AIR-21 and Slots

AIR-21 is formally known as the "Wendell H. Ford Aviation Investment and Reform Act for the 21st Century". If you’re a lawyer, have infinite patience and an unlimited amount of time -- you can read the whole thing for yourself: Public Law 106-181. Otherwise, don’t bother.

Thanks to the modern miracle of computer technology, you can skim through it looking for little gems of information. For instance, if you search for the word “delays”, sooner or later you’ll come across this:

”Sec. 41718. Special rules for Ronald Reagan Washington National Airport

``(a) Beyond-Perimeter Exemptions.--The Secretary shall grant, by order, 12 exemptions from the application of sections 49104(a)(5), 49109, 49111(e), and 41714 of this title to air carriers to operate limited frequencies and aircraft on select routes between Ronald Reagan Washington National Airport and domestic hub airports and exemptions from the requirements of subparts K and S of part 93, Code of Federal Regulations, if the Secretary finds that the exemptions will--

(1) provide air transportation with domestic network benefits in areas beyond the perimeter described in that section;

(2) increase competition by new entrant air carriers or in multiple markets;

(3) not reduce travel options for communities served by small hub airports and medium hub airports within the perimeter described in section 49109; and

(4)not result in meaningfully increased travel delays. “

(Emphasis added)

I’ve tried to make the point before (several times) that Washington National is a “special” airport. At least in the eyes of Congress. You won’t find that language attached to any other airport in the bill.

The message is simple -- if you want the airplanes at your airport to run on time you have to limit the number of aircraft using the airport. You have to implement slot controls.

But for most Americans, being on time isn’t nearly as important as saving money. They’ll gladly trade a little time to save money. If they think that they can save money they’ll (unknowingly) trade away things a lot more valuable than their time. Their jobs, their towns, their kid’s future. But that’s another subject. Let’s see if we can figure out whether having slots costs the consumer money.

For the sake of argument, I’ll concede that deregulation has led to lower ticket prices (although it isn’t necessarily so .) But when you add up the costs, it hasn’t saved anybody any money.

”(f ) Grants for Reliever Airports.--Section 47117(e)(1) is amended by adding at the end the following:

(v) been designated by the Secretary as a reliever airport to an airport with 20,000 hours of annual delays in commercial passenger aircraft takeoffs and landings.''. “

I’m guessing that the threshold of “20,000 hours of annual delays” is some lawyers way of designating funds for a specific airport (or airports) without shouting from the rooftops that Senator Slick got some Federal money for his airport. Again, that’s a different story so let’s just concentrate on the number. Some airport -- somewhere -- has 20,000 hours a year in delays. Remembering my blog entry from a few days ago, some smart guy estimates that delays cost consumers $100 bucks a minute.

$100 x 60 minutes = $6,000 per hour x 20,000 hours = $120,000,000

That’s $120 million a year for one airport in 1996 dollars (when the story was written) and you don’t even want to think about how poorly the FAA counts delays. And that’s all before you factor in the salary cuts airline employees have suffered, the jobs lost, the pensions stolen and a dozen other ugly factors we could tie in.

For the crowd that believes it is more important that a business makes money than generate good jobs -- how is that working out ? According to The New York Times the airline industry lost $30 billion dollars between 2001 and 2006. We’ve got the worst of both worlds. Try this from a GAO report in 2005 (a .pdf file.)

”While bankruptcy may not harm the financial health of the airline industry, it has become a considerable concern for the federal government and airline employees and retirees because of the recent terminations of pensions by US Airways and United Airlines. These terminations resulted in claims on PBGC’s single –employer program of $9.6 billion and plan participants (i.e., employees, retirees, and beneficiaries) are estimated to have lost more than $5 billion in benefits that were either not covered by PBGC or exceeded the statutory limits. “

Did anybody factor that into the price of a “cheap” airline ticket ?

Let people keep convincing you that our aviation industry is so much better off now than before deregulation. Keep telling yourself how cheap it is. Let everybody convince you that we can increase capacity in the National Airspace System if we just wait long enough and wish hard enough. Keep telling yourself that slot controls won’t work.

Don Brown
August 25, 2008