In case you missed it, Kimberlee Josephson, Associate Professor of Business at Lebanon Valley College and Adjunct Research Fellow with the Consumer Choice Center, penned an op-ed in the Washington Examiner outlining the adverse effects of the outdated “perimeter rule,” which limits the number of long-distance flights at Ronald Reagan Washington National Airport (DCA). Josephson notes higher airline ticket prices, travel inefficiencies, and an anti-competitive environment caused by this antiquated rule.
Josephson’s op-ed highlights that increases in airfare are especially impactful for travelers in Washington, D.C., which was named the nation’s most expensive metropolitan air travel market. Josephson advocates for modernizing the restrictive perimeter rule, which would foster a more competitive landscape for airlines, reduce ticket prices for consumers, and potentially generate new job opportunities in the region. In doing so, she concludes, Congress should update Washington, D.C.’s skies to better meet airline advancements and consumer demand.
Read the piece HERE and below:
Outdated Rules Create Inflated Costs For Consumers At DCA
Washington Examiner
Kimberlee Josephson
August 28, 2023
https://www.washingtonexaminer.com/opinion/outdated-rules-create-inflated-costs-for-consumers-at-dca
…Although demand for air travel has come back strong, airlines are finding it difficult to meet the needs of consumers when it comes to flight costs and destination spots. Removing any unnecessary added expense or barrier to flying is more important now than ever.
Consumers should have access to the airports most conducive to their pocketbooks and travel plans, and it is for these reasons that the Direct Capital Access Act is being proposed for Ronald Reagan Washington National Airport.
DCA is the only airport that is required to abide by what’s known as the “perimeter rule,” which limits inbound and outbound nonstop flights to a 1,250-mile radius. DCA must also adhere to a “slot rule,” which only two other airports, LaGuardia Airport and John F. Kennedy International Airport, must follow. The slot rule requires flights to have a reservation for takeoff or landing, and “slots” at DCA are capped at just 60 per hour.
The Direct Capital Access Act aims to eliminate these rules, and below are some considerations for why.
Irrelevant rules
DCA has been operating since 1941, and in those early years, both the perimeter and slot rules made perfect sense. Airplanes required more runway space, they had significantly longer takeoff and landing times, and the noise was of concern to surrounding neighborhoods. That’s in part why Dulles International Airport was established in 1962, to alleviate air traffic to DCA and accommodate international aircraft flying greater distances.
Throughout the 1960s, the perimeter and slot rules for DCA served a purpose from an operational standpoint and had the added benefit of helping to develop a market for the newly established Dulles option.
Times change, and so has the business of air travel. According to a recent analysis by the American Action Forum, density concerns and flight capabilities have evolved and improved dramatically since then, so consumers should be able to capitalize on these advancements.
Passenger preference
Instead of being able to fly into DCA, many consumers must fly to Dulles or Baltimore-Washington International Thurgood Marshall Airport and spend extra time and expense for ground transport to get to where they really want to go. As for those able to secure a DCA direct flight, upfront costs for tickets are high due to supply and demand pressures.
The added expense for DCA, however, is competitively countered by airport convenience. DCA offers quick and easy access to ground transportation from the gates and is in an optimal location for heading to Capitol Hill or downtown Washington. Yet only those with the financial means to do so can take advantage of the benefits of DCA has to offer.
Airline arguments
…Delta Air Lines is a proponent of the bill, asserting that it would meet the needs of consumers, and other advocates for the bill claim it would increase competition, reduce ticket costs, and generate new job opportunities for the metropolitan region.
In opposition to Delta’s stance is United Airlines. United has a vested interest in passengers being directed to Dulles because it unofficially owns that airport. Dulles is referred to as a “fortress hub” for United flights since United controls 70% of the gates.
Not to be left out of the DCA debate is American Airlines. American has preestablished designated slots at DCA, and given that there is a “use it or lose it” approach to reservations, some of American’s connecting flights are routed to DCA simply to safeguard slots.
If the slot and perimeter rules were to be removed, it is likely that passengers flying into DCA would actually be staying in the metropolitan region and flight patterns could be used more efficiently.
As rightly noted by Stephen Kent at the Consumer Choice Center, “Travel can be stressful enough as it is for consumers without artificially imposed barriers to efficiency and competition in the Washington, D.C. market.”
Washington, D.C., is the most expensive location for domestic flights. By removing the pernicious perimeter rule, consumers could save substantially on flight costs, and by scrapping the slot rule, our nation’s capital could become a more accessible destination rather than a pit stop for connecting flights.
We’ve come a long way since the first flight in 1903, and if aircraft can advance as rapidly as it has, so too should the operations and stipulations of the airports that serve those taking to the skies.
Kimberlee Josephson is an associate professor of business at Lebanon Valley College and serves as an adjunct research fellow with the Consumer Choice Center.
About CAA
CAA consists of diverse members from around the country and various industries, including transportation, general business groups, the small business sector, entrepreneurs and job creators, organizations focused on economic development and leaders in the civic and policy communities.
Learn more about Capital Access Alliance HERE.