Did You See…?

…Mark Perry’s blog on the unintended consequences of the Department of Transportation’s new penalties for airline delays? Under a rule in effect April 29, a carrier that allows a flight to sit on the tarmac for more than three hours will be subject to a fine of $27,500 per passenger. Some airlines – notably JetBlue, which must contend with crowding and iffy weather at its hub at JFK – are already responding by aggressively canceling flights at the first sign of major congestion.

It’s not clear why any penalty, let alone one that amounts to millions of dollars per flight, is appropriate here. For one thing, aircraft safety is not the issue. For another, carriers already have strong incentives to avoid tarmac delays – think wasted fuel and labor costs, not to mention horrendous doses of bad publicity. And passengers who believe they were injured by the experience can always try to convince a jury that the airline owes them money.

The career bureaucracy at the DOT has always been skeptical that market incentives were sufficient to keep the airline business on track. Good thing Congress thought otherwise back in 1978, when they deregulated air travel, or we’d still be paying $800 to fly coach across the country.