The Federal Aviation Administration has now lifted the restriction it had imposed on U.S. flights in and out of Israel's Ben Gurion International Airport. The imposition of the flight ban had inspired intense criticism; Michael Bloomberg, who flew to Israel to demonstrate his point, called it "poorly thought out':
By prohibiting U.S. carriers from flying into Ben-Gurion, the FAA handed Hamas a significant victory -- one that the group will undoubtedly attempt to repeat. The FAA has, regretfully, succeeded only in emboldening Hamas....Stopping flights to Israel is not only unnecessary to protect American lives but also counterproductive to advancing the U.S.'s interest in marginalizing Hamas and bringing peace to the region.
A statement from the American Israel Public Affairs Committee, the pro-Israel lobbying group, called the FAA travel ban "overly harsh and excessive" and said it sends an "entirely wrong message."
It sounds like a foreign policy or airline safety issue. But it's also a perfect example of the problems with centralized, top-down regulation rather than private-sector competition. The statist approach is to have the government decide for all U.S. carriers whether to fly to Israel. A market-based, Hayekian approach is to let each airline decide for itself. Maybe some airlines will decide to let caution prevail. Others may want to send a message to customers that they support Israel and will not be deterred by the terrorist threat. Others, in consultation with their insurance carriers, may raise prices on flights to TLV to cover the cost of the risk. Or they may choose to invest in installing technology that better protects planes against incoming rockets or missiles. But when the government makes one decision for all the airlines, it deprives consumers of the choice to travel and it prevents consumers from benefiting from competition.
In some cases, the regulated companies may prefer the centralized approach. The airlines may not want to compete on safety or on how easily scared they are; they just want to compete on in-flight movie selection or the snazziness of the outfits worn by the flight attendants. But the issue shouldn't be what the airlines want. If it is, the regulators have been captured. The issue should be what is best for consumers, and there is a strong case that what is best for consumers is a market-based approach that lets airlines decide for themselves whether to fly to Israel, not a Washington-based approach in which the government decides and dictates that decision to the airlines.