I gladly defend profits. I even defend profits for big companies.
But I usually include an all-important caveat that profits are only good if earned in a competitive marketplace.
At the risk of understatement, I get angry when big companies get money because of special favors from government. That’s because goodies from politicians and bureaucrats unavoidably come at the expense of consumers, taxpayers, and small businesses.
Sadly, there are many examples of big business and big government being in bed together.
Now we can add to the list. In a column for the Washington Examiner, Tim Carney shines a light on a new case study of big business using big government to thwart choice and innovation.
He starts by describing a development in the air travel industry that most people would see as a good thing.
SkyWest is a small air carrier that operates flights for some of the big airlines. They want to branch into a new field: operating regularly scheduled flights on small planes from private terminals. JSX Air is one company that already offers this product. Legally known as a “public charter” or “scheduled charter” operator, JSX flies small planes out of private terminals, but at fares far closer to commercial coach than to private air travel. …The main advantage is a more reasonable boarding process — particularly, no TSA security theater. …it also allows you to bring on your own snacks, drinks, and jars of local marmalade — all of which our Transportation Security Agency has deemed too dangerous to fly.
But not everyone approves.
The massive legacy airlines hate this, because it is a competitor who is more much pleasant to fly, operating at about the same costs. Thus the airlines and their pilot union are trying to get Uncle Sam to clamp down on public charters.
And what are their arguments?
The unions have hired revolving-door former congressman Peter DeFazio as their lobbyist, opposing this license. Their argument includes attacking the business model already used by JSX. …Their main argument is that SkyWest and JSX would be allowed to use veteran pilots who are over 65 — which is the mandatory retirement age for pilots of larger aircraft. Also, pilots who don’t yet have 1,500 flying time are allowed to captain smaller planes but not large planes, and so SkyWest could use these slightly greener pilots, too. The pilots and the airlines will make safety arguments against the expansion of public charters, but these fall short. Already rich people can fly without TSA screening out of private terminals, and already rich people can charter jets with 66-year-old pilots or captains with only 10,000 miles. So the big airlines’ argument amounts to: This is safe enough for rich people, but not for our potential customers.
Is it possible that it is marginally more dangerous to fly on a plane with an older pilot or a pilot with fewer than 1,500 hours of flying time?
I have no idea, but I think consumers, shareholders, Boards of Directors, and insurance companies should be the ones driving the decision, not bureaucrats, politicians, lobbyists, or rival companies.
Tim identifies the real issue.
The anti-SkyWest and anti-JSX campaign is really about using the government to outlaw competition.
Amen. We need genuine free enterprise, not cronyism.
P.S. The controversy over “stakeholder capitalism” is partly about the unseemly alliance between big government and big business.
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Image credit: N i c o l a | CC BY 2.0.
