Transportation Is a Utility: Thoughts on Airplanes and Trains (Part 1)

Note: This post is scheduled to go online a little less than a week after I wrote this, while I do not have access to the internet. It might already be out of date by the time it is posted, and due to lack of internet access, I may be slow to moderate/respond to comments.

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I’m guessing that just about everyone who is reading this post knows that, on April 9, 2017, United Airlines (or more specifically, United Express) called in Chicago Aviation security officers to forcibly remove a passenger who was already boarded and seated and posed no threat to anybody, and those officers broke the passenger’s nose, gave him a concussion, and caused him to lose two teeth. This has sparked a lot of discussion, including (but not only) the fact that the airline industry in the United States is an oligopoly, and that this situation (the broader situation, not just oligopoly) exists partially because the government chose to hand over airline regulation away from democratic systems and towards airline managers.

Though it was published before April 9, this article explains how enforcing anti-monopoly/oligopoly laws is necessary to preserve/expand civil liberties. That article focuses on African-Americans, but I think its points can be applied more broadly, and I think the United Airlines incident is an example of the link between concentrated market power and violation of civil liberties.

Meanwhile, another piece of news which has gotten far less attention (for obvious reasons) is the Trump administration’s proposal to cut all funding of Amtrak’s national network trains. You know those trains which I rode last year? Those routes might be eliminated if the budget passes in its current form.

The common thread in these two news stories is that they are about how transportation policy in the United States has been moving towards giving the private sector, as opposed to public sector, more control over transportation, and that this is bad for societal cohesion. In other words, the United States is moving away from treating transportation as a utility.

Let’s go back to airlines. It has been more than ten years since I was ever on a domestic flight in the United States, and most of my experience with U.S. domestic flights was with an airline which no longer exists (TWA). Thus, I do not have personal experience with current conditions on domestic U.S. flights. However, I do have recent experience (within the last five years) with domestic flights in Taiwan, Japan, and South Korea, and I can tell you that they have much better customer service than what people describe with domestic airlines in the United States at much lower prices. Now, some of that is because people are going to talk more about their horrible experiences with airlines than their boring experiences with airlines. However, it does seem to me that Americans are dissatisfied with airline service in the U.S. in a way that most East Asians are not dissatisfied with their domestic airlines. Furthermore, the domestic airlines in those countries either have government price controls (Taiwan) or are much more competitive than the regional air markets of equivalent size in the United States (Japan and South Korea).

Some of you are probably thinking ‘Domestic flights in Taiwan / Japan / South Korea? That’s ridiculous! Those countries are so small!’ Well, it’s not ridiculous because Taiwan and Japan are island countries, and South Korea has an entire province (Jeju) which is not on the Korean peninsula, just as the United States has an entire state (Hawaii) which is not part of the North American landmass.

Since I know most about Taiwan, I will focus on the airline industry there. Most domestic flights in Taiwan connect the main island to the outer islands. There is also ferry service to the outer islands (except Kinmen), but since air travel has some advantages over sea travel, having both air and sea connections means better transportation than having only sea connections. Since some islands are only served by a single airline and can only sustain a limited number of flights (for example, Qimei, an island with about 3,700 inhabitants, has only two flights per day), market competition clearly cannot keep airfares reasonable. Thus, the government imposes price controls. And when the airfares go up, the islanders make a big stink about it, and it is reported in the news.

Obviously, Taiwan’s regulation of domestic air travel has big problems because this happened (note: I once took a TransAsia flight from Taipei to Kinmen – if the timing had been different, I could have been on that flight). However, Taiwan’s approach – treating airlines as a utility – is the approach which best serves its interests. When I interacted with airlines in Asia, I generally felt I received good customer service. For example, I once got a refund for my ticket with very little fuss for a flight where I was a no show (I did not cancel – I was a no show). That airline had a monopoly for that particular route, so the most plausible reason why they gave me a refund so easily is that they were legally required to do so.

Now, one may ask ‘who cares if the outer islands, which have a total population of less than 300,000 people, have good, affordable transportation?’ First of all, good transportation is critical to maintaining the economies of the outer islands, but that is arguably not important to the 23 million people who live on the main island (the total population of all of the outer island is less than 300,000). The most obvious benefit to the people on the main island is military security – in every single instance in history when there was warfare between China and Taiwan, it started in the outer islands because they are the buffer zone. It is in Taiwan’s interests to keep the loyalty of the people in the outer islands, and for the outer islands to have sufficient resources to support Taiwan’s military (which is heavily concentrated in the outer islands).

But beyond the question of how helping the outer islanders benefits the main islanders, there is the basic principle that they are all part of same society, and that it is the duty of a society to take care of its own people.

Here one might say ‘yeah, that’s Taiwan’s situation, how is that relevant to anywhere else.’ True, people in New York City do not depend on upstate New York to serve as a buffer against military invasion (though I suppose that, if there were any serious threat of Canada invading the United States, that could change). However, the point about broader social and national cohesion applies just as much to the United States as to Taiwan. That is the case made by this blog.

One of the issues I’ve seen come up again and again in discussion about United Airlines is that some people cannot avoid using United Airlines if they want to travel to/from certain places by air because United Airlines is the only feasible option. Though I do not know the details, apparently Louisville (the destination of the flight) is one of those places where flight options are limited. Thus, one cannot rely on the power of the market to ensure good service – if the government does not step in, then the managers of the airlines will just do whatever the heck they want, which is probably to make themselves richer at the cost of both passengers and employees (it turns out the employees who were working on that flight are grossly underpaid, which might be related to why they performed so badly – employees who can’t take care of themselves can’t take care of passengers).

I have zero sympathy for United Airlines, and I would not feel sorry at all for them if they go out of business because of this scandal. However, because the airline industry in the United States is an oligopoly which does not have sufficient public control, I do not expect eliminating United Airlines will improve conditions for passengers. On the contrary, I think increasing market concentration might make the surviving companies even less inclined to treat passengers fairly.

Now let’s get back to trains…

(To be continued in Part 2)

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