Friday, September 14, 2007

Public Transportation

Private enterprise is famous for delivering a reliable consumer experience.

Nominally, commercial air travel in the United States is a private enterprise.

So why does flying commercial feel more like public transportation than a consumer experience?

The answer to that question certainly begins with the penitentiary-like lines and searches at the TSA security checkpoint. It continues with airlines that are allowed to operate while officially bankrupt. It finishes with an increasing number of mechanical failures, schedule delays, missed connections, cancelled flights and last minute gate changes. No wonder everyone, crew and passengers alike, doesn't look as happy as the people in the advertisements.

In reality, air travel has never been a fully deregulated business. It has always been insulated from a fully competitive market by one form or another of government protection, such as regulated fares or government bailouts for busted airlines. As Warren Buffett once famously quipped, commercial aviation is such a bad business that had there been a self-respecting capitalist at Kitty Hawk, he would have done the right thing and shot down the Wright brothers' airplane.

As long as the airlines can get away with what they offer today, they are unlikely to offer anything better.

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