To Regulate or Not: That is the Question

In some ways the discussion over whether an industry should be re-regulated is an academic discussion. With over 30 years of operating as a deregulated aviation industry, it would be a herculean task to change directions and re-regulate an industry without a significant industrial event or obvious disadvantageous economic trend which with to react. Not to mention, the political will and functions would have to be present, as well as the supporting government resources available in the budget, which just is not the case at this time. In short, the airplane hangar is open and the planes have taken off; re-regulation is not only a figment of someone’s imagination or dream, but also an unwise economic direction for the industry. For this paper’s purpose, regulation is defined as the directing of consumer pricing, route systems, entry into a market by a producer, mergers between producers, and subsidies for service. Aviation safety, licensing, equipment policies and air space regulation are not deregulated and not in the scope of this discussion. In fact, most of the discussion of re-regulating the aviation industry focuses on airfares and route competition.