Welcome back for part 6 of 6 of the discussion of Enhancing Airline Passenger Protections. Last week we talked about the Three Hour Tarmac Rule. The topic for this week is a final summary of the overall impact of this new legislation on the aviation industry.
Over the last five blog posts, I have attempted to give a perspective on how the new rulemaking helps the airline passenger, but how it also unfairly burdens the airlines. Importantly, I attempted to illustrate how burdened the industry already is by taxes and regulation. Airlines are notorious for going into bankruptcy and have actually lost money since the Airline Deregulation Act of 1978.
We have discussed (1) Baggage Fees, (2) Full Fare Advertising Rule, (3) Oversales and Denied Boarding Compensation requirements, and the (4) Three Hour Tarmac Rule. Most of these regulations make the air travel experience better for consumers, but why does the government single out one specific industry to target in this way? Airlines are specifically targeted by both excessive taxation and burdensome legislation.
The new regulations are just adding to the already burdensome legislation. Aside from the Three Hour Tarmac Rule, the other regulations are unfairly burdening airlines without significant gain to the passenger.
Dr. Kenneth Button did an in depth review of taxation on the aviation industry in his article on The Taxation of Air Transportation. Dr. Button makes the argument that the aviation industry is particularly convenient for the U.S. Treasury because it is a high revenue (not profit) sector with few suppliers and it lacks any large voting block to protect its interests.
Airfare is subject to 17 different government imposed taxes and fees. It is very likely that these taxes and fees will continue to follow the trend of growning in number, amount, and scope.
In conclusion, the new regulation is overly burdensome on an industry that is already in a feeble economic condition. I hope that these posts have been eye opening or at have least offered a different perspective on the new regulations.