Showing posts with label deregulation. Show all posts
Showing posts with label deregulation. Show all posts

Saturday, July 31, 2010

How far we come


In yet another cost saving measure, the airlines continue to fall from the elegant means of travel to flying cattle cars.

"Just in time for the summer airport onslaught, Continental Airlines has decided to test what they call self-boarding, and what we call DIY air travel. Once travelers at Houston Intercontinental Airport swipe their ticket, a turnstile door will open to allow the passenger entry into the airplane. While automated boarding does not require the human touch, an attendant will be on hand to deal with the usual customer service problems.

And we can imagine plenty of problems. Does anarchy rule in this experiment? No longer will passengers be called by row or color-coded boarding pass. Instead, they'll be expected to make a dash through a turnstile. Amazingly, the TSA is onboard, as it were, with self-boarding. The practice is already in place at many international airlines, like Air France and Air New Zealand. You'll be glad to know that human pilots are still required to fly the plane. For now."

Airlines were once glamorous and air travel was elegant and sophisticated. Deregulation in the 1980s was supposed to bring competition to the airline industry and savings to the passenger. Instead as each company tried to undercut its competitor, fewer and fewer perks could be offered to the passengers. Rising fuel costs and increased ramp fees further reduced passengers incentives as the price of the ticket could not be raised without risk of losing the passenger to a competitor.

In my opinion, another important factor was the transition from stewardesses to flight attendants. The intent was to take the stewardess from an idealized position available only to attractive, slim women and open it up to everyone. In the name of equality, this was a necessary step but it carried an unintended consequence. Stewardesses were selected on looks and charm. Stewardesses conducted themselves as ambassadors for the airlines. The switch from stewardess to flight attendant eliminated discrimination based on looks and gender but it also eliminated some of the mystique which added to the travel experience.

Before I get hate mail, think about it this way. Anyone who meets the basic physical and aptitude requirements can join the military but only a select few can become a Navy SEAL. Both the engine mechanic and SEAL are proud to serve but which position holds mystique?

Stewardesses were glamorous and insured the passenger was comfortable as well as safe. Flight attendants became employees and while they are just as professional, there was something lost. There is a certain indifference now with most of the flight attendants. Many seem grim or tired which is another unintended consequence of modern air travel. Gone is the glamour and now flight attendants are just employees like the rest of us.

Of course the biggest change to airlines has been 9/11 and our friends at TSA. If air travel had become less glamourous over the last 20 years, the TSA has made it down right grueling. Long security lines with surly TSA personnel sets the tone for the rest of the experience. No one seems to think anything now of having to arrive two hours early for a flight that may not even last one. Flight attendants, already salty because of long hours and poor working conditions, now have to play cop and determine if the passenger is a security risk or just rude. Either way, the rest of us lose.

Air travel will not become the glamorous experience it once was. We are one more terrorist attack away from the few remaining airlines to go under. Hopefully other means of public transit, such as rail, will be revitalized as a result.

Wednesday, June 17, 2009

Deregulation and the Airlines

Back in February, Continental Connection Flight 3407 crashed outside Buffalo, NY last February killing all on board. Preliminary reports indicate the two pilots were relatively inexperienced and failed to realize how dangerous flight conditions had become.

The crash brought to light how little new pilots are paid, especially those who fly for commuter airlines. It has been the practice for major airlines to pay new pilots very little for the first three years. The thinking for the major airlines was to screen out new pilots that wanted the glamour but did not want to put in the long hours.

Smaller carriers do not have large operating budgets to attract pilots with high-hours. Newer pilots needing flight time usually look to getting on with a commuter airline and working their way up to the majors.

Deregulation brought about some unintended consequences. Instead of creating more competition, deregulation created opportunity for certain carriers to buy up their competition. (The same argument had been made for the break up of Standard Oil. Seven new oil companies were created only to form back together again under BP and Shell.)

The legacy carriers, in buying up their competition, did not reduce competition as much as they added to their debt. The legacy carriers failed to see the consequences of increasing their debt in the face of an aging workforce. As pilots, flight attendants and other personnel received pay increases or retired, the airlines saw more of their profits going into benefits rather than operations. In-flight services were first cut then eliminated. Routes were scaled back opening more opportunities for start-up carriers and commuter airlines creating a whole new set of competitors.

The addition of these newer, cheaper airlines meant the legacy carriers had to lower their airfares in order to remain competitive. Keeping fares low was good for the consumer but caused the airlines to operate on slimmer profit margins. Spikes in fuel or maintenance costs could not be quickly absorbed without shutting down routes or laying off employees.

The smaller carriers faced the same issues but with slightly different consequences. Taking over less profitable routes from the major carriers meant more business but they did not have the large operating budgets to pay their personnel competitive wages. Younger, less experienced personnel would have to be hired to fill positions. As the personnel became more experienced, they would inevitable apply to one of the major carriers in hopes of making better wages.

Smaller carriers were not immune to higher fuel costs, higher maintenance costs, or increase gate fees at airports. This meant smaller profits for these carriers that in turn were limited to how much they could offer their personnel in wages. Increasing wages and benefits in an industry with narrow profit margins means something else has to be eliminated. In flight meals were eliminated. Ticket kiosks replaced counter personnel. Checked bags are now routinely charged. Carry-on bags are probably next.

If we want to really address the cause of the crash, we need to look beyond just the aircrew and what is going on in the airline industry as a whole. The industry needs to be seriously revamped or we will continue to see more accidents.