You mentioned Canada: they are notorious, AIUI, for having successfully privatized their ATC system. Is there a reason that ATC privatization didn't make it onto your list of reforms?
You can combat fortress hubs by mandating that no more than 40% of gates/slots are owned by any airline/alliance. That would being competition to ATL, CLT, DFW, MSP etc
The thing is--the network effects you get out of fortress hubs are genuinely desirable. 1-stop, well-timed connections from secondary->secondary airports are better for consumer welfare than slightly cheaper airfare. For that reason, I think airlines merging into the big 3 was good (and further mergers should be allowed).
Dual-hub mega airports like ORD work, and you could see something like a United hub at Atlanta or Miami being pro-competitive, but splitting up a CLT/DTW/MSP would be genuinely counterproductive.
Sure, I’m not trying to nuke all airline hubs. The intention is to get every (major at least) airport a reasonable amount of competition so you don’t see the kind of pricing power that DL has at ATL for example. A competitive situation like ORD where two airlines duke it out (the ads in Chicago are quite funny) is good. An overwhelming monopoly such as ATL/CLT/DTW/DFW etc is bad and ensures higher prices.
Perhaps? In the specific cases of MSP, DTW, and CLT, you don't have the local O&D to support two robust hubs. A dual hub in e.g. Detroit would probably result in such a decline in frequencies + destinations that it would be worse than the status quo.
In other cases, it's hard to see what airline would want to set up. ATL is obvious for United, but DFW is questionable. Maybe Delta would give it a shot, but they're trying something out in Austin and it doesn't make sense for United.
More generally, I'd argue that you'd rather be a consumer in Charlotte (higher prices, way more destinations) than similarly sized Raleigh (lower prices, more competition, fewer destinations).
Ideally you’d be in ORD (dual hubs), LAX (none of the big 3 above 20%), JFK (major competition between DL/B6), BOS (same as JFK with shares flipped) or DCA. It’s fine to have one carrier/alliance with a plurality but you’d see negative effects to customers with a majority (let alone as 75% supermajority like DL at ATL). Treating customer welfare as reducing stops/throughchecked luggage/connection times is a lot more fiddly and harder to implement than just looking at prices.
You mentioned Canada: they are notorious, AIUI, for having successfully privatized their ATC system. Is there a reason that ATC privatization didn't make it onto your list of reforms?
You can combat fortress hubs by mandating that no more than 40% of gates/slots are owned by any airline/alliance. That would being competition to ATL, CLT, DFW, MSP etc
The thing is--the network effects you get out of fortress hubs are genuinely desirable. 1-stop, well-timed connections from secondary->secondary airports are better for consumer welfare than slightly cheaper airfare. For that reason, I think airlines merging into the big 3 was good (and further mergers should be allowed).
Dual-hub mega airports like ORD work, and you could see something like a United hub at Atlanta or Miami being pro-competitive, but splitting up a CLT/DTW/MSP would be genuinely counterproductive.
Sure, I’m not trying to nuke all airline hubs. The intention is to get every (major at least) airport a reasonable amount of competition so you don’t see the kind of pricing power that DL has at ATL for example. A competitive situation like ORD where two airlines duke it out (the ads in Chicago are quite funny) is good. An overwhelming monopoly such as ATL/CLT/DTW/DFW etc is bad and ensures higher prices.
Perhaps? In the specific cases of MSP, DTW, and CLT, you don't have the local O&D to support two robust hubs. A dual hub in e.g. Detroit would probably result in such a decline in frequencies + destinations that it would be worse than the status quo.
In other cases, it's hard to see what airline would want to set up. ATL is obvious for United, but DFW is questionable. Maybe Delta would give it a shot, but they're trying something out in Austin and it doesn't make sense for United.
More generally, I'd argue that you'd rather be a consumer in Charlotte (higher prices, way more destinations) than similarly sized Raleigh (lower prices, more competition, fewer destinations).
Ideally you’d be in ORD (dual hubs), LAX (none of the big 3 above 20%), JFK (major competition between DL/B6), BOS (same as JFK with shares flipped) or DCA. It’s fine to have one carrier/alliance with a plurality but you’d see negative effects to customers with a majority (let alone as 75% supermajority like DL at ATL). Treating customer welfare as reducing stops/throughchecked luggage/connection times is a lot more fiddly and harder to implement than just looking at prices.