Government currently owns most airports, controls security screenings, and manages air traffic control.  But did you know that it also controls who flies first class?

Currently, undercover Federal Air Marshals sit first class, but the Air Transport Association (ATA), a trade group representing airlines, has asked the government to consider having them fly coach instead, saying they can’t justify the costly accommodations given the low security threats.

This ill-considered federal policy disrupts a key industry that accounts for up to one percent of our country’s GDP.  Sadly, this is just the latest in a string of harmful regulations on the airline industry, which continues to be a major target for government intervention.

Since 9/11, airport security measures have dramatically expanded.  Security lines, random bag searches, potentially offensive full-body scanners, and other initiatives cost billions of dollars and an unknown amount in lost productivity.

However, all that “security” is not all that secure. According to articles by the BBC, Time, and Discover Magazine, pat-downs do not detect devices stowed in bodily orifices and invasive body scanners do not detect liquid, the most common form of explosives used by airborne terrorists.  The Wall Street Journal notes that hardened cockpit doors and a trend of terror threats coming from coach class hint that deterrence may not be the main reason that federal marshals fly first class.

Despite evidence questioning the effectiveness of these expensive security initiatives, government officials have continued to roll them out.  Added measures contribute to the façade of security at an untold total cost to consumers’ time and money.

In the Financial Times this week, European airline officials publicly challenged U.S. security measures.  Martin Broughton, British Airways’ chairman, stated that “quite a number of elements in the [U.S.] security programme [are] completely redundant,” and even deemed some of them malevolent.

When it’s the Europeans calling for more freedom, there’s pretty good reason to think the U.S. is on the wrong side of things.

To have the entire airline industry belabored by government inefficiency is a drag on the economy.  According to MIT’s Airline Data Project, the domestic airline industry lost $30 billion in 2009, after the Transportation Security Agency (TSA) began implementing new so-called security programs.

While additional security measures are to blame for much of the congestion in the airline industry, air traffic control systems contribute arcane technology to the equation.  In just the past year, potentially dangerous mistakes by air traffic controllers have increased by 51 percent, and that figure is an admittedly low estimate, says the Washington Post.

Even the proposals for government-sanctioned improvements smack of waste and delay. The Federal Aviation Administration (FAA) projects the overhaul of its obsolete radar system to a GPS-based system will not be complete until 2025 — eons for an industry with rapid evolution, attrition, and slim profit margins.

Business relies heavily upon air travel to optimize growth and adapt to shifting economic climates.  Waiting a decade and a half for proposed improvements will cost much more per year than the $32.9 billion the ATA calculates airport delays alone cost the U.S. economy.

In fact, the Government Accountability Office has documented a long history of cost overruns and implementation delays for new FAA programs and other federal airport initiatives. There’s no reason to think the story will be different this time around.

Other countries have faced similar obstacles and have succeeded by transitioning to private management of airways — such as in India, Kenya, and even China.  Letting the private sector take over allows competition and profit-based decision-making to direct resources.  It also eases the public burden by transitioning risk to investors who must absorb losses, rather than passing the costs on to taxpayers.

According to the November 2010 edition of Reason Magazine, dramatic privatization reforms led to budget surpluses in New Zealand, where the government’s share of GDP once stood at 45 percent.  Maurice McTigue, a former member of the New Zealand parliament, says that after the government sold its stake in the airline industry and other industries, “productivity went up and the cost of their services went down, translating into major gains for the economy.”

Government involvement also occludes the flow of knowledge, allowing airlines to dodge accountability by blaming regulations and bureaucratic processes.  Removing government would streamline the consumer feedback mechanism, incentivizing strong security while causing good companies to rise and bad companies to fall.

Beyond having Federal Air Marshals downgraded to coach, the public should recognize that the government is clogging up the airways, costing the entire economy billions of dollars, and standing in the way of industry evolution.

Privatization reforms have proven to work.  And industry players have stepped up with a willingness to take on such responsibility.  All that is needed is for government to get out of the way.

Chip Bishop is George Mason University economics graduate student and a think tank professional in Washington, D.C.