tfl: The Flatiron Life

This week on TWiT the TWiTs were talking about Virgin Airlines wanting to start American domestic service and the problems they face. There is a Federal regulation that requires domestic airlines to prove they are well funded and managed . They also must show American ownership. Both of these regulations are unnecessary and have a negative affect on the market. Virgin has this site explaining the situation and encouraging visitors to sign an online petition and send a form letter to their representatives. I have done both and encourage all of you to. I also sent a personalized letter to the President and my Congressmen.

Below is the text of that letter.

Dear [recipient name was inserted here],

I recently learned that our law requires American airlines to obtain a “Certificate of Public Convenience and Necessity” to operate. To me this sounds like antiquated regulation from the era of the CAB. As I understand it, the certification process requires an airline to prove it is well funded and managed as well as owned by Americans.

Why does an airline need to prove that it is well funded and managed? The market will quickly sweep aside any airline that fails these tests and it will do it much more effectively and efficiently than the government. The government does not tell businesses in general they must have proper funding and management to operate. To do so would destroy the entrepreneurial spirit and make every industry as unstable as the airline industry.

Is the protectionist policy of American ownership of airlines best for America? I don’t think so. If a foreign company finds an innovative way to deliver us goods or services at a discount of the price offered by American companies we should not reject them. We should encourage them so they may stoke the fire in our domestic carriers and cause them to think differently and innovative.

For Liberty,

Jacob Tomaw