THE AIRLINE INDUSTRY is the one upon which virtually every other industry depends to service its customers and grow its businesses. Likewise, its fortunes are highly leveraged visa-vis stakeholders such as consumers, workers, investors, and taxpayers, as well as adjacent interests such as the airplane manufacturing, airport, rental car, ride-hailing, hotel, and restaurant industries. The COVID-19 catastrophe has elevated the visibility of the importance of this infrastructure and has created a rare opportunity for transformational reform to address decades of mounting problems.
There never has been an airline industry collapse on the scale we are witnessing in the wake of the current public-health crisis. It has laid bare many outdated, public policy critical assumptions and concepts, such as the market will solve all problems. The pandemic will plague the industry for years--and the airlines' unsustainable model, if not replaced, will require significant decades-long sacrifices by taxpayers, labor, consumers, and other stakeholders, while causing tremendous collateral damage to travel and tourism industry jobs.
The crisis also amplifies the reality that, in recent years, the airline industry paradigm increasingly has failed to solve mounting problems. Instead, it is helping create them. In commercial aviation's early days, people became more connected; cultures became better understood; and diplomacy and commerce were facilitated more efficiently.
Furthermore, U.S.-led deregulation of airline industry markets around the world democratized air travel, led to greatly expanded job opportunities, and drove unprecedented economic growth. Moreover, while economists tend to agree on little, virtually all of them do concur that some markets work well, some not so well, and some not at all. I am certain that there would be near-universal agreement that the U.S. airline industry falls somewhere between "not so well" and "not at all."
For instance, ask flight attendants if they are satisfied with management's attention to cabin air quality, or ask communities that have lost air service because of industry consolidation, or airports that need passenger facility charges for upgrades, or consumers asked to pay $200 change fees.
Moreover, all of those complaints predate the coronavirus. Some observers argue COVID-19 is a black swan occurrence--an event of catastrophic consequences that could not be predicted. However, in addition to numerous scientists...