Amid growing calls to re-regulate the airline industry, the Biden administration’s Department of Transportation (DOT) has announced a final rule that would ban airline junk fees and deliver automatic refunds to customers impacted by flight cancelations. This rule is unnecessary and could undermine the important progress the industry has made since deregulation, by subjecting it to new, top-down regulations that are certain to produce unintended consequences for airlines and consumers alike. Most importantly, it is based on bad information and reveals an ignorance of history. It’s time to set the record straight. 

The Biden administration has stated that the rulemaking is needed to “lower costs for consumers.” However, costs have already been declining for consumers for some time. Thanks to the Airline Deregulation Act of 1978, the now-defunct Civil Aeronautics Board no longer gets to dictate the routes airlines must fly or the prices they must charge. This has allowed airline competition to blossom, driving down ticket prices, as airlines are forced to compete for customers. According to the Bureau of Labor Statistics, between 2014 and 2023 alone, real airline prices declined by 32.53 percent, equal to a $90.09 drop in 2014 fare prices. Researchers Robert Crandall and Jerry Ellig have reached similar conclusions, estimating that airline deregulation saves consumers $19.4 billion per year.

These cost savings mean that flying is no longer a luxury reserved for the wealthiest members of society, but a viable form of transportation for everyone. As recently as 1971, just 49 percent of Americans had ever flown commercially. However, by 2022, 87 percent of Americans had done so, including 80 percent with a household income below $50,000.

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Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal. This piece is exclusive to Broadband Breakfast.