WHEN A CARTEL IS DEREGULATED.

A Jon Hilkevitch column gets behind the mystique that was Pan Am.

Pan Am, for many years the most glamorous way to fly, folded in 1991. The airline's demise accelerated the slide toward the less satisfactory air travel we have today, said [Purdue aviation technology professor Brent] Bowen, who co-authors an annual report on the quality of the flying experience.

"Only since deregulation (of the airline industry in 1978) have we seen a heavy decline in services to go from luxury to bargain-basement travel," Bowen said. "The new show 'Pan Am' is re-reminding the public that we traded in free martinis, white linen, leg room and tea service for $7 beer, $5 nuts and $30 checked bags."

Much of the airline industry's woes stem from cut-throat competition that isn't good for the business or its customers, Bowen said.

"The basic problem of the airline industry today is that it's willing to fly people for less than it costs to operate the system," he said. "The pricing structure is not generally sustainable. That is why the airline industry is hemorrhaging cash year after year. If you cannot make a reasonable profit, you cannot deliver a quality service."

In general, economists classify the deregulation of airlines as a net gain in economic welfare, annoying changes of planes at hub airports (which makes possible faster service to most communities, because puddle-jumper flights in which a big jet would call at Madison and Waterloo and Lincoln and Denver gave way to smaller turbo-prop hops from any of Madison or Waterloo or Lincoln to a hub at Chicago or St. Louis or the Cities) notwithstanding.  There is some research suggesting that the characterization of airline markets as contestable, because an airplane is nothing more than capital with wings, was optimistic, and the major carriers were able to fortify themselves at the hub airports.

But perhaps government provision of the airports brings other complications to that analysis.

What many observers of "Pan Am" may not know, because it's ancient history, is that the makeup-and-weight checks of the cabin attendants, heck, their designer tunics, were competition in service, the only competitive option available to a firm in a price-fixing cartel, and that the size of the martini might have been a topic for discussion at the meeting of the International Air Transport Association.  I do know that the contents of a sandwich to be served in coach class became an issue, because the Earl of Sandwich's ploughman compares poorly to a Danish smorgasbord.  And Pan Am was complicit in defining the sandwich down.