Amtrak Needs a Level Playing Field.
Everyone knows there’s gridlock in Washington. Much of it has to do with proposals and projects that are in conflict with political ideologies … with a philosophy of governance.
Amtrak’s annual visits to Congress offer a good example. Someone from our struggling national passenger rail system appears before an appropriations committee hat in hand, and points out that ridership is increasing, that many trains are running at capacity, that much of the railroad’s equipment is 30 years old (or more) and needs to be replaced. More new equipment, he says, would serve more Americans and generate more revenue. Strong, rational arguments for an increase in what has for years been pitifully inadequate federal support.
Unfortunately, Amtrak’s arguments mean nothing to some of the stone-faced members of the committee because they believe—because their political ideology dictates—that government should not be subsidizing passenger rail, that Amtrak should either make it on its own … or die.
But comes now an excellent article in Fortune magazine describing how the major airlines, with the complicity of government, have managed to limit competition. They get together, form a few “alliances”, reduce the number of flights on lucrative routes to save money, and raise the fares. Then, to preserve these cozy and highly profitable arrangements, they induce the government to stall on approving applications by other airlines that want to fly those routes and will charge lower fares. The article cites the specific example of a Norwegian airline whose application to fly trans-Atlantic routes has been stuck in the government’s “pending” file for almost a year-and-a-half.
The result of this dearth of serious competition is inevitable: if you fly one of the major U.S. airlines from Seattle to Paris next month, it will cost you anywhere from $1500 to $3500 … and that’s one way in economy class. What should the fares be? A couple of airlines have managed to sneak in under the radar and provide examples. Last June, I flew to Paris from Seattle on Icelandair for $545.
We keep hearing a lot of drum thumping about our sacrosanct free enterprise system, but when it gets right down to the short strokes, it turns out that capitalists don’t really care very much for actual competition.
In the case of the airlines, government helps to ensure profits, by allowing collusion among the major players and making it difficult for potential competitors to enter the marketplace.
But if Amtrak can’t manage to make a profit, well that’s just too damn bad. Sink or swim.
Why the different treatment? One reason immediately occurs to me: the airlines can make limitless political contributions; Amtrak is specifically prohibited by law from making any.