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1. Ok, what we need with airlines is straightforward government setting of routes and prices. Competition within the airline sector won't actually deliver better service, it will deliver bankruptcies and consolidation.
2. The economics and physics of air travel simply make competition around price impossible to sustain for long. It either becomes private price setting like we have today or public price setting like we had before 1978. washingtonmonthly.com/magazine/march…
3. Most energy is used on takeoff and landing, so it's cheaper per mile to fly long-haul routes. Also small airports are just more costly than big airports, because of economies of scale. So all airlines want to fly long flights to big airports.
4. This results in the elimination of routes to smaller cities and higher costs for short-haul flights. Regional inequality. It also means you have 'ruinous competition' for the big trunk routes until airlines go bankrupt.
5. The only two stable configurations are private monopolies, with unequal air connectivity and terms/prices set on Wall Street. Or a public board in D.C. setting routes and prices, which will lead to equal air connectivity and public terms/prices.
