Ganesh Sitaraman flies a lot. He grew up between several states and now works between several cities, anchored by his post at Vanderbilt Law School. He was a senior adviser to U.S. Sen. Elizabeth Warren during her 2020 presidential run, and last year, he was tapped to serve on the Department of Transportation’s Commercial Space Transportation Advisory Committee. He spoke with the Scene about his new book Why Flying Is Miserable: And How to Fix It, which lays out the economic and political case for a major shift in flying.
This interview has been edited for clarity and brevity.
You go pretty deep into the airline industry in this book. It’s a wonky argument about something pretty complicated, with a long history. Where did that interest come from?
A few years ago some colleagues and I decided to write a textbook on networks, platforms and utilities law. That involves laws around transportation, energy, telecommunications, banking, and we add tech platforms, which are relatively new. For hundreds of years, these industries were regulated under special rules that didn't exist for businesses like coffee shops or mug manufacturers. Everyone understood that these were different — they were basic infrastructure. They provided public services that were essential to lots of other types of commerce and communication. They also had special economic characteristics that made them tend toward monopoly or oligopoly. Competition was not usually going to work very well in these industries.
Starting in about the 1970s, this area of law collapsed. It got attacked by economists. There was a series of deregulatory initiatives across all of these sectors. The whole field in law schools collapsed. The policy tools were lost to the public imagination. We set out to write the first new textbook in this field in a quarter-century and the first really since the 1970s that has some perspective on regulation and deregulation.
As I was working on the chapter on airlines, I was digging into the research and the story was just amazing. There's interesting personalities, there's this wild history of what happens with deregulation, and a lot of people engage with the airline industry, and a lot of people complain about it. People are constantly irritated about delays and cancellations and seats getting smaller and all these added fees and the complexity of point systems — all of the different things that make flying frustrating and miserable. An industry that's going through a boom-and-bust cycle, where they have to be bailed out after 9/11 and have a big support program after COVID, where there's all these bankruptcies and mergers, where there's very little competition, is not a stable, healthy industry that can provide this basic service necessary for communities.
Ganesh Sitaraman
Air travel wasn’t always such a stressful or uncomfortable experience, which I learned reading this. There was a time when companies served the whole country, even smaller cities, and actually competed on service, offering perks like luxury dinners and live in-flight entertainment. How did things get so bad?
Shorthanded board meets during banner year for BNA
We had a basically stable, reliable system from the 1930s to the 1970s. Policymakers in Washington wanted an airline system that would serve a lot of places around the country, including small cities.
They wanted to build up the airline industry. They didn't want bankruptcies. They didn't want to have to subsidize airlines constantly. They wanted stable and reliable transportation infrastructure and understood air travel explicitly as a utility. They built a regulatory system on other utility frameworks that existed, and had for decades. This system worked pretty well.
Regulators would allocate routes to serve the whole country. Some airlines would get both high-volume, high-profit routes, and some really low-volume routes that are not profitable but that, as a country, we really wanted to serve. Internally, they would balance out. Regulators set prices to make sure airlines didn't go under, but also that the prices were fair for consumers. Prices went down pretty steadily across this time period. As you mentioned, there was real competition for service. It was really a race to the top for service, because prices were controlled, and airlines were guaranteed a profit. It was a set profit, but they were guaranteed that much. If they wanted to merge, they had to go through the regulatory process, the regulators had to approve. So actually, during that period of regulation, we actually had more competition and less concentration than we have now.
Why did Congress deregulate the market?
Advocates for deregulation looked at this stable, reliable system and said, “This is a government-run cartel. It would be better if we had competition.” They said, "We could get lower prices and we could have many, many more airlines, and there will be no real downsides to this system. We can let the airlines fly wherever they want, whenever they want, and charge whatever they want." It was a bipartisan thing. When deregulation passed in 1978, we didn't end up in the dream world of the deregulators. We ended up with something like The Hunger Games. We had a period of really cutthroat competition between the airlines in the 1980s. New airlines came in with no unions, offering no-frill services. Only peanuts. That's where peanuts come from. They were taking the really high volume, profitable routes and not serving more remote places or smaller cities. Big airlines fought back and undercut them on price to push them out, then jack up the prices afterwards. You had dozens of bankruptcies in this period. Over time, we had this shake out with more and more mergers and concentration. Today you have very few choices, more concentration than during regulation, higher prices in a lot of places, reduced quality of service, increasing complexity, and loss of service to lots of cities and regions. That's the system we have now.
If the deregulation of the 1970s was a wrong turn, what happens now? What’s the plan to fix flying?
There's three big principles that we should start with. First, no more flyover country. We should have airline service to lots of parts of the country, not just some really big cities. Second, no bailouts and no bankruptcies. We want a successful, reliable airline industry that isn't going through a boom-or-bust cycle or constantly merging or at risk of going under. That's bad for workers and for the country. Third, we want fair and transparent pricing. We need to have a system of prices that's fairer for consumers and easier to understand. That's something that a lot of people should be able to get behind, including people of both parties.
One thing I propose in the book is a draft-pick system, which is basically like an NFL-style draft where the airlines pick from a list of cities that don't get service at all or get very little service, and they're obligated to serve those cities. They can choose which ones to integrate them with the rest of their routes or pick ones near their hubs. That’s a concrete, actionable strategy that a member of Congress could push forward.
Your book emphasizes the importance of an airport to a city, state and region. Air travel is so important, you argue, that access should be guaranteed even where regular routes are not profitable, like Cheyenne, Wyo., or Toledo, Ohio. Meanwhile, Nashville is winning expanded access from carriers because we will fill planes. Why is widespread air access important to the country as a whole?
Imagine if Nashville didn't have an airport at all. We wouldn't have tourists flying from all over the country to come here. We wouldn't have people moving here at the same rate that they would be. Now imagine what happens to a city that loses air service — that creates a vicious cycle. Businesses might leave to go somewhere else. Companies may choose not to have their annual convention or conference there. Tourists can't get there.
As a society, if we want a vibrant economy, we need a transportation system that enables people to get from place to place. We want to recognize that there are talented people who live all across America, not just in a few large cities. I think that's a really important public policy value that we should have as a country. We should want people to be able to live in all regions of the country and in lots of different sizes of cities and still have economic opportunity. I don't think we should have a country where everyone lives in New York, Los Angeles or San Francisco. We have a big country with a system designed around federalism, and I think that's good. We should have choices for people to live in different places and policies that support that.
