You can go hundreds of years back and companies and businesses were already then busy at pushing through special privileges to keep their profits high.

It isn't a matter of whether you regulate or not, but about the quality of regulation and who it is aimed at regulating. When politics can be bought by power business interests you can bet there will be ever more regulations piled on which don't actually help consumers much.

Guilds are probably the prime example. Government-enforced cartels established by the industries to keep up prices for centuries.

Oh, I agree. My point is once you set up a powerful regulatory apparatus the companies involved are going to capture it, or at least try to.

You need regulations, and you need regulators. But too much regulation is bad for consumers, because once it reaches a certain complexity only the insiders understand what's going on.

Regulation is rarely a case of being good or bad. Rather, various competing interests have valid points and some arbitration must be found between them. As the old saying goes (paraphrased), politics is about slogans. Governance is about choices.

Political systems exist for political purposes. So what happens over time in a democracy is that regulations that sound good get enacted while regulations that don't sound good are not. In addition, regulations are enacted that sound good even in cases that may not require any regulation at all.

To fix this, politicians use cartoonish slogans -- "all government is bad" or "we need somebody to protect us from corporations"

This response, while great for the political system, does nothing to address the underlying bug in the regulatory system.

What we have some control over, is the process that makes regulation. And a process that makes it easy and convenient, will be easy and convenient for the insiders who work it.

A lot of the time it's just plain bad -- just the result of monetary influence and lobbying for unfair advantages.

And that story is about making it harder to regulate. If regulations are technocratic decisions made according to vague or ever-changing rules, then lots of cosy deals are going to be done.

A lot of anti-competitive law in the US is not "big vs small". Many of the biggies are small vs small or even small vs big - occupational licensing, exclusionary zoning, agricultural laws, lots of state level regulations designed to protect (not very large) incumbents.

Sadly protectionism is a widespread plague that doesn't fit any easy narratives.

It is a disease, and it won't go away until everyone stops playing the game of trying to legislate competitive advantage. Some of the worst complainers about protectionism unfortunately are the biggest players. Example: I remember when Gibson complained about their factories being raided, reportedly for using illegal timber (an environmental regulation that some also view as protectionism courtesy of the Pacific Northwest timber industry). It got a lot of press, but my initial reaction was one of schadenfreude. Because Gibson was notorious for playing their own "protectionism" game courtesy of a lot of dubious patent / copyright lawsuits on various competitors (eg Paul Reed Smith, Warmoth, Elderly), virtual rock band games (Guitar Hero and Rock Band), Paper Jamz guitars, and probably others I can't recall at the time.

I.e. that's a large number of small political donors in your state (highly motivated to donate to your opponents) vs one big corp in another state, plus of course rationally ignorant consumer/voters.

Famously, Richard Branson once said:

If you want to be a Millionaire, start with a billion dollars and launch a new airline.

This article from November last year has more details: http://priceonomics.com/can-airlines-make-money/

> Overall, the industry has lost $35 billion since deregulation.

Not using up one of my economist.com free articles per month, but I think this is what happens when an industry has the cost of their biggest variable expensive crash: http://www.macrotrends.net/1369/crude-oil-price-history-char...

Note that they'll tend to hedge their purchases, which protects them for a while from fuel cost increases while also delaying the benefit of decreases.

Out of curiosity, what does the landscape look like if you excluded carriers that went outright bankrupt?

Also, how are dividends considered?

For the purposes of assessing the industry's profitability though, we cannot exclude them - if losses are because they were badly run and lost market share to other players, then their losses will be offset by the survivals (who then buy them out).

But it does not properly assess the profitability of the industry - unless you think you can pick in advance who the survivors are going to be.

If you systematically ignore the companies that go bankrupt, you will have a picture of the industry that is far healthier than the reality.

Further - especially in the airlines industry - you can't even go back too many years with the examination of the current companies - because they are the results of many mergers. So you should also be including the companies that used to be, but got merged in the existing ones.

Also, even a 24 billion profit in a good year isn't exceptional given the industry has $160 billion in revenue. Google in 2015 made 23 billion in profit on only 75 billion in revenue.

"But a new paper by Jose Azar, Martin Schmalz and Isabel Tecu argues that trustbusters now need to look in a new direction: at concentrated ownership. If, for instance, a mutual fund owns shares in two rival companies in the same industry, it would not be in their best interest as shareholders to encourage them to act in a competitive way. The boss of Delta Airlines might propose a price war to boost his business. But would a mutual-fund manager who also owned shares in United Airlines be supportive? And would company managements be as keen to cut prices and fight for market share if they knew that their shareholders did not want them to?

Mssrs Azar, Schmalz and Tecu find evidence for exactly this in the airline industry. Including levels of common ownership in conventional measures drastically increases market concentration to more than ten times the level authorities say would be "likely to enhance market power"."

Bottom line: it looks like there should be competition, but maybe there isn't due to ownership structures.

⁰ I actually recently bought a roundtrip to Denver for $32 fully inclusive of taxes and fees. Granted, it's on Spirit, which is only marginally better than the bus, but can't beat the price.

- there are ~ 6 major airlines for a country of 320 million people. In Europe, there are many more (all the national carriers, plus lots of low-cost airlines)

- where are the low-cost carriers (like EasyJet or RyanAir)? JetBlue or SouthWest are not really low cost, they just have marginally better service than the old guard.

- customers are treated like dirt. Not just the ever-smaller seats and lack of any free food on domestic flights. It is even worse than that - they can change the agreed-on contract at any time, example: I paid extra $$ for a non-stop ticket LAX-BOS in June. A few days ago, I received an email form the airline apologizing for changing my ticket to a non-direct flight (which will take 3-4 hours longer), but there is no mention of any refund whatsoever.

I also had to book return tickets from DC to Denver. Fewer choices domestically, but still Southwest, United, and Frontier.

once again the government is responsible for it.

don't worry though, im sure somebody will call for the government to 'reform' the industry and make all the problems go away.

Thus regulation always does the opposite of what it is supposed to do in the long run. This is a common theme with interference with the free market.