Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, March 11, 2005

A Lot of People Prefer Regulation

Jetsgo, a discount airline in Canada, just closed up shop suddenly at 2am this morning.
Jetsgo's demise came after a series of setbacks.
The airline had to cancel flights shortly before Christmas during a Toronto winter storm, stranding thousands of angry passengers. Then came a botched landing attempt by a Jetsgo aircraft at Calgary International Airport in January, and last Friday, one of its planes left debris on the runway at Toronto's Pearson International Airport.

Despite these known problems, people continued to book flights with Jetsgo, assuming there would be no risk that the airline would cease operations.

At Pearson International, Canada's busiest airport, passengers were

“I'm getting married in a couple of days, and they just cancelled my flight,” one woman told CTV News. “How would you feel?”

One father said he had been working to pay for a March break vacation for his daughter, only to now be faced with a second bill because their flight has been cancelled.

“I've been working like a dog waiting for this vacation,” the man told CTV.

When the airline industry was heavily regulated, fares were much higher, but customers bore very little risk that the airline would suddenly cease operations. With deregulation, customers can choose much lower airfares, but they seem to think the gubmnt should insure them for the risks that an airline might close down without notice.
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