There is no requirement to subsidise airlines if you increase regulation. The airlines abuse their local hub monopolies and there is more than a century of experience of regulating abuse of monopoly positions.
The airlines want it both ways. The demand and get anti-trust immunity to allow mega mergers and to secure monopoly positions in major markets but seek to resist the quid pro quo which is regulation of those markets. All companies seek to abuse their monopolies, it is normal corporate behaviour because companies exist to maximise revenue for their shareholders... providing customer satisfaction is only a by product of this. In properly functioning markets, they will not win the business if they don't provide a good service. However, the airlines have won anti-trust immunity and occupy local monopoly positions and the market does not work properly pricisely because they are inadequately regulated. We saw the result of this in banking and it was a disaster.
The power of the airlines in the US is extraordinary and the lack of regulators with real teeth is shocking. Only political action will change this. Judge suggests that you don't buy tickets... which in normal market conditions would work. In this distorted market, it simply won't work. If you live in Charlotte, NC and boycott US Airways, you will find you are spending far too much time in the Greyhound Bus Station waiting room.
One of the changes recently made in the UK in the financial services sector, which has a similar domination of the market by 4 very large banks, the regulator introduced a requirement that the charges levied by the banks must be based on actual costs of delivering the service and must be fair. This avoids the minefield of regulating prices, but prevents abusive gouging, which is what the change fee represents.
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