The Economy | Incentives can head off travel tie-ups

It's just my speculation, but I wouldn't be surprised if airline executives had chipped in to send a big, belated Valentine's Day bouquet to Gov. Rendell.

Why? Because Pennsylvania - and more specifically PennDot and the other state agencies implicated in last week's interstate snow debacle - made a point more effectively than the airlines themselves ever could:

When it comes to preventing the kinds of screwups that left hundreds of travelers stranded and fuming in the snow and ice, more government is no guarantee of better results.

I'm not jumping to conclusions about who's to blame for last week's travel horror show. The changing mix of snow, sleet and rain that hit this region over Valentine's Day was surely going to stress even the best-prepared transportation system.

What developed already has the status of contemporary legend: Cars and trucks lined up for 50 miles along I-78, motorists stuck without food, water or fuel for up to 24 hours, people with medical conditions or children fearing for their lives in the cold.

It was eerily parallel to the situation that faced many air travelers, whose delayed flights and iced-over planes sat helpless on runways in New York and elsewhere.

Discount carrier JetBlue was particularly hard-hit. While other airlines canceled flights as the weather turned bad, JetBlue tried to keep to its schedule, a decision that backfired when its planes and passengers got stuck on icy tarmacs.

Things grew worse rather than better when the weather lifted, as JetBlue ended up with planes in the wrong cities and crews off their FAA-required schedules.

The long holiday weekend ended with the airline and its passengers in a struggle to get back to normal, while some lawmakers and activists called for new rules to punish the airlines or compensate travelers for similar episodes in the future.

Sen. Barbara Boxer (D., Calif.) called for a law giving passengers the right to get off planes that sit on the ground too long. Others want a full-fledged "passengers' bill of rights" to mandate such things as adequate food, water and working toilets.

Not surprising, airlines welcome the idea of new customer-service rules like they welcome a forecast of more ice storms.

JetBlue tried to preempt the move for legislation yesterday with its own customer bill of rights - voluntary policies such as vouchers for delayed flights and a pledge not to keep passengers sitting too long on a runway.

This strikes me as a great opportunity to start a debate about how much government should intervene in transportation and other complex, customer-sensitive businesses.

Not only do we have a perfect example of how the private sector can mess up royally, creating untold aggravation and hardship - we also have a simultaneous example of how government is capable of precisely the same thing.

So which is better? I don't know, but here's a hunch: It all boils down to incentives.

Fallible human beings make imperfect judgments. In any sector, public or private, they can fail to plan, or execute badly. No system can guarantee perfection - but the system can be designed with strong incentives to get it right.

In the case of the airlines, those incentives seem pretty obvious. Last week's chaos has already cost JetBlue millions in lost passenger revenue. Without some credible evidence that it means to improve, moreover, the airline could easily join the loads of others that went extinct over the last few decades.

Would a new set of laws add anything to those incentives? Could the government punish JetBlue any more swiftly or effectively than JetBlue's customers could if the airline flubs it again?

And while you're pondering that, don't overlook the other side. What are the incentives for PennDot? Does anything in Pennsylvania's governmental structure or political culture make the state transportation agency as sensitive to its customers as JetBlue is to its own?

If not, why not?