- Frontier/Spirit merger will increase airline competition
- Eliminating the North Atlantic tracks
- New airlines link smaller airports to popular destinations
- Europe’s slow progress on Single European Sky
- Legal scholars debate approach to drone law
- News Notes
- Quotable Quotes
Critics of the proposed merger between ultra-low-cost carriers (ULCCs) Frontier and Spirit came out of the woodwork before the ink was dry on the Feb. 7 news release. Antitrust supporters, like Diana Moss of the nonprofit American Antitrust Institute, fear that this further “airline consolidation” would lead to less real competition, especially at leisure destinations like Las Vegas and Orlando, which are important hubs for both airlines. And Sarah Miller of the “anti-monopoly advocacy group” American Economic Liberties Project expressed doubts about any cost savings for customers.
Sens. Bernie Sanders (I-VT) and Elizbeth Warren (D-MA), joined by Rep. Alexandria Ocasio-Cortez (D-NY), sent a letter to Transportation Secretary Pete Buttigieg and Assistant Attorney General Jonathan Kanter urging a scrupulous review and action to prevent the merger “if you determine it will threaten competition in the airline industry.”
Let’s take a close look at what the merger would do regarding airline competition. Together, the merged carriers would have about 8% of the U.S. airline passenger market. Moss focused especially on Las Vegas and Orlando, both served by Southwest in addition to the two ULCCs. The combination of Southwest and the merged ultra-low-cost carrier would exceed 50% of flights at those two airports. But neither airport is “capacity-constrained,” and Allegiant (the third prominent ULCC) has its largest base in Las Vegas. If the antitrust division is going to consider ULCs and ULCCs at 50% as a threat to competition, let me suggest a few more-worthy targets. How about fortress hubs, such as:
- Atlanta Hartsfield-Jackson Airport (ATL), where Delta has an 80% market share;
- Dallas/Fort Worth International Airport (DFW), where American has 86.5%;
- Newark Liberty International Airport (EWR), where United has 58.5%;
- And Baltimore/Washington International Thurgood Marshall Airport (BWI) where Southwest has 71.8%.
In fact, since there is open entry at nearly all U.S. airports (including those four), I don’t see those situations as throttling competition (and in fact, Spirit already provides a competitive force at all four). But this certainly puts claims that the merger would throttle competition into perspective.
But there’s more than just debunking anti-competition claims. In fact, respected aviation attorney Ken Quinn told Airport Business Editor Joe Petrie that with the merged airline’s orders for a combined 300 new aircraft, it would likely continue expanding into new markets served by the big four (legacy) carriers: American, Delta, Southwest, and United. Empirical studies find that the entrance of a ULC or ULCC into a legacy airline market leads to fare decreases by the latter airlines—which is one of the primary benefits of competition. And as Ben Goldstein and Lori Ransom explained in Aviation Week, financial analysts are generally bullish on the planned merger.
The historic Airline Deregulation Act of 1978 ended government allocation of airline routes and generous price controls that allowed the regulated carriers to pass through costs, rather than seeking efficiencies. In those days, since fares were so high, only the relatively wealthy could afford to fly, and load factors were around 50%. While deregulation was painful for those legacy carriers that could not adapt to a free market (Braniff, Eastern, National, Pan Am, TWA, etc.) it was of huge benefit to ordinary Americans and came to be dubbed “the democratization of air travel.”
The Frontier-Spirit merger would yield a more-robust ultra-low-cost carrier to bring competition and lower fares to more routes and more air travelers. For that reason, it should be approved.
As most readers of this newsletter know, air traffic controllers in oceanic airspace have had to rely on “procedural” separation, since there is no radar coverage there (or in polar and many mountainous regions). Aircraft reported their estimated positions (based on inertial navigation) to controllers every 14 minutes. This rather inexact system led to requirements for wide spacing laterally (wingtip to wingtip) and longitudinally (nose to tail) as a precaution against aircraft inadvertently getting too close to one another.
To take into account the jet stream—strong high-altitude winds blowing from west to east, which can speed up flights heading east and slow down those heading west—back in the 1960s aviation organizations devised the North Atlantic Organized Track System (OTS). Every day, based on the latest forecast of the jet stream’s path and wind speed, up to 12 parallel tracks were created at the most favorable altitudes and provided to pilots via the relevant air navigation service providers—in the North Atlantic, Nav Canada for the western half and NATS for the eastern half.
Since 2019, Aireon’s space-based ADS-B system has provided air navigation service providers (ANSPs) with each flight’s position update every 7-8 seconds—a huge improvement over the previous every 14 minutes. Once controllers and pilots were used to this, the ANSPs gained permission (from the International Civil Aviation Organization—ICAO) to begin reducing the required separations between aircraft—most recently from 40 nautical miles fore-and-aft to just 14 nm. And lateral separations were reduced from 23 nm to 19 nm. These changes meant that more parallel tracks could be offered, and each track could hold more aircraft at any time. And that means many more flights each day could get the best altitude for whichever set of parameters they want to optimize, such as minimizing flight time or minimizing fuel burn, or some combination.
In a February blog post, Jacob Young of NATS explained what is now in prospect: abolishing the Organized Tracks altogether. The large decrease in North Atlantic flight activity in 2020 (from as many as 1,700 per day to as few as 200 on some days) enabled NATS and Nav Canada to experiment (again, with ICAO permission). In 2021, with traffic as low as 500 per day, they tried not offering any organized tracks—i.e., letting each operator select the route and altitude that would best meet its objectives. Young reports that this option was in use on 20 days last year with no westbound organized tracks. NATS is currently using data from those trials to enable simulation of “OTS Nil” on higher-traffic days, as North Atlantic air traffic gradually builds back. In addition to feasibility, the simulations will estimate reductions in flight time, fuel burn, and CO2 emissions. Young reports that a recent airline study found that every minute saved crossing the North Atlantic saves it £51, so a 20-minute saving would exceed £1,000.
As an initial step, NATS announced that as of March 1, any aircraft flying at 33,000 feet or below will be able to fly “entirely free from the OTS structure.” His blog post is here.
Three new low-cost carriers are following variations on a common theme: connect secondary airports nonstop to desirable destinations. That’s the model being introduced by Avelo, Breeze, and Norse Atlantic (internationally). If they succeed, these second-generation ultra low-cost carriers will boost some local economies and bring affordable air travel to many more people.
Avelo, which began service last year on the west coast out of Hollywood/Burbank (BUR) mostly to resort destinations, has defied skeptics by opening an east coast base at New Haven (HVN) from which it continues to expand air service. In February it announced four new destinations from there: Charleston and Myrtle Beach, SC, Savannah, GA, and Nashville, TN. Introductory fares start at $49 one-way, with service to begin May 5. Early this month Avelo announced its first Midwest destination from New Haven: Chicago Midway. That service will begin on May 26, with an introductory one-way fare of $69.
Much larger Breeze Airways has a similar business model. Though already operating from Bradley Field (BDL) in Hartford, CT, in February it announced that BDL will be its fifth base of operations and will add eight new destinations to the four it already serves from there. As of mid-February, Breeze was already serving 18 cities in 14 states, including recent additions New York/Islip and West Palm Beach. Other points already served from Bradley Field include Charleston, SC, Columbus, OH, Norfolk, VA, and Pittsburgh, PA. On March 8, founder and CEO David Neeleman announced plans to add 35 more routes to the 35 already being flown, including cross-country flights using its new, longer-range Airbus A-220s. Among the new services will be San Bernardino (SBD) to San Francisco (SFO), marking the first scheduled airline service ever from SBD, the former Norton Air Foree Base. Unlike Avelo, which uses 737s on all its routes, Breeze is building a two-aircraft fleet, consisting of medium-range 118-passenger Embraer E-195 and the longer-range Airbus A-220.
The third new airline is Norse Atlantic, a startup based in Oslo, Norway. The business plan is to offer low-fare transatlantic flights from Oslo to airports such as Fort Lauderdale (FLL), Ontario (ONT) in the Inland Empire portion of greater Los Angeles, and New York Stewart (SWF). Once Oslo routes are established, Norse plans to also serve Paris and London (via Gatwick—LGW). Initial routes are now planned to launch in June, and the airline will use Boeing 787s that formerly belonged to Norwegian Air Shuttle (whose low-fare transatlantic service failed to be viable). I don’t know how many Americans want to visit Oslo, but it’s likely that many Norwegians would like to visit Los Angeles, Florida, and New York.
In December, Airlines for Europe (A4E) blasted European Union decision-makers for foot-dragging on the two-decades-old project to create a Single European Sky (SES). Although Europe has twice as many high-altitude control centers as the United States, it has less air traffic. That means air traffic control costs about twice as much per mile in Europe as it does in the United States. A4E correctly links air traffic control streamlining with reducing aviation’s carbon footprint. As Helen Massy-Beresford reported, serious progress on SES is “a significant opportunity to cut aviation emissions without limiting airlines’ activities.” (“Airlines Criticize Slow Single European Sky Progress,” Aviation Daily, Dec. 13, 2021)
There is incremental, fragmented progress involving two key concepts: (1) virtual centers, currently being pursued by Swiss ANSP Skyguide and being researched by DFS, PANSA, and NATS, and (2) free route airspace, which individual ANSPs and two overlapping ANSP alliances are pursuing. I’ve discussed virtual centers in previous newsletters, so this article provides an update on free route airspace (FRA). As is emerging on the North Atlantic (see the previous article), the idea is to remove historic high-altitude flight paths linked to ground-based navigation aids and allow aircraft operators to request and fly more direct, fuel-saving routes. The main benefits occur for routes that overfly multiple countries whose ANSPs have jointly embraced FRA.
France’s DSNA and Italy’s ENAC have embraced free route airspace, but in each case for their country only, thus far. ENAC began its project in 2018 and announced in December 2021 that it is now operational across all of Italy. DSNA has implemented FRA at three of its five centers as of the end of 2021, covering about half the country’s airspace. But neither is in a multi-country free route airspace alliance.
There are two such alliances currently in operation: iTEC with seven members and Borealis with nine. Only two ANSPs belong to both: Norway’s Avinor and the UK’s NATS. The idea behind iTEC is to have its members all adopt the same high-altitude air traffic management system, which enables managing free route airspace. Their choice is iTEC 4.0, developed by Indra, which has helped bring this coalition together. Besides Avinor and NATS, its other members are Germany’s DFS, Spain’s ENAIRE, LVNL of the Netherlands, Poland’s PANSA, and Lithuania’s Oro Navigacija. Progress varies among the members, with ENAIRE recently announcing that all five of its en-route centers are now equipped and operating with iTEC 4.0.
Borealis Alliance members, in addition to Avinor and NATS, include EANS (Estonia), Finavia (Finland), IAA (Ireland), ISAVIA (Iceland), LGS (Latvia), LFV (Sweden), and Naviair (Denmark). As a member of both alliances, NATS recently announced that it has implemented FRA for its portion of the North Atlantic, the North Sea, Northern Ireland, Scotland, and a small portion of northern England—together representing one-third of the airspace the UK is responsible for.
Aviation Week’s Thierry Dubois recently reported that when free route airspace is fully implemented across Europe, an estimated 10,000 metric tons of CO2 per day will be eliminated. That amounts to 2% of European commercial air transport’s emissions, a building block toward the goal of 10% reduction due to improvements in air traffic management and operations by 2050—not to mention savings in time and fuel. (“Free Route Airspace Gains Ground in Europe,” Aviation Daily, Dec. 9, 2021)
On Feb. 18, the Law & Economics Center (LEC) of the Antonin Scalia Law School at George Mason University held a webinar that sought to answer the question, “Can Common Law Adjust to a Drone World?” Law professor and LEC Deputy Executive Director Donald J. Kochan moderated a panel featuring Joshua S. Turner, a partner at D.C. law firm Wiley Rein; Prof. Hilary Farber of the University of Massachusetts School of Law; and Prof. Troy Rule at Arizona State’s Sandra Day O’Connor College of Law. A recording is available here.
Turner co-authored the recently-released study Torts of the Future: Drones for the U.S. Chamber of Commerce’s Institute for Legal Reform. His position is most common among aviation lawyers in general and lawyers specializing in drones in particular. It could be broadly summarized as believing that the Federal Aviation Administration’s traditional uniform airspace authority should be maintained and that the common law can evolve to address novel small unmanned aircraft system (sUAS, which are drones weighing less than 55 pounds) technologies without the imposition of radical new legal doctrines for privacy, trespass, and negligence torts that may arise from sUAS operations.
In contrast, Tony Rule called for sweeping changes to airspace governance, rejecting FAA’s uniform authority and arguing for devolving the management of near-surface airspace to landowners, subject to state and local property law and regulation. Rule shares this position with Brent Skorup of the Mercatus Center, whose proposals have been previously discussed in this newsletter (“Are Airspace Property Rights the Way Forward for Drones?” Dec. 2020), as well as companies such as AirMap, which develop and market UAS airspace authorization software.
Under this proposed framework, the right to exclude others from the immediate reaches of your property would be enshrined and expanded. It would, according to Rule, allow for the development of airspace zoning regulation, similar to exclusionary land-use zoning that has existed in the U.S. for a century. This would presumably greatly increase the demand for more- sophisticated sUAS authorization software, because instead of requiring a single authorization per sUAS flight operation—which happens now through FAA’s Low Altitude Authorization and Notification Capability (LAANC)—each sUAS operation might require dozens, hundreds, or even thousands of authorizations from landowners, municipalities, counties, states, and/or FAA for every parcel of land in every jurisdiction overflown by the sUAS.
Rule said his proposal would soon be published by the Mercatus Center and that it involves blockchain, reverse auctions, and other innovative technologies and mechanisms to minimize the transaction costs associated with obtaining advance permission to fly over each individual backyard in America. Revolutionary technology would surely be required to implement such a revolutionary approach. Unfortunately, U.S. policymakers cannot crib from successful international case studies—there are none—and the U.S. experience with deploying modern airspace management technologies, practices, and governance for conventional aircraft leaves much to be desired, as readers of this newsletter are well aware.
Farber’s position lies between those of Turner and Rule. In reviewing cases involving alleged drone torts, she found gaps in common law remedies that primarily arise from sUAS technology having abilities for continuous surveillance and privacy-violating conduct that didn’t exist with earlier technologies. Farber identified the 2015-2016 legislative session as marking a dramatic shift away from focusing on government misuse of sUAS and toward potential problems associated with private use. This coincided with an explosion in sUAS sales and complaints about hobbyist misuse, as well as FAA’s Dec. 2015 emergency rule requiring marking and registration of sUAS used recreationally (that rule was subsequently struck down in 2017 in the D.C. Circuit Court of Appeals in an opinion written by then-Judge Brett Kavanaugh and then reissued under an explicit authorization from Congress).
By 2017, more than 40 states had proposed or enacted drone-specific legislation. Since then hundreds of bills have been introduced at the state and local level on sUAS, with the vast majority of them aiming to prohibit flight operations that are currently legal under federal law. Despite this flurry of legislative activity, Farber argued that the new drone laws generally fail to address the identified gaps present in common law, including: What is the reasonable expectation of privacy? How does this interact with the constitutional right to gather news? How are airspace rights defined?
Farber concluded with a point of agreement among the panel: all of this state and local legislative and regulatory activity may be overshadowed by FAA preemption should FAA move to occupy the policy field. Many of these outstanding questions could be answered through more detailed federal policy. The most next likely opportunity for Congress to address these murky sUAS legal issues would be in the FAA reauthorization due by the end of Sept. 2023. But until federal preemption issues are resolved, said Farber, “this preoccupation will remain front and center with lawmakers at the state level.”
U.S. Domestic Air Travel Bookings Exceed 2019 Level
Data from the Adobe Digital Economy Index from six of the top-10 U.S. airlines show that Americans booked $6.6 billion worth of airline trips in February, which is six percent more than the figure for Feb. 2019. The company reported that the number of domestic bookings was also above the 2019 level for the first time. The most popular destinations were resort locations.
Boring Company Wins in San Antonio
The proposal from Elon Musk’s Boring Company to build a twin-tunnel route between downtown San Antonio and its airport was selected over a proposed elevated rail route from a group headed by SAK Construction. The Boring Company proposal resembles the system it is building in Las Vegas, transporting passengers in Tesla vehicles. The company estimates the cost at between $247 million and $289 million.
First International Location for TSA PreCheck
TSA PreCheck members flying back to the United States from Nassau, Bahamas got some good news last month. TSA has added a PreCheck lane to the security screening area at Lynden Pindling International Airport. Nassau is the program’s first non-U.S. airport with PreCheck, and this brings the total number of airports with this service to 200. Nassau is also one of 16 overseas locations where returning Americans can pre-clear U.S. customs and immigration before departing for home.
First Virtual Ramp Tower Headed for Kansas City Airport (MCI)
Remote/digital tower pioneer Saab has won a contract from the Kansas City Aviation Department for a Virtual Ramp Control System for the airport’s New Terminal, now under construction. The system will include two centralized camera houses plus additional distributed cameras, along with Saab’s Aerobahn Collaborative Decision Making software. The VCRS will enable airport ramp controllers to better manage aircraft moving between the airport’s movement area (controlled by FAA) and the “non-movement area” controlled by the airport. The contract includes installation of the system and five years of ramp control services.
Battle Over New Lisbon Airport Slots
As a condition of the Portuguese government bailout of ailing TAP Air Portugal, the airline agreed to give up 18 slots at Lisbon Airport (LIS). A bidding process for the slots is under way, to be wrapped up in April. However, the slots would not become available until the winter 2022/23 season in late October. Ryanair wanted the slots to be available for this summer; when that request was denied, on March 11 Ryanair said it would cancel 19 routes from LIS this summer, resulting in 5,000 fewer flights. But those routes will return in the winter season, since Ryanair has enough slots for that season.
SpaceX Will Launch Competitor’s Broadband Satellites
OneWeb’s broadband satellites have all been launched into orbit by Russian Soyuz booster rockets—until now. On March 3, Roscosmos told the company it would launch no more OneWeb satellites unless the company agreed that (1) there would be no military uses of the satellites and (2) the U.K. government would sell its minority stake in the company. Those terms were unacceptable, but on March 21, OneWeb announced an agreement with SpaceX to launch the remainder of the company’s constellation, with the first launch to occur sometime this year. As of this month, OneWeb had launched 428 of its planned 648-satellite constellation.
Fort Lauderdale Planning Airport People Mover
Broward County has announced the design phase for a $600 million elevated people mover to serve the Fort Lauderdale/Hollywood International Airport (FLL). It will use a $12.95 million grant from Florida DOT for the design study. The overall plan would not only link the four terminals and parking structure but would be extended to reach the nearby Port Everglades (numerous cruise ships) and Convention Center. At some point, it might also include a station on the nearby Brightline passenger rail line. But first the county government will have to figure out where to get the remainder of the estimated $600 million cost.
Increased Low-Cost Carrier Access to Newark Coming Soon
On Feb. 25, U.S. DOT finalized its decision to open up former Southwest Airlines slots at EWR to low-cost and ultra-low-cost carriers, “to help address competition issues at the airport.” DOT Secretary Peter Buttigieg said that “This decision to open up access at Newark means lower fares and more choices for the traveling public.” The agency apparently plans to award all 16 slots to a single airline.
Burbank Airport Challenges California High-Speed Rail
The Hollywood/Burbank Airport has filed an environmental lawsuit challenging the system’s plan for tracks and an underground station on the airport’s eastern boundary. The suit was filed in response to the High-Speed Rail Authority’s environmental impact report on the yet-to-be-funded 13.7-mile segment between Burbank and downtown Los Angeles. The suit argues that the environmental study failed to consider how the construction would impact the airport, including its safety. Also objecting to the report is the Burbank City Council.
Multinational ANSP Wins Space-Based ADS-B Award
ASECNA, the ANSP for 18 member states in Africa, contracted with Aireon to provide radar-like surveillance over the 16.1 million square kilometers for which it is responsible. The project was the 2021 winner of the World ATM Conference “Maverick Award” in the “collaboration” category. Congratulations, ASECNA!
Federal Air Marshal Service Is 60 Years Old, Says TSA
The March 2 news release surprised me, but I guess it’s true. In 1962 the first 18 Sky Marshals were sworn in by Attorney General Robert Kennedy. In those pre-TSA days, the Sky Marshals were part of FAA, which had regulatory authority for aviation security. Following creation of TSA in 2001, the Sky Marshals became Federal Air Marshals under the TSA’s umbrella.
Berlin Brandenburg Opening Its Second Terminal
As this issue of the newsletter was being written, on March 24 Berlin Brandenburg Airport (BER) was scheduled to open the second of its two new terminals. T2 is connected to the operational Terminal 1 via two bridge walkways. The train station beneath Terminal 1 links the airport to Berlin itself. Ryanair is the main carrier serving Terminal 2 as it begins operations.
Southwest Plans Expansion of Hobby Airport Terminal
In 2015 Southwest began international service from the terminal at Hobby Airport in Houston, covering two-thirds of the $156 million cost of adding five gates. It is now planning to add seven more, six for domestic flights and one common-use international gate. As of now, how much of the $250 million cost Southwest will cover has not been disclosed.
U.S. Airports Dominate World’s Top Airports by 2021 Passengers
A dramatic illustration of the faster air travel recovery in the United States is shown by figures from CAPA Center for Aviation and Aviation Week Intelligence Network. All but one of the global top 10 last year were U.S. airports, with Hartsfield-Jackson Atlanta International in its usual first place; the only non-U.S. airport was Guangzhou Baiyun International in China at #8. By contrast, in 2018 Flight Airline Business reported that seven of the world’s top 10 were non-U.S., including Beijing (#2), Dubai (3), Tokyo Haneda (5), London Heathrow (7), Hong Kong (8), Shanghai (9), and Paris de Gaulle (10).
RTCA Interview with Robert Poole
As a follow-up to the February webinar I did with RTCA on ATC technology, on Feb. 28 I recorded a video interview with Executive Director Terry McVenes discussing three key aviation topics, including the challenge posed by global climate change. If you’d like to watch, it is available online here.
“[Some] companies don’t have a real, plausible design or certification wherewithal and yet are able to attract a lot of money because their story is good. And that gets convoluted with companies who have the wherewithal and perhaps speak a more modest truth. I’m not going to start a company today and claim that in two years I’m going to be certified. Rather, it’s going to be a company that’s been working for 6-10 years and that maybe in 2-4 [more] years can be certified. But the truth gets lost in the hype. And part of that is this capital that’s out there looking for where to invest. And since it’s really hard to tell who is real, anyone with a plausible story is funded, which is absolutely amazing.”
—Roei Ganzarski, in Graham Warwick, “Electrifying Revolutionary,” Aviation Week, Feb. 21-March 6, 2022
“Unfortunately, the FAA eschewed the NTIA [National Telecommunications & Information Administration] process and declined to tap NTIA technical experts. Instead, FAA turned to outside analysts who concluded that 5G could jeopardize aviation safety but whose analysis had serious flaws. In its March 2020 Order, the FCC criticized the first FAA-commissioned study, by the Aerospace Vehicle Systems Institute (AVSI), for using scenarios that assumed transmitter emission levels in excess of what the FCC’s own rules permit and for using an interference test that was triggered by other sources on the plane even before the simulated 5G signals were turned on. A second study, by the Radio Technical Commission for Aeronautics, which used inputs from the AVSI study, had similar methodological weaknesses. When the Department of Transportation and the FAA finally went to NTIA in December 2020—asking it to engage with the FCC to defer the auction scheduled for later than month—they got the silent treatment. NTIA had a leadership problem. The agency was on its third acting administrator, its last Senate-confirmed head having been fired in May 2019.In addition, then-acting chief Adam Candeub said later he did not act on the request because FAA’s interference analysis was so flawed.”
—Dorothy Robyn, “Hard Landing: Why the 5G Rollout Was So Contentious, and What We Can Learn From It,” Brookings Institution, Feb. 2, 2022