Thursday, March 20, 2014

The gist of protection...

Here's the gist of Air Line Pilots Association president Lee Moak's letter, Viking Skies, in today's Wall Street Journal (HT Don Boudreaux):
The Air Line Pilots Association International strongly supports greater access to international markets where airlines compete on commercial merit. However, Norwegian Air ShuttleNAS.OS -2.15% Norwegian Air International (NAI)'s parent company, seeks to dodge Norwegian laws to gain an unfair competitive advantage over U.S. airlines. NAI's business plan sets a precedent that threatens the jobs of tens of thousands of U.S. airline industry employees, union and nonunion alike.

Here's the gist of Don Boudreaux's response:
Capt. Moak forgets that competition is not about fairness or unfairness for suppliers.  Markets and competition are about serving consumers.  Period.  Suppliers are valuable only because, if, and as long as they serve consumers in ways that consumers themselves - rather than politicians or the suppliers - judge best.  The “unfair competitive advantage” here is not, therefore, one enjoyed by the foreign supplier that Capt. Moak seeks to prevent from serving American consumers; it is, instead, the privilege of being protected from competition that he himself seeks for his union members at the expense of those consumers.

Here's more from Mr. Moak, and "another union", from a recent NY Times article:
“They want to exploit legal and regulatory loopholes to give them an unfair economic advantage over U.S. airlines that operate in a global marketplace.”

The pilots union said Norwegian was trying to “cheat” the agreement, first struck between the United States and Europe in 2007 and expanded in 2010, which gave easier access to major airports like Kennedy and allowed airlines to operate more freely across the Atlantic. Critics said Norwegian was pursuing a “flag of convenience” strategy, and compared it to the exodus of the domestic cargo ship industry to countries with weaker regulatory oversight like Liberia. Another union called it “the Walmarting” of the airline industry.

This was the gist of my response to that NY Times piece:
“The Walmarting of the airline industry”? My, if the airline industry could only be Walmarted! If it could indeed provide low and middle-income Americans access to a good that was previously out of reach and increase employment opportunities in the industry many times over… I’m literally getting goosebumps as I type!!

Of course we all understand where the U.S. airlines and the unions are coming from. But we must never lose sight of the fact that any protection from competition that government would provide a company, industry or union comes at the expense of the consumer. I say we side with the consumer…

As Don said, "Markets and competition are about serving consumers.  Period." The only thing I would add is !!!!

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