Airline Industry - United States

Background.
Since the dawn of aviation, governments and private enterprise have wrestled over who should dominate the skies. In the beginning, government regulations prevented companies from raising or lowering prices to ensure the viability of the airlines and their services to the general public. However nearly forty years ago, the government stepped away from this approach in favor of a more market-oriented system. American airlines were now allowed to adjust prices in accordance with supply and demand. Almost immediately new, discount airlines sprouted up, people across the country who had never been able to fly before now had new opportunities to travel within reach, and other airlines consolidated or disappeared costing the industry thousands of jobs. For nearly four decades this situation tentatively continued with new airlines popping up or failing as the market demanded.

The Problem.
However in recent years things have changed. Ticket prices have risen as the price of oil and unionized labor drive up costs. The attacks of September 11th shattered much confidence in the industry and a slew of the once invincible carriers have declared bankruptcy and/or sought government bailouts. The American airline industry, however, seems to be the most fraught with problems. Short flights around Europe and East Asia routinely run at a fraction of the cost of their American counterparts and while airlines like Qatar Airways and Singapore Airways offer brand new A-380's (Airbus's luxurious new flagship), Northwest Airlines has started charging for light snacks and American Airlines has started charging for checking a bag. Expecting delays at American airports have now become the norm rather than the exception. Despite the obvious, previously mentioned rise in the cost of inputs, why have American carriers suffered so acutely? The industry is quick to blame unions and spiking fuel costs, however Japanese, South Korean, and many European carriers face identical issues and have not knocked on the government's door asking for free money in the name of keeping jobs.

One Solution.
One fairly obvious solution is to repeat the successes of the past. Deregulation increased competition and efficiency and reduced costs before, so it very well could work now too. Despite the advances of the past, American airports are still closed entirely to foreign carriers for domestic flights, even though many American carriers operate outside of the US. Opening the US market to more carriers would bring new companies into the US to employ American workers, share the cost of rental spaces at airports, and, most importantly, reduce prices for American travelers. But this is only the first step. Because of the reduced costs and prices that deregulation brought in the past, more and more flights are being offered without a matched capacity at the airports. Wait-times on runways mean paying more personnel to wait on passengers when they could otherwise be in the air or off the clock. Increasing the number of air traffic controllers and the number of runways available at large airports would increase demand by enticing passengers with greater efficiency and would reduce costs for airlines by reducing payroll costs (flight attendants are only paid for the time they are on board) and fuel consumption (keeping ventilation and lights on require energy, even if the plane is stopped at the gate). These suggestions are just a start. Obviously increasing fuel efficiency in aircrafts, keeping flights full, and reasonable concessions (on both sides) with unions would also help. However these three should send the industry in the right direction immediately.


What should be done?
These suggestions are clearly not the only possibilities. What should airline executives, the general public, and governments do to bring the industry out of its funk? Or is the industry simply doomed at the death of cheap oil and labor?