Posted in Evan's Commentary, tagged consumer advocacy, travel, usa on December 13, 2007 |
Gallup has a new poll out today with some unexpected results: Americans on the whole are satisfied with air travel, and their positive opinions of it have actually increased since 1999.
Americans who fly (about 43 percent have flown in the past year) report being satisfied with airline staff, on-time performance, baggage handling, and even airport security, with which 69 percent of respondents were satisfied! Interestingly, satisfaction with ticket prices has gone up from 45 percent to 65 percent since 1999, an indication that fares remain at historically low levels. In some categories, frequent fliers are less satisfied, but in many they are just as satisfied as those who take less than four flights per year. The one thing passengers don’t approve by majorities is seat comfort.
According to Gallup:
The data suggest that for the most part, American air travelers have had positive experiences with the airlines, are forgiving when they haven’t, or have low expectations about air travel. The horror stories of being stuck on an airplane for hours without food, drink, or rest-room access get a lot of attention and give the air travel industry a black eye, but affect a relatively small proportion of air travelers. Those who have avoided such complications may feel fortunate by comparison and thus might be more likely to be satisfied with their own travel experiences.
These findings are profoundly contradictory to the conventional wisdom. To be sure, there’s room to improve, but that such vast majorities are satisfied indicates that the current level of fares and services meet the demand for air travel. It also suggests that passengers have already long-accepted what Elliott Hester urges on the NY Times blog Jet Lagged: “Main-cabin passengers might have less disappointing experiences if they accepted a commercial flight for what it really is: public transportation. A relatively inexpensive way to travel from point A to point B. Nothing more. Nothing less.” The data show that consumers aren’t disappointed–and that they’re growing more and more satisfied.
Like I said, surprising.
Airline Satisfaction Remains High [Gallup]
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Posted in Evan's Debates, tagged aerospace, asia, competition, environment, europe, nationalism, open skies, prestige, regulation, usa, world on December 12, 2007 |
My exchange with Daniel Hall earlier this week made it onto The Economist‘s Free Exchange, which was in turn picked up by Megan McArdle’s Asymmetrical Information.
The Economist writer brings in the intervention dimension:
[S]o politicised an industry as air travel need not fear dislocations in any case; governments would react incredibly quickly to pull back on any part of an agreed-upon energy bill that appeared to cause significant damage to airlines or aeroplane manufacturers. This, in fact, is one of the arguments made by carbon pricing sceptics–that governments will not allow the necessary pain to be felt.
McArdle follows this with
[G]overnments will not allow anything to harm the airline industry.
What I don’t quite understand is why this is so. Why is everyone obsessed with having protected domestic airlines, and indeed, airplane manufacturing capacity? . . . Now China, too, wants its own airframe manufacturer. And everyone wants to protect their national airlines.
Why is flying so emotional? And so heavily, heavily protected by the heavy hand of the state?
Two things to say about this: amen, but things may be looking up.
Aviation remains one of the most nationalized industries on the planet. British author Simon Calder once wrote, (more…)
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Posted in Evan's Commentary, tagged congress, faa, labor, regulation, safety on December 12, 2007 |
Have you been curious about what Congress is doing on aviation? Yeah, me too, and the answer is: a whole lot of not much. Remember when I wrote about those five-year FAA reauthorization bills this summer (House, Senate)? The House passed its bill by a solid margin. That battle royale I predicted in conference? Well, the Senate never got around to passing its own version or considering the House’s. In lieu of actually doing their jobs, on September 26 Congress passed a stopgap funding measure for the entire government pending passage of appropriations bills.
But there has been some action on a measure contained in both FAA bills and brought up on its own by Congressmen Jim Oberstar, Jerry Costello, Robin Hayes, and John Mica: raising the mandatory pilot retirement age from sixty to sixty-five. The Fair Treatment for Experienced Pilots Act (HR 4343) is hardly unexpected; age sixty-five is an international standard and the FAA was already moving in that direction. With the support of labor and no objection from industry, the bill sailed through unanimously.
What will the new retirement age mean for airlines and pilots? Here are a few issues: (more…)
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Posted in Evan's Debates, tagged environment, regulation, tax on December 10, 2007 |
Returning to these posts and this article, I think I need to clarify and reframe my comments. First, Daniel is right that increasing the cost of carbon-based fuels will drive innovation in more fuel-efficient technologies. It did just that: in the late ’90s, Boeing pitched a fuel-wasting concept, the Sonic Cruiser. Airlines were standoffish at first, but as the price of oil began spiking, everyone disclaimed interest and Boeing scrapped the project for its much more environmentally (and bottom line) friendly 787. But this innovation-fueling (pun not intended) only works up to a point, when the increased costs reach such a level as to drive airlines out of business and leave the aerospace firms in the lurch without enough clients to justify further R&D. So, then, the climate challenge is to find the optimal point at which carbon pricing or emissions trading incentivizes climate-friendly aerospace innovation without breaking the airlines. What that optimal point is, I, a non-economist, am not able to say.
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Posted in Daily Departures on December 10, 2007 |
Posted in Evan's News and Quick Takes, tagged environment, humor on December 10, 2007 |
Update on this post is here.
Daniel Hall at Common Tragedies has responded to my request for economic analysis. I was really wondering about the effects of different types of regulation–say, a mandate for minimum fuel-efficiency standards versus an overall greenhouse gas cap or tax. He writes, “I’m skeptical there’s much room in the aircraft market for efficiency standards that are economically justifiable.” But some of his additional comments taking on my TCS Daily article will not hold for airlines. Let’s take a look at them:
Evan . . . repeats what is apparently the latest conservative meme on climate change policy: that reducing emissions through a carbon tax or a cap-and-trade system will be far more economically costly than innovating our way into emissions reductions.
Climate change is not my bailiwick, so I’m not sure what the “latest conservative meme” is, unless my being conservative and saying something makes it a meme. I’m writing strictly about aviation, not all emitting sectors, and I’m not committed to a particular policy solution. (I am interested in seeing what happens with the forthcoming inclusion of aviation in Europe’s Emission Trading Scheme; I do not think many of the the various country-level travel taxes being proposed or enacted in Europe make economic sense or are particularly “green.”) Furthermore, Aviation has some unique characteristics. Airline deregulator Alfred Kahn’s wise quote, “I really don’t know one plane from the other. To me, they are all marginal costs with wings,” does not always apply.
It’s not past inter-industry profits that drive innovation; it’s the promise of future returns that leads investors, both inside and outside an industry, to pour in investment funding to encourage innovation.
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Posted in Daily Departures on December 6, 2007 |
Several states filed a petition with the EPA today asking it to regulate greenhouse gas emissions from aircraft. The article did not specify whether the states want a carbon tax, cap-and-trade system, or some blend of the two, but it does say that the states want the EPA to use its rulemaking authority to “requir[e] operators to boost fuel efficiency, use cleaner fuels or build lighter, more aerodynamic airplanes.” The arbitrary use of mandates does not seem at face value to be as efficient as market-based measures–demand for lighter, more aerodynamic planes is already high and waiting lists for them are long–but I’ll leave this for the environmental economists at Common Tragedies to sort out. According to California attorney general Jerry “Moonbeam” Brown, they want something that’s not “unimaginative.”
Serendipitously, I had a piece on TCS Daily today about policy responses to aviation’s contribution to climate change. I wonder if the best response isn’t to stimulate aerospace R&D without penalizing airlines today–which will in turn retard aerospace innovation. So, should we fly more?
EPA Urged to Regulate Airplane Emissions [AP via Washington Post]
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Posted in Daily Departures on December 5, 2007 |