Thursday, November 12, 2009

A Balance

I hope that you will see this item elsewhere in the news today. That means, somewhere in the mainstream, where John Q. Public sees it. It is a good, short summation of the airline industry from the Associated Press.

Unions prod Obama to fix ailing airline industry

”Airlines are offering the fewest seats to passengers, measured by available seats and distance traveled, in more than a decade. They have shed more than 158,000 full-time jobs since employment peaked in 2001 and lost an estimated $33 billion over the past decade. Thirteen airlines have filed for bankruptcy in the past two years. “

”A report last year by a government watchdog said nine large U.S. airlines farm out 70 percent of major maintenance. Overseas repair shops handled one-quarter of the work, challenging the ability of U.S. inspectors to determine whether it is done properly, the report said. “

”Major airlines have also farmed out short-haul trips to regional carriers, which now account for half of all domestic flights. Regional airlines often hire pilots with significantly less experience and pay lower wages than major airlines. Both issues have been raised in the National Transportation Safety Board's investigation of the crash of Continental Connection Flight 3407, which crashed near Buffalo, N.Y., in February, killing 50 people. The flight was operated for Continental by regional carrier Colgan Air Inc. of Manassas, Va.“

As the title of the piece says, unions are pushing for a solution.

”Ed Wytkind, the trades department's president, said the industry has become dysfunctional, and all involved are suffering. He said he'd like to see a blue-ribbon commission to recommend solutions.

"We can't keep doing things the exact same way and expect a better outcome," Wytkind said, adding that new regulation probably should be considered.“

I know that I won’t be on a panel, much less a blue-ribbon one. But I do have a solution to offer. You may have read it before.

The Solution is Slots (in 650 words or less)

”How about the dismal performance of the airline industry that is bleeding money -- even as it tries to nickel-and-dime its customers to death with charges for pillows, food and water ? Yes, appropriate slot restrictions will solve even that problem. If we limit the supply of landing slots at the nation’s busiest airports to a sustainable rate of air traffic -- sustainable even in typically poor weather -- the price of tickets will go up. “

Higher ticket prices are like higher taxes. Nobody wants to hear about them. In other words, no one wants to face reality. That’s the reason God made politicians. They'll lie to you as they do what needs to be done. Hey, it’s either that or we can continue to let a bankrupt business model torture its customers (if not kill them) while it driving worker’s pay down to minimum wage levels.

I think slots will be enough to bring some sanity to the industry. I think they will bring some stability to the industry. I think slots will allow airlines to return to profitability. I think they will prevent every guy with more money that brains from entering the industry and killing the existing airlines’ profits. In other words, I think limiting the number of landing slots at all commercial airports would be the only new regulation needed. I might be wrong. But I believe it’s the best place to start.

Regardless, I hope that you note this new initiative is brought to you by the unions. Unions, historically, have had power to keep businesses in check. Despite a 30 year war to destroy them, unions are still here. And here is proof that the message of the union busters is a lie. Unions don’t want businesses to fail. We want profitable businesses. We want them to thrive. That’s where our paychecks come from.

I wish Ed Wytkind and the AFL-CIO's Transportation Trades Department much success. I hope they can provide some balance to this “dysfunctional” industry.

Don Brown
November 12, 2009

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