Congress Fuels Airline Merger Madness

Merger mania has struck the airlines once again. A year after US Airways failed to buy Delta Air Lines in a hostile takeover (then, pundits heralded the long-awaited industry consolidation), the buzz is back.

Not long ago, a hedge fund with stakes in both Delta and United Airlines spun a rumor about a merger, causing the stock price to soar. Now, Delta’s board has decided to examine mergers with other airlines, principally United and Northwest Airlines. Northwest’s CEO announced that merger proposals would be weighed carefully, and United has made no secret of its desire in recent months to merge with another airline. And now may be just the right time to merge, thanks to a provision in the 2007 appropriations act requiring “fair and equitable” handling of labor issues during a merger. Continue reading “Congress Fuels Airline Merger Madness”

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How to Fix Airport Delays

This past summer was another predictable nightmare for U.S. air travelers. With record-high passenger traffic, expanded schedules at many of America’s busiest hubs, and the cost-cutting policies of post-bankruptcy airlines, the slightest thunderstorm or security hiccup resulted in massive delays. Some flights, especially in the Northeast corridor, were delayed every day they operated.

Meeting with senior officials at the White House last week, President Bush identified the chief problems as customer service and congestion. He instructed Transportation Secretary Mary Peters to devise a solution by Christmas, which will no doubt be a short-term fix. But because of the interconnected structure of air travel, any real solution needs to be system-wide. Continue reading “How to Fix Airport Delays”

Wrong of Way

On August 3, New York governor Eliot Spitzer signed a “bill of rights” for air travelers in New York state. The law provides that passengers who have boarded a plane but have been delayed from takeoff for three hours or more must have access to “amenities” like fresh air, power, lavatories, food, and water. The law also sets up an official “Airline Consumer Advocate” to handle complaints. Penalties for failing to provide these services can be steep: up to $1,000 per passenger.

This comes on the heels of a woeful summer, spring, and winter of airport delays and passengers trapped on immobile planes, most notoriously JetBlue’s February fiasco at John F. Kennedy International Airport, which saw passengers stuck in planes for up to eleven hours. Continue reading “Wrong of Way”

Boeing, Airbus: Prepare for Turbulence

On the apposite date of July 8, 2007, Boeing will unveil the first assembled 787, its long-expected widebody jet. But with so much attention on the Boeing’s heated competition with Airbus, new developments in aerospace are slipping by unnoticed—especially in emerging-market countries like China, where some of this century’s big aviation action may well take place.

Later this year, the Chinese state-owned company ACAC will unveil China’s first “homegrown” commercial jetliner: the ARJ21, a regional jet seating 70-100 with a range of 1,800 miles. When the ARJ21 takes flight, it will be for China a prouder moment than the 787’s unveiling will for Boeing. China’s aerospace ambitions are bigger than the ARJ21, and they may have big global consequences.

The weeds of nationalism grow well in aviation’s garden. Continue reading “Boeing, Airbus: Prepare for Turbulence”

A Valuable New Airline Service You May Not Have Noticed

The last time I flew on Ryanair, Europe’s scrappy low-cost airline, I sensed some message confusion. Its garish blue-and-yellow planes and spartan terminals bear slogans such as “The Low Fares Airline,” “The On Time Airline,” “Fly Cheaper,” and even one that read “Europe’s Favourite Airline”—an obvious dig at its larger rival British Airways, whose longtime slogan was “The World’s Favourite Airline.”

Ryanair gets its share of bad press, and while I’ve never had an unpleasant flight on the airline, I’ve never had a particularly pleasant one either. It is a truly no-frills experience—no window shades, no reclining seats, charges for checked luggage, everything on the plane for sale. So can it really be Europe’s favorite airline? Can it be anybody’s favorite airline? Continue reading “A Valuable New Airline Service You May Not Have Noticed”

Unfree as a Bird

Picking on outrageous federal entitlements, pork-barrel programs, and regulatory regimes trims the national budget about as much as plucking a straw from a haystack. But one program deserves special commendation for achieving the trifecta of bad governance: regressive transfers, inefficiency, and inhibited innovation. I refer to the Essential Air Service (EAS) program of the Department of Transportation, which subsidizes scheduled air service to rural communities far from major airline hubs.

These routes are the back roads of skies, serving unknown hamlets like Show Low, Arizona; Thief River Falls, Minnesota; and Greenbrier, West Virginia. They are generally poorly traveled, costing American taxpayers millions every year to subsidize. Continue reading “Unfree as a Bird”