In an editorial Tuesday, The USA TODAY attacked the airline industry for what it said “in another context [would be known] as a protection racket.” According to the editorial, airlines are overcharging customers through various fees – most egregious, apparently, is the common $25 checked-bag fee – and putting customers “in a state of high anxiety” to justify this practice.
The editorial is worth reading for two reasons: first, it completely ignores the basic economic concept called “supply and demand.” After all, airline customers can drive a vehicle or take a bus just about anywhere; nobody has to drive, especially domestically. Second, and more importantly, it joins Senator Mary Landrieu’s (D-LA) desire to use big government to micromanage the airline industry. According to USA TODAY, the airlines “invite… government intervention, such as a Senate bill that would mandate one free checked bag.”
The Senate bill referenced is one of two introduced by Landrieu last year in response to growing baggage fees. According to Landrieu last November, via CNN:
“’Many airlines consider checking a bag not to be a right, but a privilege — and one with a hefty fee attached,’ said Landrieu. She said her first legislative proposal ‘will guarantee passengers one checked bag without the financial burden of paying a fee, or the headache of trying to fit everything into a carry-on’.”
The second, she added, would at least make sure taxpayers are made whole for the stresses more congestion at security places on the system.
Now, it could be argued that the second bill, which would raise taxes on the airlines that charge fees for baggage, has some merit – according to the same CNN article, “[it] would raise the $260 million that the Transportation Security Administration estimates it needs to handle the extra carry-on bags going through the screening process.” While I support eliminating the TSA entirely, it could be argued that incentivizing airline passengers to fit more into carry-on luggage is an added burden on the already-useless TSA bureaucracy, and thus we need to spend even more money keeping it in place.
However, the first bill’s necessity has no foundation. Flying on an airplane is a privilege – one provided by the airlines themselves. They give customers the ability to fly for a price, and they dictate that price, even baggage fees, unless the market tells them to change. In the airline industry, this market shift was capitalized on by Jet Blue and Southwest, and the USA TODAY editorial notes they are very popular for it.
Honestly, this sounds a lot like the silly television commercial regulation legislation made famous by Rep. Jane Eshoo (D-CA) that eventually became law. Yes, loud commercials are bothersome. Do they require congressional attention? Absolutely not, especially since changes were already being made.
Similarly, airline fees are expensive. According to a USA Today chart, total annual fees have gone from $2.5 billion in 2007 to $22.6 billion in 2011, and this CNN chart shows that the revenue from baggage fees alone has gone up approximately seven-fold to nearly $3.5 billion. However, changes are already being made, this time by proactive customers as they head to Southwest and Jet Blue.
We the people may not be brilliant – we voted for Obama in 2008, after all – but we don’t need Congress holding our hand when it comes to checked baggage… especially a Congress that created the TSA and invasive pat-downs. Let market mechanisms work.
