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.

Last weekend I was in Chicago as a guest of Apex Brasil  to attend the Peak Anti Freeze and Motor Oil Indy 300 Race. This was the first Indy race I have attended and I hope not the last. Tony Elrod, with ETA Logistics , drove us from the airport to the hotel and promised that I would be hooked on racing after the first event. I have to admit he was right.  

Melanie (my better half) and I arrived in Chicago Friday afternoon in time to get to the hotel downtown and attend a dinner hosted by Apex Brazil at Texas de Brazil Steakhouse Churrascaria. I have been to an authentic Churrascaria in Sao Jose Dos Campos while visiting the Embraer factory. Texas de Brazil has them beat on décor and sizzle but I would give them a tie on the food quality and flavor of the beef.

Apex Brasil (The Brazilian Trade and Investment Promotion Agency) was created by the government of Brazil to promote companies in Brazil to the international market. To promote Brazilian companies here in the US they have become a major sponsor of the Indy Racing Series. They do an excellent job with connecting their businesses through the face to face networking of events like these races.

As a part of their race sponsorship, Apex Brasil is supplying pure ethanol fuel to power the race cars. Brazil is a world leader in the development and production of bio fuels. The major producers of ethanol in Brazil are now working on an aviation fuel to power commercial aircraft. 

Our business connection to Brazil is through Embraer Executive Jets as an operator of two Phenom 100 light jets. We have also delivered 11 aircraft from Brazil to new owners in Europe and the US as a provider of delivery and mentor services.    

Saturday we went to the race track early afternoon for a tour of the pit and garages where the teams were making last minute preparations and going through inspections prior to the race. It is fascinating to see what goes on behind the scenes of a major race. Just prior to the race we were able to walk by the cars, out on to the track and watch up close as the drivers were introduced.

I was glued to the seat the entire race, and listened through headphones connected to a scanner to the conversations between drivers and the spotters. What a great way to get into a race by hearing the teams talk as it is happening real time.

Sunday we had the day off and took the Chicago Architectural Foundation  boat tour on the river. The tour lasts 90 minutes and is packed with information about the buildings that make up the skyline in Chicago. Chicago was the first city to have skyscrapers, and is rich with architectural heritage. I would highly recommend this tour as a way to learn about Chicago.

On the way back to the airport, Tony recommended going through the drive through at Portillo’s for an Italian Sausage Sandwich on a French Bread roll with grilled Sweet Peppers and Mozzarella. What a treat and a fun way to end our stay in Chicago.

Thanks Tony for getting us to and from the airport with great conversations and thanks to Apex Brasil for a great weekend.