Re-regulating the US airline industry in order to avoid future pension defaults by airlines would reverse the benefits to consumers of deregulation "and would not save airline pensions," according to a new study by the US Government Accountability Office, the research and investigation arm of Congress.The study was undertaken at the request of the House of Representatives. After filing for Chapter 11 protection, United Airlines and US Airways defaulted on their defined benefit pension plans, "costing the Pension Benefit Guaranty Corp. nearly $10 billion and pension beneficiaries $5 billion," GAO noted. Delta Air Lines also is expected to default on its pension obligations. In total, active and frozen airline plans were underfunded by almost $15 billion at the end of 2005, the agency said.

According to GAO, very few US industries have been re-regulated over the past 30 years and "the few instances in which an industry was re-regulated stemmed from inadequate competition such as occurred in the cable television industry after it was deregulated."

But the airline industry remains highly competitive. Furthermore, the pension losses experienced by airline employees "are attributable to market forces, poor airline management and union decisions and inadequate pension funding rules...These factors also led to the termination of pensions in other industries with large legacy pension costs, such as steel."

GAO believes that "increasing fares via government-imposed price floors similar to those that existed prior to 1978 would be an inefficient" way to ensure that airlines can fund their pension obligations, "especially when most airlines no longer offer defined benefit plans." The agency instead recommended broad reform to pension law.