Friday, December 08, 2006

Airline Deregulation

There was an article on airline deregulation recently in Time magazine. I wanted to write a letter to the editor in response but it’s those kind of things that I didn’t get to write about in my former life. The FAA sure didn’t want me to speak about it and there was no “upside” for NATCA. NATCA could take a position on it but they have enough problems to deal with, without taking on more.

Airline deregulation doesn’t work. There. I said it. It’s time somebody did. You can read a good history on the subject in Thomas Petzinger’s book Hard Landing and I’d recommend you do so. It’s an educational and enjoyable book. But the history of why we -- as a country -- decided to deregulate the airlines doesn’t change the facts. The simple fact is that it doesn’t work. We’ve spent the last 25 years proving it doesn’t.

Yes, yes. I know Milton Friedman is spinning in his grave and Alfred Kahn might join him if he reads this but neither has the perspective I have. I watched airline deregulation unfold sitting behind a radar scope. It’s simple. Everybody wants to fly to New York. Or Chicago. Or Atlanta. Pick your big city. The reason is just as simple. That is where the people are. And those people want to fly during the normal human wake-cycle. Say 6 AM to 11 PM. If you want to conduct some business, it’s compressed even further to about 9 AM to 5 PM.

If you’re a business that carries people in airplanes, that is when (and where) you fly. Oh sure, there is a market for an airline like Southwest. We just won’t be flying a Boeing 737 from California to Japan or New York to Munich. Speaking of the overseas routes, did you see where Delta has a new strategy of concentrating on overseas routes and pulling back on domestic routes ? Is it just me or does that conjure up visions of America’s past (de facto) overseas airline; Pan Am ? Let me get back on course.

The reason airline deregulation doesn’t work is runways. Or a lack thereof. It shouldn’t surprise too many people to know that demand exceeds supply in the places that count -- the big cities. Chicago’s O’Hare (ORD) is everybody’s favorite poster child when it comes to delays. In 2004, the delays at ORD were so out of hand that the U.S. Department of Transportation persuaded United and American Airlines to “voluntarily” cut back their flights by 5 percent. Regulation by any other name...

Airline deregulation has had over 25 years to work. It hasn’t. It hasn’t been a total failure but neither was regulation. Under regulation we had a strong and vibrant aviation system. Stable companies with stable and good paying jobs. Under deregulation we’ve had bankruptcy after bankruptcy. People -- our fellow citizens -- have lost their jobs, their savings and their pensions. I believe that kind of economic and social damage has to be factored into the equation when we talk about the benefits of a cheap airline ticket.

Regardless of your socioeconomic feelings or mine, a 100 airplane-an-hour airport can only handle 100 airplanes per hour. While we debate policy, the airplanes continue to circle in holding patterns waiting for a landing slot, clogging our airspace and needlessly decreasing safety margins. I’m not arguing for a return to the days of the Civil Aeronautics Board. I’m just arguing for a policy that works. Airline deregulation doesn’t.

Don Brown
December 8, 2007

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