How a grand attempt to improve airline travel backfired — and ended up turning flying into a total nightmare

The TWA Hotel offers guests a luxurious stay, with 500 rooms, a rooftop pool, and a bar in an old retrofitted airplane. It also contains echoes of its past life as the TWA Flight Center, a hub for the now defunct Trans World Airlines. In TWA's heyday, airlines competed on experience, luring elite passengers with lavish meals and comfortable seats. Some of those golden-age amenities are present in the TWA Hotel, such as banks of pay phones and a luxe café built in the footprint of its dining predecessor.

But just across the tarmac, JFK's still working terminals stand as a stark contrast. This past year has been a nightmare for air travelers, featuring epic flight meltdowns, over a million mishandled bags, and a nationwide ground stop caused by outdated equipment at the Federal Aviation Administration. It's almost impossible to imagine a time when air travel was pleasant, much less enjoyable.

Aviation experts and industry groups say the story of air travel's service decline is one of priorities. Decades' worth of shortsighted decisions that prioritized efficiency and price cuts over quality and comfort came to a head during the pandemic, leaving millions of Americans trapped in a headache-inducing, feet-numbing flying purgatory with no signs of a long-term fix.

The trade-off

Johnny "Jet" DiScala, who visits more than 20 countries a year and runs a popular travel blog, could rattle off a dozen tips to make your next flight suck a little less. Unfortunately, he told Insider, there's not much to be done about one of his least favorite parts of flying: cramped legroom.

"When I started flying, legroom was, like, 39 inches," DiScala said, who started flying as a kid in the mid-1970s. "Now it's 28. That's criminal."

The Washington, DC, advocacy group Flyers Rights has estimated that seats in economy have lost roughly 8 inches of legroom since the early 2000s. And while butts still vary in size, airlines have taken away about 2 inches of seat width. When the FAA started accepting public comments in August as part of an effort to determine whether it should set a minimum seat size, it received more than 26,000 comments in 90 days, many from travelers complaining about shrinking legroom.

The shrinking seat is just one of many casualties of our modern flying experience. At the heart of these changes is a trade-off made some 50 years ago. Before the 1970s, flying was a rich person's game, and only a small set of Americans traveled by plane for leisure. But federal deregulation designed to open up competition among airlines and bring down prices to make flying more accessible changed that. A long-running survey by the industry group Airlines for America found that in 1971, only 21% of Americans said they'd taken a flight in the past year and just under 50% said they'd taken a flight in their lifetime. By 2019, just before the pandemic, 45% of Americans said they'd flown in the past year and almost 90% said they'd flown at least once in their lives.

DiScala says the mass access is well worth it.

"I think now is the golden age of travel," DiScala said. "Now, because of deregulation, there is more competition, and there's airlines like Spirit, there's low-fare carriers, which allow pretty much anyone to fly."

The shift did, however, have some unintended consequences. The effort to cut back on government rules opened up the airways to new companies, but it also set off a cost-cutting race to the bottom. The travel fiascos of the past year are just the latest results of this cost-cutting. Lost baggage, overbooked flights, outdated equipment, hidden fees, and disorganized staffing have fliers at their wits' end; consumer complaints about airline service have risen by 300% from pre-pandemic levels. And while these snafus cost passengers, they often have little recourse.

"US airline companies tend to be very, very focused on the bottom line," Janet Bednarek, a history professor at the University of Dayton who specializes in the airline industry, told Insider. "And if they compete, they want to compete on price, and that means they're not competing on service."

The law that changed it all

The idealized images of the "jet set" of the 1950s, '60s, and early '70s — dressed to impress, with a cigarette in one hand and a martini in the other, enjoying impeccable service from the comfort of their cushy seat — were possible because the airlines were, as the industry blog Simple Flying put it, "guaranteed profits." The federal government dictated almost everything about air travel: how much airlines could charge for airfare, which routes they could fly, even their schedules. Many of these measures had been put in place to improve safety following some rattling accidents in the early days of commercial air travel.

But as planes got safer and airlines got the hang of moving millions of people through the air, some of the more stringent rules seemed less necessary. So in 1978, at the urging of the economist and "inflation czar" Alfred Kahn, President Jimmy Carter enacted the Airline Deregulation Act. The law was part of a suite of policies designed to fight decades-high inflation through deregulation. The thinking seemed simple: With fewer rules about who could operate and where, new businesses could spring up to take on sclerotic incumbents, forcing everyone to bring down prices and serve more people.

Before, only certain airlines could fly certain routes. And as Clifford Winston and Steven A. Morrison of Brookings noted, the regulators overseeing those routes and airlines often did not allow potential competitors in. With deregulation, a whole world of routes was opened to airlines. And as regulation eased, new airlines popped up, eager to service previously guarded routes and set competitive prices. Southwest Airlines, the villain of the latest travel season, was able to take advantage of this new lack of rules to expand from a local carrier to a nationwide juggernaut. Herb Kelleher, a cofounder of Southwest, once testified that the Airline Deregulation Act "literally made the Southwest Airlines of today and the other low fare carriers I speak for possible."

Some in the industry welcomed the idea of deregulation with open arms. In 1977, Richard J. Ferris, the president of United Airlines, said the soon-to-be-abolished regulations were "sowing the seeds of destruction" of quality airline service.

Daniel May, the president of Republic Airlines, said in testimony in 1983, as deregulation fully came into effect, that "because of deregulation, the domestic airlines are offering the public far more and better service than they could have expected under regulation."

But some airlines — including TWA — that had coasted on certainty and guaranteed profit margins were against deregulation, arguing that the competition would make fliers' lives worse and throw the industry into a bottom-line-focused fight for survival.

"The view of airline deregulation from the cockpit is that it is a cruel hoax on taxpayers, on vast numbers of air travelers, on the stockholders of airlines," Henry Duffy, the president of the Air Line Pilots Association, said in a 1983 Senate hearing on effects of the law. He said deregulation had "transformed a once profitable industry into one where bankruptcies, actual and threatened, dominate the news," adding that "quantity and quality of service have been drastically cut back."

As regulations eased, consumers felt relief. From 1976 to 1993, fares fell by a third — and deregulation accounted for 60% of that price drop, according to Winston and Morrison. From 2000 to 2004, they fell by 25%. The number of competitors in each market increased to 3.5 in 2005 from 2.2 in 1980, a report from the Government Accountability Office said. More people were flying.

As competition drove prices down, it was no longer feasible to hire live bands for in-flight entertainment or pay for other luxuries. The cost cutting didn't stop there: Squeezing seats closer together allowed companies to sell more tickets to help cover costs. Sometimes customers didn't show up for a flight, so airlines started to sell more tickets than available seats — if they overbooked, they could just pay off the unhappy customer they'd bumped and still come out ahead.

Many industry insiders eventually recognized the failed promises of deregulation."America's airline system has greatly deteriorated," Robert Crandall, a former American Airlines chairman, said in a 2008 speech. "Our airlines, once world leaders, are now laggards in every category, including fleet age, service quality, and international reputation." He added that "airline service, by any standard, has become unacceptable."

Ultimately, however, the next decades showed that safely flying an aluminum tube full of people 30,000 feet in the air is an expensive endeavor. And while more people were able to jump on a jet, the race to the bottom caused plenty of headaches for consumers and airlines alike. In 2001, American Airlines acquired TWA, which had filed for bankruptcy three times. Without those guaranteed profits from the pre-deregulation era, the groundwork was laid for today's woes.

A race to the bottom

Today, the promise of more competition has mostly fallen by the wayside. Just four companies — Delta, American, United, and Southwest — controlled 66% of the market in the US in 2021. And even as more Americans have started flying, the idea of dramatically cheaper flights seems to have faded: Airline-ticket prices are about 11 times what they were in 1969, while inflation has made overall prices about eight times what they were then. Jeffrey Price, a professor and aviation-security consultant, said that with few other options beyond air travel to get across the country, airlines essentially have a monopoly over long-distance transportation.

"We don't really have any other alternatives," such as a national high-speed rail system, Price said. "Leisure passengers are totally at the mercy of the airlines unless they really want to go get a recreational vehicle, and most people don't have that kind of time in their vacation days anymore to do that," he said.

At the same time, airlines are scrambling to hang on to any profits they can. Pay for pilots, airline workers, and airport employees has been slashed, contributing to a serious labor shortage. Plus, with an eye toward cost cutting, the industry has been slow to update its technology, as evidenced by the FAA systems outage on January 11 that affected more than 9,000 flights.

"The system is antiquated, doesn't have adequate backups, as we all saw, and needed to be upgraded 20 years ago, not six years from now," Price said.

That upgrading effort, known in the industry as Next Generation, has been in the works since 2003. Price said that while some of the delay is due to standard bureaucracy, the industry also doesn't have an incentive to pick up the pace if things are moving relatively smoothly.

"Shutting down the US airspace system has not been done since 9/11. Now we saw that it can be done because somebody put the wrong file in some folder or something," he said. "The system, it's way too fragile."

All this cost cutting is weighing on the customer experience. Those FAA comments from August? Well, they were predictably blunt.

"Well, where can I start? May I begin with an inner laugh? Take out all extra seats that the airline so greedily put in place," one commenter wrote. "The airlines are reacting like food vendors; they raise the price and cut down on the amount of food in the package and the quality."

Airlines have also cut down on how much food fliers get, offering measly bags of pretzels instead of the deluxe meals of 50 years ago. "Food and drink and all of that is weight, and weight equals more fuel needed to fly the plane," Bednarek, the history professor, said. "So anywhere that they can cut costs and make it less expensive for them to fly you so they can get more return off of the ticket price that you pay, that's what they're going to do."

But Airlines for America and the International Air Transport Association, which represent the major US airlines, have said they want to make sure the government remains focused on safety "and not comfort or convenience." So what's a squeezed passenger to do?

"People could stop flying," Bednarek said. And some people are: Business travel, which provides airlines their greatest profit margin, has especially struggled to recover from the pandemic. Congress has also taken steps to try and improve the flying experience and give customers more power, like mandating an aviation consumer advocate at the Department of Transportation, but they largely rely on individual travelers to change their behavior.

Perhaps it's time for travelers to reconsider whether the trade-off the government made on their behalf is working. Yes, more people are flying — but sometimes you're paying to get booted off a plane, get stuck in an airport, or scour the globe for your luggage. It might be worth it to pay a little more than to pay for nothing at all. Just take a stroll through the halls of the TWA Hotel, where there's ample legroom at the bar in a vintage plane, and you might get a little nostalgic for flights —and regulations — gone by.

Bartie Scott is a senior economy editor at Insider.

Juliana Kaplan is a senior labor and inequality reporter on Insider's economy team.