Southwest Airlines Founder Speaks Out Against New Regulations

by Josh Lew
Last updated: 12:00 PM ET, Mon March 21, 2016

Photo courtesy of Southwest Airlines

Herb Kelleher, the founder and former CEO of Southwest Airlines, was invited to speak at the New York Stock Exchange last week. The 85 year old was one of the most vocal members of the air travel industry during deregulation, so it was no surprise that he took the time to comment on some of the newest regulations being proposed in Washington.

It might even be an understatement to say that Kelleher was instrumental in the effort to deregulate the commercial air travel industry in the United States. He paid lawyers working on the cause out of his own pocket when his airline's legal budget ran out.

While he had the microphone at the NYSE, Kelleher cited recent bills being proposed in Congress as reason for the industry to worry.

"...[The] newfound financial wellbeing of the airlines invites government intrusion. I already see bills being offered telling us how to provide customer service. I see bills being offered to increase our taxes and fees enormously. I hope that we don't succumb to that. The people - not just of the United States but of the world - should be alive to the fact that the new regime has permitted them to fly in enormous quantities for the first time."

On one hand, Kelleher has a point. Airlines are for-profit enterprises that should be able to set fares and levy fees however they see fit. They are not charities or public services. On the other hand, however, the fact that consolidation has left the United States with fewer airlines and less competition than ever before could be cause for concern when it comes to protecting consumers.

Fliers have fewer choices now than at almost any time during the Jet Age. It is harder to argue that a totally free market will solve any issues on its own when there are so few options for people to choose from. In smaller markets, fliers are confronted with the lack of choices every time they fly. On many routes, travelers do not have a choice about which airline they will fly because only one carrier serves that particular route.

That said, the sheer number of amendments proposed for the FAA reauthorization bill understandably alarms people in the airline industry. Amendments were proposed not only to regulate fares and fees, but also things like seat size. Though not all of these amendments made it to the final House or Senate bills, Kelleher and others connected to the commercial aviation industry have started to remind people of the ideas that brought about deregulation in the first place.

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