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Southwest Airlines Co. Message Board

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  • jon278b jon278b Nov 3, 2005 11:00 PM Flag

    Wright supporters

    The only explanation for the Wright Amendment is a diversion of resources from Texans and Americans everywhere to AA and D/FW's outlying areas. Mancur Olsen's Logic of Collective Action explains why the regulations have persisted for so long.
    The costs of higher fares are distributed widely across the country, whereas the benefits are concentrated with AA and North Texas. Thus, support for the amendment will more easily form, as it has, and demand for repeal will remain dispersed.
    But the wild card in this formula is Southwest, who incurs concentrated costs from Wright as well. As Wright has limited their growth severely (and stifled investors' expectations for accelerating returns) and communicated the costs of Wright, the balance of power has shifted. Given republican deregulatory dogma and Southwest's new muscle, I expect a repeal at some point. Of course these are just my observations applied to the theory of a Nobel laureate.

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    • jon,

      I assume you are talking about the deregulation of the airline industry-1978 ("Given republican deregulatory dogma...")

      You wouldn't happen to know who sponsored the the 1978 Act, would you?

      • 1 Reply to COMBAT_APPLE
      • I am referring to post-Reagan deregulatory efforts and general republican economic principles. I'm not talking about the original deregulatory efforts, but current republican sentiment. Wright was a Democrat. As was Cannon.

        By and large, I believe the Democrats favor deregulation as well, hell everybody can appreciate the efficiency of free markets except rent-seeking entrenched industries. With Congress chock-full of evangelical deregulationists, I can't believe the objections of a handful of myopic Republican congressmen would keep Wright from being repealed.

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