RESPONDED ON NOVEMBER 30, 2009 7:34 AM 

Robert L. Crandall, Retired Chairman and CEO, AMR and American 

Airlines 

The first question the LaHood Advisory Committee should consider is why the United 

States has no national air transportation policy (Let's call it a NATP to save space and 

time). Given the performance of the U. S. airline industry, and the country's obvious 

need to reduce its use offossil fuels, it is hard to understand the absence oflong term 

planning. Unfortunately, as former U. S. DOJ antitrust official Joel Kline observed in his 

recent and excellent book "Politics Lost", we seem to be living in a period when "the very 

notion of planning, especially planning for the common good, seems vaguely socialist". 

In the 31 years that have elapsed since the U.S.airline industry was deregulated, the 

industry has lurched from crisis to crisis, and its performance has declined by virtually 

every measure. Year after year the industry's financial situation grows more desperate, it 

provides fewer good jobs, its employee relations worsen, its customer service 

deteriorates and its international competitiveness declines. 

Unhappily, the U.S. has never bothered to put together what corporate America would 

call a mission statement or, in simple terms, a definition of the air transportation goals of 

public policy. Just what is it we want the airline industry to do? 

Since 1978, we have behaved as if we want nothing other than the lowest possible fares, 

and if that is so, we might plausibly claim success. But is that really the case? Are we 

interested in having a financially sustainable air transportation system and in keeping 

small and mid-size communities connected to the rest of the country and the world? Do 

we want our airlines to provide well-paid jobs and a secure career path for the men and 

women who serve the public at airports, and fly and maintain the aircraft we travel on? 

Do we want U.S. carriers good enough to compete on the world stage? Do we want to 

minimize both fuel usage and carbon emissions? 

If the answers to those questions are yes, then we need to develop public policy 

objectives and a framework for strategic analysis which is far different from the path we 

have followed since 1978, and which is free of ideological convictions about the virtues of 

unregulated competition and regulatory oversight. 

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If we can assume that the LaHood Committee does come up with an NATP whose 

objectives include saving money, conserving fuel, providing better service to travelers, 

offering good jobs and being more competitive on the world stage, the second question it 

should ask is "Why is the U. S. air traffic control system so antiquated and what can we 

do to fix the problem?". 

I doubt there is anyone with an in depth knowledge of aviation that does not believe our 

20th century air traffic control system is broken and badly needs replacement. Our 

system contributes to congestion, costs too much, drives excess fuel use and unnecessary 

emissions and limits growth. It needs fixing, and because financing, development and 

implementation are heavily impacted by politics, it's getting fixed far too slowly and 

inefficiently. Unfortunately, because the airlines and the general aviation community 

have been unable to agree on how the air traffic control system should be financed, 

because Congress has been unwilling to give up control of such minutia as where FAA 

facilities are located and because the union representing air traffic controllers would 

rather negotiate with Congress than with a professionally run business, the U. S. is 

virtually alone among advanced countries in not having created a fee financed, 

commercialized, professionally run air navigation service provider. 

Given the many constituencies that would be impacted, fixing the problem won't be easy. 

However, a long series of studies, commissions and task forces dating back to 1985 have 

all reached the conclusion that creating some form of a professionally managed, user 

governed, fee based organization is needed to assure the continued adequacy of our air 

traffic control infrastructure. So this task force should avoid the inevitable temptation to 

launch still more study of a problem that is already well understood. Instead, it should 

recommend that the administration embrace the concept, and bring to bear the political 

resources necessary to find a prompt solution. 

The third problem on the Committee's agenda should be the issue of over scheduling. In 

the intensely competitive airline industry, individual airlines cannot effectively limit the 

number of flights scheduled at congested airports. Consider the reality that in the 

absence of government imposed flight limitations, an airline that reduces the number of 

flights it offers at a congested airport is very likely to see anything it cancels replaced by 

additional flights offered by a competitor. Since planes leave an airport on a first come -

first served basis, an airline which reduces the number of flights it offers will not reap the 

rewards of more on time departures, particularly if other airlines add more service at 

approximately the same times as the flights that were cancelled. However, because 

competing airlines will now offer travelers greater frequency, and thus a wider range of 

arrival and departure options, the cancelling airline is likely to lose both market share 

and revenue. 
Over scheduling imposes unnecessary delays on travelers, drives excess fuel usage and 

unnecessary emissions and costs the airlines money. Thus, it is difficult to see why the 

FAA has resisted imposing mandatory schedule reductions at those airports where there 

are more flights than the physical facilities can readily accommodate. 

The Committee should recommend that the FAA be directed to come up with a way to 

limit the number of flights at any given airport to the number that can be operated on 

time in normal weather conditions, thus improving on time performance, reducing 

delays for travelers and conserving both fuel and dollars. 

The fourth serious problem to which the Committee should turn its attention is the 

airline industry's deplorable labor relations. The industry operates under the provisions 

of the Railway Labor Act, which facilitates corporate wide organizing and which seeks to 

minimize the probability of transportation strikes by imposing various mediation and 

arbitration options on both labor and management. Moreover, because the industry 

operated as a regulated utility from 1938 to 1978, because it became widely organized in 

the years immediately after World War II, because it has always been the subject of 

pattern bargaining, and because airlines are uniquely unable to bear the impact of 

strikes, airline employees until very recent years enjoyed compensation well above that 

paid for similar skills in other industries. 

All these conditions have created nearly constant stress between airline labor and airline 

managements. That stress, which has been heightened in recent years by the adverse' 

impact of deregulation on the country's legacy airlines and has been recently exacerbated 

by the impact of a severe recession, has clearly had an adverse impact on airline service 

levels and on airline financial performance. Something better is needed, and the 

Committee should examine every possible approach to improvement. 

Finally, the Committee should examine the question of whether the goals of a NATP can 

be realized by an industry chronically unable to earn anything approaching satisfactory 

financial returns. The airline industry is extraordinarily capital intensive, and to assure 

both satisfactory performance and optimal safety, must consistently invest large sums in 

training its employees. An industry which dpes not attract long term investors, and 

whose securities are widely regarded only as trading vehicles, cannot offer the attractive 

careers sought by the high quality employees airlines need and want, contribute to 

mitigating the country's excess use of energy, buy and operate the modern aircraft 

customers prefer, or finance the competitive international services required to be an 

effective global competitor. Thus, the Committee should address the question of why this 

important industry is unable to earn satisfactory financial returns, and propose 

alternatives to remedy the problem.