Want To End Oil Speculation... And Possibly Re-Regulation?

A few weeks ago, retired American Airlines Chairman Bob Crandall called for the US government to get involved in the current aviation industry crisis. Crandall stopped short of calling for a return to full-on industry regulation, pre-1978-style... but some other industry voices aren't being so shy.

The Christian Science Monitor reports a variety of specific ideas have been offered by industry execs and analysts, but there is agreement that Washington and the two presidential candidates need to take action now to avert an airline industry collapse.

Crandall is among them. "Unless something is done to move toward some kind of fix, we're going to see every one of our major airlines in bankruptcy," he said. "If that isn't enough of a crisis to alert everybody, then I don't know what it will take."

Aside from the general negative impact on the economy of airlines cutting back or collapsing, a Business Travel Coalition study estimates that 100 regional and 50 major airports nationwide will lose some of or all their air service by the end of the year.

Some industry observers want federal regulation to make a comeback, but in general, the airlines don't want that. Representatives of the major carriers urged Congress this week to act against oil speculators some believe have played a major role in spiking oil proces.

David Castelveter of the Air Transport Association admits that's a short-term measure. "In the long term, we'd like to see the modernization of the air-traffic control system so we can continue to find ways to reduce our fuel burn," he said.

Analyst Michael Boyd invokes a popular metaphor in arguing against any attempt to reimpose regulation.

"Once you let that camel's nose in the tent, it's going to set up housekeeping," he said. "Deregulation has worked OK, and the airlines will adjust to these oil prices. We can get through this."

The next few months should determine who's right.

FMI: www.airlines.org