Monday, March 23, 2009

Halaby: Government vs. Private

I’ve tried to rationalize the following excerpt from Crosswinds: An Airman’s Memoir with the fact that times were different. Technology has made great strides since then. But still, it sounds utterly clueless.

”One of our prosafety efforts got me into the most heated and unhappy brawl of my government career -- a decision to reduce the number of air-route traffic-control centers, which provided en route control over regions of the nation’s airspace. The primary motive was economy through higher productivity, but an important by-product was increased safety: By contracting the number of centers, we reduced the number of handoffs required for flights passing from one center’s jurisdiction to another’s -- and thus cut the chances for human error. Our goal was to eliminate eight of the twenty-nine then-existing centers. I went directly to President Kennedy with the plan. “

Perhaps, like most pilots, Mr. Halaby didn’t understand what handoffs really involved. The number of handoffs would not likely be reduced by reducing the number of Centers. Handoffs are made at each sector border -- not Center borders. Sector size is mostly dictated by traffic volume and complexity -- not which control facility happens to own the airspace. Perhaps his concern was the data transfers required between Centers. The same data has to be transferred between each sector but the process is slightly different between Centers. Or perhaps, he was pretty clueless about air traffic control.

Switching gears rapidly, I think it worth noting that the decision for the U.S. Government to build the Supersonic Transport (SST) was made during Halaby’s term. It’s more a social comment on my part. In the age when we have private companies trying to commercialize space, it’s hard to remember that government used to blatantly finance an obviously-commercial development. Anyway, the SST program ate up a lot of Halaby’s time.

That part of the private and government interaction might have changed but this part hasn’t;

” The same night after I turned the FAA over to a new administrator, Juan Trippe called me at home.

“I've prepared a definite offer of employment as a senior officer of Pan Am and I’m putting it in the mail,” he said.“

Mr. Halaby, of course, recognized the conflict of interest. He also recognized the money. He extracted a promise from Trippe that he wouldn’t be lobbying the Federal Government and hired on. Trippe, of course, broke that promise. And Halaby let him. Funny how money can massage the conscience. It’s not so funny how willing rich men are to corrupt.

Having said that, life is full of contradictions. While Mr. Halaby was lobbying...

”It also escapes me how anyone at Pan Am thought the airline could get anything out of either the Johnson or Nixon administrations -- the two greediest since World War II -- without Pan Am officers and Directors making personal political or financial contributions. Trippe wouldn’t and other top officers didn’t, for personal reasons. But it sure as hell cramped Pan Am’s Washington style... “

He turns the thought that regulation kept fares too high on its head too.

”In markets where the CAB controlled the fare structure, we often took a bath. .../... During the twelve months ending June 30, 1970, Pan Am had an operating loss of $8.7 million in the Hawaii market, which was not surprising in the view of an average yield of less than $.035 per passenger mile -- 40 per cent under the average domestic yield. This is what happens when fares are instituted at ridiculously low rates. And such fares result from the irresponsible promises made by airlines when they seek competitive route authority. “

There are many more instances that provide some insights into history. As I said earlier, the book really isn’t that good but I do have to admit I enjoyed it from a historical perspective. It was interesting to see an ex-FAA Administrator making CEO of one of America’s iconic companies. It’s hard to remember that many thought the Boeing 747 was a disaster when it first entered service with Pan Am. The views on airline deregulation are historically are the human qualities we exhibit throughout history. Our never-ending ability to be dazzled by technology. Our reluctance to accept the limitations of the same. The constant of greed.

And that’s where I’ll leave the subject. Mr. Halaby averaged $30,000 a year as FAA Administrator until 1965. He left Pan Am, as CEO and Chairman, in 1972 making $127,500 a year. Even though he was forced out by the board of directors in March of 1972, Pan Am continued to pay his salary until December of 1973. Yet, it was the stock options he was due that most concerned Mr. Halaby. There was no word as to what they were worth.

Oh, I just can’t help myself. One last fact. One of the board members for Pan Am when Halaby was kicked out ? Charles Lindberg. No word on how he voted. Mr. Halaby always liked to think that “Slim” voted in his favor.

Don Brown
March 23, 2009

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