planes from domestic carriers for military purposes?
dv_dt 8y ago
They've become more stringent over time because there are more flights now, and had they not become more stringent, then we would have daily crashes and fewer people would be willing to fly.
- ekianjo 8y ago
  > and had they not become more stringent, then we would have daily crashes and fewer people would be willing to fly. Not sure you can make such a claim. There are other industries where standards and safety practices improve over time without the need of strong regulatory leadership. Case in point: occupational injuries have been decreasing over time across the board: https://www.bls.gov/news.release/archives/osh_11082018.pdf https://www.bls.gov/news.release/archives/osh_11082018.pdf
  - nradov 8y ago
    Occupational injuries have been decreasing over time largely due to deindustrialization. There just aren't as many people working in factories and mines any more.
    - majewsky 8y ago
      Also, OSHA was enacted in 1970.
    - maxxxxx 8y ago
      And the people working in factories and mines are protected by regulation. The owners didn't improve safety voluntarily.
      - JoeAltmaier 8y ago
        Which are routinely, famously flaunted by both management and labor in mining and manufacturing to increase output and thereby pay/profit. I'd favor mechanization over 'rational human' for sure.
  - maxxxxx 8y ago
Ar-Curunir 8y ago
And more safety is a bad thing... how? Should the airline industry become more like the software eng industry, which has had such great success in producing solid and safe products?
- ekianjo 8y ago
  Safety comes at a cost. If you want to makes planes ultimately safe, you would not allow them to fly, period. Just like NASA has now an objective of "safe flights" and basically does not send humans in space anymore because they can't guarantee zero fatality. Safety is not a binary variable: it's a trade-off vs economical factors and the cost of each ticket. Since some people have to fly anyway, this means decreased spending in other areas of the economy.
  - nradov 8y ago
    But planes are ultimately safe, to the extent that the major US airlines often go a whole year with zero passenger deaths. And this safety doesn't even cost more; it's actually cheaper than the alternative when you net out all the costs.
    - mattbessey 8y ago
      > this safety doesn't even cost more; it's actually cheaper than the alternative when you net out all the costs. You can't just drop an argument destroying bomb like this with no citation
deleted 8y ago
[deleted]
edanm 8y ago
Also, there is no real market for airline tickets, because you can't, as a consumer, decide to resell them. So their prices are often set in very bizarre ways (leading to prices jumping around minute to minute by crazy algorithms.) I think a big part of this situation is for security purposes.
- selestify 8y ago
  Why would preventing reselling of airline tickets promote security?
  - edanm 8y ago
    I think the idea is that tickets are tied to a real person's identity (via their passport number), you can't sell to somebody else, who might be a threat, because the airline won't let them on. Compare to, say, a car, where no one verifies that you aren't selling your car to someone without a license (or that intends to commit a terror attack, say).
apexalpha 8y ago
>And those regulations pose a huge barrier to entry for new competitors, and favor large airlines over small ones because a large airline can more easily absorb the costs of compliance. Have you seen the EU airline market? It's _insanely_ competitive with dozens of airlines flying everywhere, all with rigorous safety standards.
mbrodersen 8y ago
So are you suggesting that the airlines should be allowed to use pilots that are less qualified to fly, and maintenance crew that is less qualified to maintain aircraft? Seriously?

afjl 8y ago

In my opinion, both lead to monopolies and oligopolies. Ekianjo is right, in the sense that entities with lots of capital will become rent-seeking entities in over-regulated/mis-regulated markets because of very high barriers to entry. Examples include ISP's and insurance markets. You are also right, in the sense that entities will rush to control a heavily de-regulated market. To that end, companies with lots of capital can afford to outspend or acquire their undersized competition. Examples include Air-transit post-1978 and the Internet 2.0. There isn't one single legislation that led us here and there is no one-size-fits-all solution that can solve each monopoly. We have to evaluate each industry and each market on its own to determine how the state would break the oligopoly.

larl 8y ago
But that requires political will, and with current political funding and party platforms, that's basically a non-starter.
- ekianjo 8y ago
  That's also the problem of our current political systems which favor party lines instead of individual thinking. It's very inefficient to drive reforms.