The APBlogger in the news

My article on New York’s passenger’s bill of rights was quoted on Aero-News.Net.

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Airline security . . . looking good

From Aero-News.Net:

The Transportation Security Administration thinks it has found the answer to some of the agency’s biggest problems . . . including its failure to retain personnel, persistent equipment troubles, missing hard drives containing personal data, and security breaches.

Why, new uniforms, of course.

Make sure those deck chairs are arranged neatly, folks. . . .

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“Wanting in the court of law . . . deficient in the court of good business sense.”

I have a new article today about the New York passenger’s bill of rights on American.com.

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BRICs that fly

One of the little-noticed stories in the aviation world is the rise of the BRICs–the major developing economies of Brazil, Russia, India, and China–in the aerospace sector. The media love the Boeing-Airbus horserace, but their competition, thrilling as it may be for aviation wonks, has left crucial gaps in plane size, especially those seating fewer than 120. Brazil’s Embraer is a major player in the regional jet sector, and its new E-Jet line makes it a market leader. Russia’s Sukhoi Superjet 100 is in testing. China’s Advanced Regional Jet 21 will be unveiled this fall, posing a unique challenge to the world aerospace sector. And now, news comes that an Indian company is planning a new regional jet in eight years, rounding out the aspirants for regional jet dominance–the BRICs.

Embraer–and likely India’s entrant, National Aerospace Labs in Bangalore, as well–is playing by the rules of the international system. Its solid products compete on a level field with Canada’s Bombardier, and its presence as an innovator filling important niches left untouched by Boeing and Airbus is welcome. But China and Russia are causes for concern: China sees aerospace as a matter of national pride and may use its network of client states as an unwilling market for its product. Will its size and its expected economic nationalism distort the global market for airplanes? As for Russia, Vladimir Putin is combining Russia’s aircraft manufacturers–the old Soviet relics of Ilyushin, Tupolev, Yakovlev, and the like–into a new state-owned company, the United Aircraft Building Corporation. The UABC will complete the Superjet 100. Its creation is a token of the resurgent nationalism of Putin, and it is not in keeping with the ethos of the international aerospace sector.

Stay tuned to the APB for more on these issues in the months to come.

India’s own 70-seater aircraft could fly by 2015 [Hindustan Times]

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The free market to conquer the final frontier?

This is a bit “above and beyond”–by about 150 vertical kilometers–my usual beat, but it’s worth noting: a space hotel is on the way. The Galactic Suites’ opening has been announced for 2012, orbiting around the planet. It is being backed by investors in Japan, America, and–of course–the UAE, and stays will cost $4 million for three days.

I’m not quite sure how spacefarers will get to the Galactic Suites. Virgin Galactic’s second suborbital ship SpaceShipTwo isn’t schedule for flight until 2009, and its planned orbital successor SpaceShipThree is in very early planning stages. Is any other private company closer? Perhaps Soyuz will serve the hotel; the Shuttle will be retired by then.

While Galactic Suites may not have much of a future (at least not a near future), it is a marker of the way space will be explored: not with expensive, declining-return, government run programs for which spaceflights of negligible practical value cost a half-billion per, but with private-sector innovation and private-sector money.

It would also be hard to do worse than the government program’s safety record: 2 percent death rate per astronaut-flight. The private sector wants space travel to be profitable and desirable, and unsafe craft and facilities would deter interested spacefarers.

So whether or not the Galactic Suites’ 2012 date is a PR stunt, it’s pointing in the right direction.

Space Hotel Slated to Open in 2012 [SPACE.com]

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Airline analysts abhor consumer-friendly competition

While writing the post below, I was amused by a quotation in one of the linked articles:

While American airlines have been focusing more on international service and already are on the PR offensive in an attempt to win the extra routes to China, Chinese carriers are equating strength with domestic market share. They commonly launch fare wars in order to attract passengers, and industry analysts are concerned this tactic may be used to gain a competitive edge in the expanded US-China market. As US carriers aim to improve long-haul service, Chinese airlines are engaged in “wasteful competition” that degrades collective profits, analysts have said. (emphasis added)

Oh, the horrors! Competition! Airlines not behaving like members of a cartel! The degrading of “collective profits!” Analysts concerned that industry players may engage in the “tactic” of competitive behavior!

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Lopsided ambitions for Chinese skies

Talks with Beijing in May secured thirteen more nonstop round-trip passenger flights between the United States and China. U.S. carriers salivated at the possibility, eagerly promoting their prospective services with splashy websites and campaigns worthy of an Olympic bid. (It totally slipped by me, I suppose, that the 2014 Winter Olympics were announced for Russia last month.) A few U.S. majors have no China rights at all, and since the Chinese market is growing faster than routes are becoming available, demand is increasing, and airlines can charge fare premiums.

But Chinese airlines are not so excited about the new rights, according to ATW Online. The agreement with China allows Chinese carriers a number of these rights, but none of the big three there–Air China, China Eastern, and China Southern–applied for them. Chinese airlines have faced competitive disadvantages on transpacific routes in service and fares. They have not even used all their available slots. Therefore, four little-known, less-networked airlines have received the Chinese slots.

There is strong demand for nonstops between China and the United States. If Chinese carriers are not interested in flying them, U.S. airlines are more than willing and ready. They are chomping at the bit. They have the planes, passengers, and route networks to make them work. Sound public policy would allow the best airline to fill a space, regardless of nationality. Although this provision of the agreement is likely intended to create connection options on both sides of the Pacific, it only works if ambitions are created equal. This latest development illustrates why open skies agreements make more sense: they allow the market to assign routes, not bureaucrats in Washington and Beijing.

China’s big three pass on new transpacific services; four smaller carriers apply [ATW Online]

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Passenger “bill of rights” for New York state

Today New York governor Eliot Spitzer signed a “bill of rights” for air travelers in New York state. The law, which is summarized (with full text available) here, provides that

whenever passengers have boarded an aircraft but have been delayed from takeoff for more than three hours, the carrier must provide services including electronic generation for the purpose of providing fresh air and lights, waste removal services, and adequate food and drinking water. All carriers must clearly and conspicuously post consumer complaint information, including explanations of passengers’ rights and contact information for Federal aviation agencies and the Office of the Airline Consumer Advocate.

Penalties can be steep:

The Attorney General can seek a civil penalty of up to $1000, or up to $1000 per passenger for violations involving failure to provide required services to stranded passengers.

Why would New York state pass such a bill? Well, the legislature sees it as a great way to extend such regulations nationwide:

New York is home to some of the world’s busiest airports, and so should take the lead in adopting common sense measures that empower consumers and prevent outrageous incidents like these from recurring.

The law, and Spitzer’s statement upon signing the law (“As a major international travel hub, it is our duty to take the lead in adopting measures that will ease air travel for passengers.”), make clear that New York’s measures are meant to inspire copycats. And with New York home to two of the world’s busiest airports, JFK and LaGuardia, this law is sure to effect passengers nationwide and around the world.

The best thing that can be said about this new law is that it doesn’t force airlines to let passengers off planes. That measure, part of a passenger’s bill of rights introduced earlier this year by Senator Barbara Boxer, would have wreaked all sorts of havoc on airline schedules, affecting not only people on the plane but people traveling from airports everywhere. It would force airlines to preemptively cancel a lot of flights in order to preserve as much as their original schedules as possible and avoid the risk of massive penalties. And when the country’s flying at record capacities, that means fewer seats for passengers on canceled flights to catch later, leading to days-long waits in crowded hub airports. You choose: four hours on a plane (very, very bad) or two days at O’Hare (quite possibly purgatory).

Airlines don’t deliberately treat their customers this way. They do it because at the time, it seems better than the alternative. Sometimes it isn’t, but these kinks seem to work themselves out. Our airline industry is finally reaching pre-9/11 capacities and financial health–albeit at the cost of gutted contracts and broken promises to airline employees–and the response is to pile on regulation?

Although the New York law is not the worst that could have happened, it will force airlines to change practices related to maintenance, catering, and logistics in ways that will inevitably raise fares in New York markets and make the state a less competitive place for air travel.

Congress and the states would do better to call for reforms and improvements in our outmoded air traffic control system to provide an infrastructure to support the high demand for travel that has fueled the airlines’ comeback.

New York will probably be praised to the high heavens for being a “laboratory for democracy” in this instance. When the test results become clear, will they be as consumer-friendly as they were touted to be?

Spitzer signs NY air travel ‘bill of rights’ [USA Today, via Today in the Sky]

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BA’s 640% oil premium

Today British Airways and Korean Air Lines entered pleas and received fines of $300 million for conspiring to fix prices–BA, to fix abnormally high “fuel surcharges” on passengers and cargo, and Korean, to agree with air cargo competitors to set abnormally high rates.

The Department of Justice is not announcing co-conspirators, but Virgin Atlantic and Lufthansa agreed to cooperate, avoided prosecution, and are paying restitution. The story would be much clearer if we knew exactly whom BA and Korean were in cahoots with.

BA seems to have pretty flagrantly milked its customers: its fuel surcharge in 2004 was $10 and the price of oil was approximately $35 per barrel. By 2006, BA was charging a $110 fuel surcharge (I know, that’s enormous!) but oil was at $60 per barrel, meaning that BA’s premium was about 640 percent over its previous ratio!

I know less about the cargo conspiracies, and the press accounts I’ve seen so far have been vague. I hope to read the filed charges once they’re put online. For now, it seems that the Justice Department caught airlines with their hands in the cookie jar. Good for them: price transparency is the way to go, and vigorous enforcement can protect competition.

Ryanair, the spunky thorn in BA’s side, was quick on its feet with a sassy press release, promising never to levy a fuel surcharge (no, we’ll just charge you for everything else), claiming its average fare is lower than BA’s surcharge, and jabbing at its rival: “BA has been ripping off passengers for years by price fixing and working with other airlines to inflate fuel surcharges. Since BA first introduced its fuel surcharge in 2004, the price of oil has doubled, yet BA has increased its fuel surcharges seventeen-fold to £43 per one-way flight.”

British Airways PLC and Korean Air Lines Co. Ltd. Agree to Plead Guilty and Pay Criminal Fines Totaling $600 Million for Fixing Prices on Passenger and Cargo Flights [U.S. Department of Justice]

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