RAMSHACKLE AIRLINES

Posted in Rants on December 19th, 2011 by Ed

Many Americans below the age of thirty would probably be shocked to learn that the federal government used to control the entire airline industry. And when I say "control" I don't mean in the abstract; an agency called the Civil Aeronautics Board, which in 1967 was integrated into the Department of Transportation, determined which airlines would service each route/destination and set passenger ticket prices that were standardized across the industry. Consequently the industry was dominated by a small number of very large operations – Pan Am, TWA, Delta, and so on. The Airline Deregulation Act of 1978 changed all of that, of course, and set the stage for the bankruptcy-riddled, shambolic industry we have today.

One thing that Congress realized when passing the ADA was that major airlines would quickly drop unprofitable routes. In order to receive highly profitable routes under regulation – New York to Chicago, or whatever – the CAB would require airlines to provide service to Joplin, MO or Saginaw, MI or some other such isolated red ink route. Absent the government mandate, Delta and United would find it in their interest to abandon such routes immediately. To prevent that from happening, and recognizing the value of having a national network of scheduled air service, Congress created the Essential Air Service (EAS). That sounds like some kind of team of highly trained covert operatives and would be a fantastic band name to boot. The reality is more mundane, though. The EAS program simply subsidized service to populous but remote locations that would not otherwise get scheduled service from airlines. This is the sole reason that passengers can fly to places like Muscle Shoals, AL and Bismarck, ND. The program is not large in the context of the federal budget, but it clocks in at a not-insignificant $100-120 million annually. (Curious to know if your airport is one of 110 in the Lower 48 that receives EAS money? Look here.)

Raise your hand if you know where this is heading.

The Essential Air Service program began in 1978 as a temporary way to help small airports survive federal deregulation. Rep. Tom Petri, chairman of the House aviation subcommittee, says the program is obsolete.

"Why should the government have to pay for all this?" asks Petri, a Wisconsin Republican.

What comes next is stupid even by the standards of modern House Republicans from rural Wisconsin:

Being from a big state, Petri is very aware that small airports are important to rural voters. What does he tell them when they complain about his plan to cut subsidies?

"Up in northern Wisconsin, a number of people weren't happy about this sort of thing," he admits. "I say well … my part of the state, Appleton, had air service and it was canceled numerous times and each time it was canceled people got together and started a new airline themselves. It's not that hard. You just need a pilot and a small plane."

Let that sink in for a moment. OK? Good.

It's important to move past the prima facie stupidity of that statement and explore its very deep ignorance of the history of the industry since deregulation. Airline startups boomed in the 1980s; I remember names like Midwest Air, Air Illinois, Midway Airlines, Chicago Air, Ozark Airlines, and ATA in my neck of the woods as a kid. A funny thing happened to these airlines, as you might have guessed already looking at that list: every goddamn one of them failed. Some of the larger ones were purchased by major carriers to serve as feeders once they could no longer survive on their own. Most of them just went belly-up and disappeared. This happens because providers that serve small markets inevitably discover that A) providing the level of service people expect from major airlines is too expensive and B) to make money you have to cut costs, well, everywhere. Cheap planes, cheap maintenance, cheap wages, cheap safety procedures…that's how you make money flying from Helena to Denver. But the funny thing about "cheap" and "airline" is that when you try to combine the two, planes have a tendency to fall out of the sky. Turns out that the deicing equipment couldn't last three months beyond its spec replacement date, and those 100 hours in the simulator didn't really prepare Captain Bob (who was working an office job six months ago) to fly an ATR at night in the snow.

But perhaps the problem is that people who don't have the decency and good sense to live near an airport that major carriers can profitably serve just expect too much. Maybe "a pilot and a small plane" is all they need. Remember, It's not that hard. To start an airline. Would-be passengers can just show up at the airport and say "Hey, can someone fly me to Minneapolis today?" Then they can clamber on board some guy's Piper Cub for a no-instrument adventure flight to the big city.

Sounds like the kind of transportation experience we should have here in this industrialized country that touts itself as the greatest, most advanced, and most economically powerful in the world.