Plane Conversations

After the justice department approved the merger of Continental Airlines and United Airlines last Friday, Congressman James Oberstar (D-Minn) voiced his displeasure again  with the merger and suggested that Congress might just need to reconsider the deregulation of airlines that happened in 1978.

The airlines have been stuck between a rock and a hard place for years. Combined profits of the industry are non-existent and customer satisfaction with airline service is somewhere down there in the range of our approval ratings of congress’s performance.

What we have received from deregulation are cheap air fares. Most people don’t remember what it cost to fly on the airlines prior to 1978 because they were either not old enough or did not fly on the airlines back then due to the costs. Real costs for flying via commercial airlines have come down over the past 30 years but the by product of lower fares has been a reduction in what we consider to be service and the amenities of air travel. In some ways airline travel has become just another form of mass transit much like rail service.

What we want we can’t have, and the government stepping in will not solve the problem.

We want our cheap $99 return fares, anywhere, anytime, and we want great service and convenient on time departure schedules to go with the low price.

Deregulation brought on the competition with low cost carriers, which brought down the fares that we all enjoy.

Low fares combined with volatile fuel prices, worldwide competition with lower labor costs and airlines irrationally putting too much inventory of seats in the market took the profits out of the airline industry.

So now we have to adjust to some new fare structure and service level that the free market should work out. Mergers of air carriers are a part of this evolutionary process.

The airlines and their shareholders deserve to make a profit, or at least attempt to do so, while providing air transportation to the consumer. Unlike a utility where we have no choice, we don’t have to fly if we don’t like the combination of price, service and time efficiency of air travel.

As my Southwest flight pulled into the gate Sunday afternoon at Nashville, the flight attendant reminded us that we have many choices about who we fly with and he thanked us for choosing Southwest Airlines. In reality we have choices beyond whom we fly with because we can drive and in some cases take the train. We can also choose not to go at all.  

Regulation of air travel from the federal government should be limited to matters of safety. Congress should not venture anymore than they already have into the regulation of customer service, pricing and competition. 

Government intervention has not brought much value to anything lately and I can’t imagine a scenario where reregulation of the airline industry will ultimately benefit the US economy and the consumer of air travel.

There is an MU-2 outside my window right now and those Garrett engines are so loud that, in the words of my first grade teacher Sister Paula, I can’t hear myself think. 

Airplanes are noisy.  No kidding, right?  That’s hardly news and it’s certainly no surprise.  Since airplanes are noisy, it follows then, that places they frequent – airports – are noisy, as well.  Again, no surprise there.  What continues to be a surprise to me are noise complaints made by people who live near airports.

What would you say if I told you that I bought a terrific little house next to a railroad track and that I got it at a steal?  You’d probably question my sanity since there are sure to be really noisy trains barreling along the tracks at all hours, right?  Now what would you say if I told you that I was planning on petitioning or even suing the railroad company to make their trains quieter and to run them only during daylight hours?  Does that even make sense?  I bought a house next to a pre-existing railroad track, the existence of which I unquestionably knew, and now I demand that the railroad operate according to my preferences?  I would be laughed out of the courtroom.  Or would I?

This situation happens every day with airports all over the United States and Europe.

Developers buy undesirable land near noisy airports, build houses all over the land, and sell the houses at attractive prices.  The new homeowners, forgetting the reason they got such a good deal on the house, then demand that the airport conform to their preferences – and the city councils and courts support the homeowners.

Airports don’t exist in a vacuum - I know that - and we all need to “go along to get along.”  However, there must be some consideration for the airports which were in existence prior to development and the economic contributions of those airports.  For instance, Atlanta’s DeKalb-Peachtree airport started it’s life in 1941, operated as a Naval Air Station as well as a general aviation airport and is currently the second busiest airport in the state of Georgia with 246,002 operations recorded in 2009.  Housing development in the area saw massive increases in the 1950s, after the airport was established.  At this time, the airport has a “voluntary” curfew between the hours of 11:00 PM and 6:00 AM.  I emphasize voluntary because it is clear from the airport’s own literature that the county would make the curfew mandatory if only the FAA would let them.  Exemptions are made for medical flights but, any other flight operating at the airport during curfew hours will receive a letter inviting the operator “without compromising safety.. [to] review its operating practices and perhaps modify its procedures to keep this from happening again.”  Basically, they invite the operator not to come back during curfew, reserving the right to invite the the operator not to come back at all.

Perhaps the most aggressive noise abatement policies are in Santa Monica, California, and in Naples, Florida, which were among the first (if not the first) to prohibit certain types of aircraft from operating into their fields at any time of day.  Naples, which is a public airport operated by the City of Naples Airport Authority, has its hands full these days dealing with an anti-airport group.  The situation has become emotionally charged and really contentious there.  The airport receives federal funding, yet the neighbors want to dictate how and when the facilities may be used.   Try doing that with an interstate or railroad. 

The Mu-2 is gone, but my ears are still buzzing; so, I sympathize with people who live with the noise.  However, because I know that airplanes are  noisy, I didn’t buy a house right next to an airport.  And I don’t have sympathy for the people who did, then proceeded to complain about a situation they entered into voluntarily.

Congress is still not getting the job done with the FAA Reauthorization bill.

In previous posts  on Plane Conversations I have discussed the issues surrounding all of the different provisions of the bill and why it still hasnt passed into law.

I still don’t know why Congress has to pile in all these controversial provisions that deal with Unionization of FedEx and landing slots at a couple airports into a major funding bill that has been in a stall for years.

The only reason I can think of is good old fashioned politics and game playing on the hill, and in the mean time issues with safety, upgrade of a severely outdated air traffic control infrastructure and long term funding to run the FAA gets postponed again.   

If those of us who run businesses and make payroll every week ran our business like these guys do business on “The Hill” we would have been out of business a long time ago.

Reporting from the Los Angeles Times by Julia Love, Tribune Washington Bureau in a July 30 article:

 Responding to the deaths of 50 people in the crash last year of a Continental Airlines flight near Buffalo, N.Y., Congress passed legislation Friday requiring increased training and experience for regional airline pilots.
The House passed the measure, which also extends Federal Aviation Administration funding, on a voice vote just before midnight Thursday, and the Senate approved identical legislation Friday morning. No member of either chamber objected.
The legislation requires all airline pilots to log at least 1,500 hours of flight time before flying passengers, up from the current 250-hour minimum for newly hired copilots. The bill also boosts training, mandates the creation of a national database of pilot records and aims to reduce pilot fatigue by directing the FAA to update rules on pilot duty hours.

So under political pressure from the families who suffered loss from the crash in Buffalo congress has passed a special bill dealing with pilot requirements and training for airlines.

 The target for the FAA long term funding reauthorization is now set for September 30.

 Any bets on whether they get it done before election time in November?

Starting the end of this year, if you are an aircraft owner you will have to apply for a new aircraft registration. The month your current aircraft registration was issued in will determine its expiration and when you have to apply for the new registration. 

For example if your aircraft registration certificate was issued in March of any year you will need to apply between November 2010 and January 2011 for the new registration.

 If you have no changes in your registration you can do the renewal online.

The new rule puts a three year expiration date on the new registration. I have seen this in many countries and it is usually a means for the government to collect more money from aircraft owners.

Prior to this rule change, an aircraft registration (the certificate that identifies the aircraft owners) was good indefinitely until such time as the aircraft owner(s) sold the aircraft. It also should have been canceled if the aircraft was scrapped, totaled in an accident of if the aircraft was registered with ownership in another country’s registry.

The new registration fee is $5.00 which is insignificant at this point. Hopefully this is not a means to eventually tax ownership though the registration process.

My concern is the FAA’s ability to handle mass registration submissions without creating a backlog of paperwork that would cause some owners registrations to become invalid even though they have complied with the new rules.

The FAA is saying if you don’t have a valid registration your aircraft can not fly. Basically lack of current registration causes the aircraft to be un-airworthy.  

The FAA’s concern seems to be that their data base in not accurate because aircraft owners don’t play by the rules. The FAA claims that possibly 35% of all aircraft registered are not flyable or have wrong information.  To some degree that is a valid concern, especially with scrapped aircraft that could be put back into service in an un-airworthy condition.  

So now we all have to submit new forms every three years and track the expiration. For fleet operators it is another item to track on their maintenance program. For individuals who own aircraft, I assume they will be responsible for tracking it and held accountable if they don’t? I don’t see where you get a reminder like we get in Tennessee when our car tags expire, but maybe that is coming.  

The FAA is understaffed today so how are they going to keep up with this, and especially how do they enforce action against those who don’t comply. Do inspectors have time to go around and check on all of the 357,000 plus aircraft registered in the US?

You can read the FAA rule and information here.

Tom Belden, a writer for the Philadelphia Inquirer, in a July 12 article, argues that the country’s airlines should be considered a “public good” and thus be subjected to regulation by the federal government for issues concerning customer service and pricing policies.

MIT Research Engineer and Aviation Consultant Bill Swelbar, in his blog post responding to that article, states that the airline industry is not a “public good.”

Quoting from Swelbar’s blog post:

“The airline industry does not fit the economist definition of a “public good”.  But they do bring a lot of good to publics of all sizes.  More taxes, fees and regulation will only ensure that communities will suffer a death by a thousand paper cuts because increased airline costs have to eventually mean fewer airports served.”

Both of these positions deserve consideration, and it is worth your time to read their stated positions. I will lean heavily to the side of Bill Swelbar on this issue.

All of us would agree that regulating safety and security in the aviation industry is good for both the industry and the traveling public. However, when it comes to regulating customer service, the federal government has gone too far.

I understand a “public good” definition when it comes to the electricity flowing to my house because I don’t have a choice about which electric company to use. I don’t see how that applies to airlines when the consumers do have a choice.

The consumer can choose which airline they fly with, or they can choose to not fly the airlines at all.

This country is fortunate to have one of the most developed road systems in the world and most of us can get in our automobiles and safely and quickly go anywhere in the country. In the densely populated areas of the country the developed rail systems provide an additional mass transit alternative to air travel. All these are options for travel if we don’t want to fly on a bad airline.

Social technology has provided an excellent vetting system for rewarding and punishing companies based on the markets perception of their service. Feedback is now instantaneous. Look at how social media savvy airlines like JetBlue use twitter to respond to customer service issues.

By having a choice, and allowing the free market to work it out, the good actors will be rewarded and the bad actors will be punished.

The free market will drive better airline customer service, and more efficient solutions to travel, not the government.

Last but not least, business and private aviation offers the choice for us to fly on our own schedule directly to the destination.  With over 5,000 airports to choose from, the travelers get ten times more destination choices than they get with the airlines

A vastly expanding civilian Unmanned Aerial Vehicle (UAV) market is leading to the day when UAVs must be allowed to operate freely in the National Airspace System (NAS). The main obstacle preventing this from happening is the distrust of the ability for a UAV to avoid collisions with manned aircraft. There has been a vast amount of effort put into researching UAV Detect Sense and Avoid (DSA) systems with the hope that an Equivalent Level of Safety (ELOS) can be achieved for unmanned compared to manned flight. The current debate is what type of DSA will provide the required level of safety to prevent increasing the hazard to manned aircraft operations.

There are many different types of DSA systems currently undergoing research, from visual cameras interpreted by humans to automatic detection systems incorporating lasers. ASTM International, an organization that develops industry consensus standards such as those that govern Light Sport Aircraft design, has released a standard (F2411-07) on the requirements for an Airborne DSA system that specifies the minimum capabilities of a DSA. However, this ASTM standard does not (and should not) mandate what type of system must be used.

The overriding question regarding what type of DSA will eventually be used is whether or not the pilot operating the vehicle should be “in the loop”. Can a UAV’s computer detect an aircraft and maneuver to avoid a collision automatically as effectively as a pilot on the ground could view a high resolution video screen and perform the same operation? There are many factors that must be considered before this question will be appropriately answered, such as pilot/computer response times and communication latency. However, a human has the ability to make decisions based on variables that may never have been identified as pertinent by a computer software engineer. Thus, a human interaction with the DSA system may not be the most “precise” option, but probably the most dynamic. Will we ever see 100% autonomous UAV operations in the NAS? Only time will tell.

The Unanimous Declaration
of the Thirteen United States of America

When, in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. –Such has been the patient sufferance of these colonies; and such is now the necessity which constrains them to alter their former systems of government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these states. To prove this, let facts be submitted to a candid world.

He has refused his assent to laws, the most wholesome and necessary for the public good.

He has forbidden his governors to pass laws of immediate and pressing importance, unless suspended in their operation till his assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other laws for the accommodation of large districts of people, unless those people would relinquish the right of representation in the legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved representative houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the legislative powers, incapable of annihilation, have returned to the people at large for their exercise; the state remaining in the meantime exposed to all the dangers of invasion from without, and convulsions within.

He has endeavored to prevent the population of these states; for that purpose obstructing the laws for naturalization of foreigners; refusing to pass others to encourage their migration hither, and raising the conditions of new appropriations of lands.

He has obstructed the administration of justice, by refusing his assent to laws for establishing judiciary powers.

He has made judges dependent on his will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, standing armies without the consent of our legislature.

He has affected to render the military independent of and superior to civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his assent to their acts of pretended legislation:

For quartering large bodies of armed troops among us:

For protecting them, by mock trial, from punishment for any murders which they should commit on the inhabitants of these states:

For cutting off our trade with all parts of the world:

For imposing taxes on us without our consent:

For depriving us in many cases, of the benefits of trial by jury:

For transporting us beyond seas to be tried for pretended offenses:

For abolishing the free system of English laws in a neighboring province, establishing therein an arbitrary government, and enlarging its boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule in these colonies:

For taking away our charters, abolishing our most valuable laws, and altering fundamentally the forms of our governments:

For suspending our own legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated government here, by declaring us out of his protection and waging war against us.

He has plundered our seas, ravaged our coasts, burned our towns, and destroyed the lives of our people.

He is at this time transporting large armies of foreign mercenaries to complete the works of death, desolation and tyranny, already begun with circumstances of cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the head of a civilized nation.

He has constrained our fellow citizens taken captive on the high seas to bear arms against their country, to become the executioners of their friends and brethren, or to fall themselves by their hands.

He has excited domestic insurrections amongst us, and has endeavored to bring on the inhabitants of our frontiers, the merciless Indian savages, whose known rule of warfare, is undistinguished destruction of all ages, sexes and conditions.

In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury. A prince, whose character is thus marked by every act which may define a tyrant, is unfit to be the ruler of a free people.

Nor have we been wanting in attention to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our separation, and hold them, as we hold the rest of mankind, enemies in war, in peace friends.

We, therefore, the representatives of the United States of America, in General Congress, assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the name, and by the authority of the good people of these colonies, solemnly publish and declare, that these united colonies are, and of right ought to be free and independent states; that they are absolved from all allegiance to the British Crown, and that all political connection between them and the state of Great Britain, is and ought to be totally dissolved; and that as free and independent states, they have full power to levy war, conclude peace, contract alliances, establish commerce, and to do all other acts and things which independent states may of right do. And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

New Hampshire: Josiah Bartlett, William Whipple, Matthew Thornton     
Massachusetts: John Hancock, Samual Adams, John Adams, Robert Treat Paine, Elbridge Gerry
Rhode Island: Stephen Hopkins, William Ellery
Connecticut: Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott
New York: William Floyd, Philip Livingston, Francis Lewis, Lewis Morris
New Jersey: Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark
Pennsylvania: Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross
Delaware: Caesar Rodney, George Read, Thomas McKean
Maryland: Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton
Virginia: George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton
North Carolina: William Hooper, Joseph Hewes, John Penn
South Carolina: Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton
Georgia: Button Gwinnett, Lyman Hall, George Walton

Anybody interested in providing the solution?

 The DOT’s Future of Aviation Advisory Committee recently met and comments  made in the meeting  indicate that small market airports are not in the airlines’ future plans – at least not the large carriers.  In fact, if not for the DOT’s Essential Air Service program, many cities currently receiving airline service would be in the no- airline zone. You can’t blame the airlines for not wanting to lose money; and, the current airline business model doesn’t work to serve smaller cities without government subsidies.

So, if the airlines cannot provide the solution, who can?

With fewer service options and more time spent processing through the system, the time to travel between small cities by airline often exceeds the time it takes to drive. Why fly when the drive costs less and doesn’t take much, if any, more time? Because flying often doesn’t make sense with the current options available, more people are opting for other means of transportation, drawing resources away from small airports.

What those airports and their communities don’t know today, but could know, are the true travel intentions of the people they are trying to serve. The airports must find out who, when and where.  In other words, they must identify the demand. 

Identifying the demand could be as simple as finding physicians in a community who are all attending an AMA convention.  This is just an example of the concept of group-buying, using an eight-passenger jet or a 30-seat regional airliner for the day to meet the specific demand to connect a group directly to another city.  Other examples could be alumni traveling to sporting events, golfers going to a new course or hunters traveling to a new lodge, etc.  If there is known demand, then supply will surely meet it. So, how do we find the demand?

Can Social Networking be a tool small communities can use to solve their air transportation problems through aggregating demand for travel?

Yes, it can.   Business Aviation, including small and large air charter operators, and small regional airlines, are in the perfect position to solve those air transportation problems.  We are sitting on a highly flexible (mobile), underutilized and diverse fleet of aircraft. Travel needs could be met on demand and by the seat with the right knowledge.  This may not provide a low fare airline solution that everyone thinks they want in their hometown; but, it could provide time-efficient and point-to-point travel at a reasonable price.

Isn’t that what we really want anyway? 

I have a proposition for you.  How about you climb into an aluminum tube and go hurtling through the air at 500 miles an hour?  How about you have no control over who you sit next to for several hours and how about you pay several hundred dollars for the experience?  Not so much, right?

Then, why do people take air mass-transit? Why do they spend the money to go through the experience – sometimes pleasant and at other times very frustrating – of boarding an aircraft to go somewhere? Why not go by another means of transportation like automobile or bus or train? Why even go at all?

I know this sounds like a dumb question because the answer should be obvious.

Of course, the purpose of travel is to go see someone or something, perhaps to experience something new or perhaps to build a business or personal relationship. We have some goal that we cannot accomplish at home; so, unless we can bring the destination to us, we have to travel to get there.

When we get past the whys of travel and get to the methods, things get a little hazier.

Why do people travel by airline? I have to believe that people chose to go by air because they value their time.  They believe that air travel will help them make the best use of their time, allowing them to spend more of it at their destination and less of it getting there.  That makes sense since aircraft are faster than cars or trains or buses, right?  In theory, yes.  In reality, often, no.

Once, traveling by air was perhaps the most glamorous and efficient way to travel.  Airlines served our purpose of getting there faster.  Are they still serving that purpose?

All of the evidence suggests that each year they take a little longer to get us there. In other words, airline travel is slowing down – not speeding up - as a mode of travel. Airline travel is losing efficiency and is falling further and further short of fulfilling its purpose. 

In an economy that is driven by constant demands for increased productivity, is it any wonder that the market is unwilling to pay the airlines a profitable price for their service?

Now, in defense of the airline industry, they do not have total control over the efficiency of their service. Since airlines have been targeted by terrorists more  than every other form of transportation, the industry is subject to the government’s ability to provide security to the traveling public.  Airlines are also subject to constraints in the traffic flow system – the freeways in the air are clogged and the technology to increase traffic flow has not kept up with the demand. In essence, we are trying to push big city traffic through a two-lane highway. We have the technology; but, we haven’t built the new eight lane freeway the traffic volume requires.

So, the  problems that reduce the efficiency of the air transportation system are not for the airlines to solve alone. All of the stakeholders in the game must figure it out.  

For airlines to be a viable part of the future transportation system, the problems must be solved. Otherwise, our economy will be to unable to reap the full benefits of new innovation and increases in productivity.

The sooner the better, if this economy is to sustain long-term growth.

Back in January, we talked about some of the reasons that airlines oversell flights.  The biggest one is no-show factor - the number of ticketed passengers who neither cancel their reservations nor appear for their flights.  No-show factors exist in all markets and are quite high in some; so, airlines oversell flights in an effort to reduce lost revenue.

By definition, when airlines oversell flights they sell the same seat twice.  Clearly, promising the same discrete product to two different purchasers could be seen as unethical and, in some instances, fraudulent.  If I sell one piece of land to two different parties, I’ve defrauded one of them; however, airline seats are less like real estate and more like dental appointments.  Let’s say your dentist has enough time to see 16 patients in a day.  If Patient #3 doesn’t show up for his appointment and no other patients are available to fill the slot, then that appointment time goes empty.  The dentist cannot insert today’s wasted 30 minutes into tomorrow.  Since Patient#3 neither cancelled nor appeared, he will be charged a no-show fee.  This compensates the doctor for her time, rather than allowing the productivity and revenue to be lost.

Likewise, if 120 passengers buy tickets for today’s 12:30 departure on flight BR549, and if 30 of those passengers fail to show up, the airline cannot take those 30 seats and use them on another flight.  If they go out empty, the airline loses that revenue.  Passengers may pay a fee and use their tickets on other flights, regardless of their no-show status.  In effect, the passenger has paid for a single seat on a single flight and has used a single seat on two flights.  Unlike the dentist, the airline does not charge the no-show passenger for their unused seat, although several years ago, there were a few airlines that had a Use-It-Or-Lose-It policy.  The policy went over badly with consumers and was abandoned.

Currently, airlines solicit passengers for volunteers to give up their seats.  If there are no volunteers, someone will be denied boarding involuntarily.  If several conditions are met, those passengers are eligible for compensation between $400 and $800.  Passenger-rights groups have pushed the Transportation Department to raise that compensation range to between $800 and $1,200, payable by cash or check – no travel vouchers, please.  So, now.  Riddle me this.  If I don’t have a seat assignment (leaving me more likely to be bumped) and the gate agent asks me to give up my seat for a $500 travel voucher, how likely am I to volunteer if I can hold out and get up to $1,200 in cash?  I’m going to have to go with “Not very.”  Gate agents are going to love this.

In general, I believe that our current air mass-transit system is ridiculously broken and in need of an enormous overhaul that only economic Darwinism can accomplish; however, in this case, the carriers are in a Catch-22 – they lose money if the seats go empty and they lose it if they take involuntary oversales.  How can they hope to break even in that circumstance?  They could levy much larger ticket change fees or they could determine annual losses in whichever category they decide to follow and amortize those losses over annual ticket sales.  The second solution sounds like one that would appeal more to carriers since they would stand to collect on every single ticket sold rather than just on those changed.  If they chose this solution, passenger-rights groups will have succeeded in making every single traveler pay for empty seats of no-shows.

Regardless of the solution, this is not a safety related issue.  Why is the government, with its nearly $1.2 trillion deficit, presuming to govern the business practices of publicly held airlines?  Doesn’t this constant meddling just prolong the lives of terminally ill business practices and the companies who refuse to change them?  Doesn’t preserving the status quo in such a way actually stifle growth and innovation?

Allowing huge airlines to fold under the weight of their own poor decisions would have enormous economic repercussions, we all know that.  However, without pruning the dead vines, how do we expect the industry to truly grow?