On Aviation, Secretary LaHood Should Look to Plans From the Clinton Era

I got a very bad feeling when I saw the announcement that DOT Secretary Ray LaHood had convened a closed-door meeting of aviation stakeholders. And my misgivings only increased when I read the follow-up opinion piece by Bob Crandall and Kevin Mitchell in Aviation Daily’s Nov. 17th edition.

Crandall and Mitchell, both of whom I know and generally respect, got it wrong in this piece, both in their statement of the problem and their proposed solution. They claim that airline deregulation has been a disaster, producing nothing good except lower airfares. I guess they aren’t impressed by the dramatic reduction in accidents and fatalities over that three-decade period or the variety of new airline business models that have emerged. They also lament the loss of “well-paid jobs and a secure career” for airline employees, ignoring the fact that under the cartel conditions maintained by the CAB prior to deregulation, airlines and their employees were locked into Detroit-like wage and work-rule agreements that were no more sustainable long-term for airlines than they were for auto makers.

But what really concerns me is their discussion of “the industry,” as if all companies were knee-deep in red ink and none had viable business models. Quite a few carriers, primarily low-cost carriers, are making profits, which means they have figured out business models better suited to an environment of competition than most of the legacy carriers, still encrusted with business models that have not adequately adjusted despite three decades of competition. On the basis of this glossing over of critically important differences, they call for development of a “national air transportation policy” that would “reshape [the industry’s] future” around some kind of consensus about air transportation public policy objectives.

I respectfully disagree, and hope that Secretary LaHood’s new Federal Advisory Committee on the Future of Aviation does not adopt that grandiose central-planning approach. Instead, the members of this body would be wise to dust off two previous national commission reports, both produced during the Clinton administration. The more far-reaching was the 1993 Baliles Commission, which called for commercializing the ATC system so as to facilitate real modernization, keeping deregulation intact, relaxing restrictions on overseas investment in airlines, and promoting Open Skies initiatives. Most of that sound agenda remains to be accomplished. The other report was produced by the Mineta Commission in 1997. Narrower in focus, it called for more aggressive FAA safety programs, increasing investment in airport capacity, and a watered-down version of ATC commercialization. That report did inspire creation of the Air Traffic Organization, but its even more critical ATC funding reform recommendations remain unaddressed.

The Baliles and Mineta Commission reports should be the starting point for the new Commission. Besides highlighting the portions of their recommendations that remain to be implemented, the new body could also call for serious rethinking of the burden that poorly justified TSA regulation puts on commercial aviation. My main point is that all this ground (except security) has been well-trod twice before. There’s no need to re-invent the wheel. Let’s take advantage of the considerable research and hard thinking that’s already been done.