The F.A.A. set out to modernize air traffic control in 1981, estimating that the job would cost $12 billion and take a decade to com­plete. Twenty-seven years and $50 billion later, the agency has little to show but patchwork upgrades to existing equipment. “The tragedy in this story is that a lot of us have identified what it takes to get this fixed,” says airline consultant Daniel Kasper.

Admittedly, switching over to satellite technology is a massive project—the F.A.A. can’t just stop all planes from flying for a few months—but the bigger obstacle has been money. Currently, the agency’s operating budget comes almost exclusively from taxes on commercial plane tickets. Private jets pay a disproportionately small share, through fuel taxes, and critics say they should start contributing more. After all, those Gulfstream G-550s use the same runways andand air traffic controllers. A new proposal, backed by President Bush, would change this model and start charging all planes—commercial and private—for the burden they put on the system, with some of the extra revenue devoted to upgrading the air traffic control system. That proposal was stripped from an F.A.A. reauthorization bill now pending in Congress. The incoming administration, regardless of which political party wins, should put user fees back on the negotiating table and get the F.A.A. bill passed.

Assuming all these proposals—congestion pricing, new bankruptcy laws, and a better air traffic control system—were to magically happen tomorrow, what would the industry look like? Bad news first: Fares would go up, and consumers would have fewer choices of routes and airlines. A few carriers would probably go out of business. One possible candidate is US Airways, which right now is looking at its third trip through bankruptcy in less than a decade and might have a hard time avoiding liquidation if that happens. American and United are losing money at rapid rates, but neither is likely to disappear.

In exchange for higher fares, consumers would get better, more predictable service. Flights would—believe it or not—take off and land on time, with the exception of the occasional storm. And airlines that operated intelligently would actually make some money in the business. They could afford to invest in newer, more fuel-efficient planes, which would require less downtime for maintenance and be a more pleasant place for passengers to sit for six or seven hours (with no old sandwich crusts stuffed into the seat-back pockets). Better air traffic control would let the airlines turn those planes around faster on the ground and keep them in the air more often—which is the only place planes generate any revenue. Even small benefits would accumulate from getting rid of friction in the system. (About $4 billion is lost in wasted fuel each year simply from planes idling on the ground.)

Finally, stronger balance sheets would help improve the airlines’ credit ratings, thus reducing their borrowing costs. Those that built up decent cash reserves could use some of that money to hedge their fuel purchases, which would smooth out wild swings in prices. Right now, Southwest is the only U.S. carrier to aggressively hedge fuel. Other carriers tried similar programs in the early 2000s but didn’t have the necessary cash and had to stop. No one puts insulation in their house when they can’t afford to pay the heating bill.

You can almost hear a skeptic saying, “Yes, but shouldn’t the market decide whether all this happens?” To some extent, it already has—at least on the consumer front. Fares have crept up about 5 percent this year and are likely to keep rising. Airlines are starting to trim some of their less-profitable routes. Already about 100 small cities have been dropped from flight routes, including St. Augustine, Florida, and Santa Fe, New Mexico. Bigger destinations like Eugene, Oregon; Toledo, Ohio; and Gainesville, Florida, are facing considerable cuts in service. But so far the airlines have benefited little from these measures. They continue to burn through money at tremendous rates and still can’t charge consumers anything close to their operating costs for certain flights. Until they can charge more, and until some unprofitable flights get cut, air travel will remain a miserable experience.

Even Alfred Kahn, the dean of deregulation, says that passengers have become too used to getting cheap fares and being able to fly anywhere they want, whenever they want—especially when fuel is so expensive. “In the interim, there’s been an explosion of benefits” from deregulation, he says. “In the long run, we have to jet around less than we do now.”