Washington Monthly: How deregulation is killing air system, taking Memphis with it

An article in the March-April issue of The Washington Monthly called "Terminal Sickness" blames the 30-plus-year policy of airline deregulation for not only increasingly limited and expensive air service in the American heartland but also potentially disastrous further economic consequences for cities such as "Cincinnati, Memphis, and St. Louis."

Delta CEO Richard Anderson recently defended his airline's cutbacks in daily departures from Memphis International Airport since its merger with Northwest, but Washington Monthly writers Phillip Longman and Lina Khan point out specific recent instances in which Memphis' air-service situation has harmed business here (links are my additions):

When (Memphis International) was designated a hub by Northwest in 1986, the airport undertook record-breaking expansion projects to house the airline and its regional carrier, Northwest Airlink. As in other cities, lack of competition at the airport led to record-high airfares. These high fares are still in place, but they haven't been enough to preserve service. Delta's acquisition of Northwest allowed the executives of that Atlanta- based airline to diminish the airport's hub status. In March of 2011 the post-merger airline announced that it would cut 25 percent of its flights from the city. This loss of connectivity affects Memphis in ways both big and small. The Folk Alliance music conference, held annually in downtown Memphis, recently announced that it would move to Kansas City starting in 2014, due in part to airport hassles. The Church of God in Christ, too, recently decided to move its yearly convention out of Memphis, breaking 100 years of tradition. When Mayor A. C. Wharton visited church leaders to lure their 50,000 convention attendants back to the Bluff City, he learned of the material culprit that had pushed the spiritual gathering away: high airfares.


Apparently, the writer of this post hasn't studied history, particularly the history of FedEx and the airline industry.

What the writer apparently does not know is that FedEx would not exist today without airline deregulation and that Fred Smith was one of the prime drivers of airline deregulation.

Prior to deregulating the airlines, a company like FedEx was restricted to flying small jets, which was not economical and caused the company to lose money for several years. It was not until they were allowed to fly Boeing 727s and Douglas DC-10s that the cost per package of air transport made it possible to turn a profit. Without airline deregulation, there would be no FedEx and no employment for all of the FedEx employees in Memphis and around the world.

Airline deregulation created competition. Competition is why Memphis had a hub in the first place. It is the increasing lack of competition in the airline business today, exemplified by the merger of Northwest and Delta, that has created an environment where Delta feels that they can and should abandon Memphis.

You can bet that if Northwest Airlines was still a separate entity, we would not be having these discussions.

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