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Why Airline Passengers Are Getting a Bumpy Ride

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Deregulation of the airline industry 20 years ago was supposed to increase competition, boost profits and raise consumer satisfaction. Except for profits, it hasnít worked out that way. And, says TIME senior economic writer John Greenwald, that extra revenue boost has "in large measure come out of the hide of passengers." The National Airline Quality Rating, a study released Monday, says that the major airlines skidded badly in many areas, including on-time performance, baggage handling and treating passengers politely. Complaints to the Transportation Department were up 26 percent last year.

"Deregulation was meant to remove barriers to entry and to promote price competition among airlines," says Greenwald. "Instead, the major airlines have used it to create fortress hubs." These hubs enable the airlines to route passengers through the airports they already dominate. In that kind of flight pattern, "most smaller and start-up airlines havenít stood much of a chance," says Greenwald.

Donít expect matters to change for the better any time soon, either. "The majors seem to be flying off in the direction of less goods and services," says Greenwald. "They are driving to cut their costs in order to lift their stock prices." The recent sick-out at American Airlines was a good indication of how the bottom line is charting the course of both management and unions, and once again leaving passengers behind.

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