Before deregulation, airlines competed mostly on the freshness of their cocktail nuts because the Civil Aeronautics Board dictated their routes and ticket prices. This seemed a little strange, so economists and policy wonks proposed 'marketizing' air travel -- that is, allowing airlines to compete head-on. They thought this would give consumers lower prices, more direct flights, more airlines to choose from, and simpler ticketing and flying requirements. It seemed like a good idea at the time.
But contrary to predictions, deregulation has actually led to fewer direct flights, fewer airlines, less predictable prices, costly restrictions -- and, not incidentally, the financial ruin of nearly every major carrier. Analysts estimate that the airlines have collectively lost more than $50 billion since deregulation began. True, consumers have gotten lower prices on some flights, but only at the cost of astronomical prices on others and a rash of new restrictions and conditions.