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I agree with your take here. I think what regulation here means in practice is that the airlines will curb their riskiest behaviors that can lead to mass-cancellations. This could perhaps lead to a small uptick in prices, but these behaviors actually have fairly limited margin and cost benefit so I would not expect a huge impact.

Instead airlines have to worry about "mass outrage" situations like Southwest dealt with last year that probably cost them more than complying with a reasonable regulation that would be likely applied - a downside for airlines and consumers.

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