I just read an article that says U.S. airlines made $7.8 billion (with a “B”) in revenue from fees last year. Most of it from checked bag taxes (remember, if they can call an airport fee a tax, I can call an airline fee a tax). They may say they can’t raise “fares” but clearly they have pricing power in this area. Whether a fare is bundled or unbundled, it still comes out of the passenger’s pocket.
This makes some things I saw reported from executives at US Airways quite interesting.
First, the good.
US Airways CEO Doug Parker admits that airlines brought the new passenger rights rules on themselves. If airlines had just kept the promises made after the series of strandings in 2000, he says, the rules would have been unnecessary. He is right, and I give him credit for saying so. It would have been far better had these rules been made unnecessary by the airlines’ own initiative. Good for him for saying so.
Now, the bad.
Mr. Parker also said that air traffic control modernization is not worth it if it costs the airlines any money. Never mind that whatever costs there are would be made up over time in better efficiency (and would amount to less than a year’s worth of bag and other fees, err, taxes). If reforming air traffic control would cost airlines money in terms of equipage and so forth then airlines aren’t interested, at least his isn’t. Remember that the next time an airline executive blames an antiquated air traffic control system for their problems. (And remember it was airlines that were the main culprit in killing air traffic control modernization in the 1990’s because, as one airline CEO told me, it doesn’t put money onto our bottom line).
Now the ugly.
Another US Airways executive trotted out the “Do No Harm” mantra that airlines like to put out when arguing against anything that might improve infrastructure and lead to a more efficient system and more competition. He took out after the proposed increase in the passenger facility charge (PFC) from $4.50 to $7 (that’s a $2.50 change; can’t even check 10 percent of your bag for that much on some airlines). “Do No Harm” means, other words, do nothing to improve runways, taxiways and terminals because, airlines think, it will lead to a reduction in revenue to them. You see, airlines believe every nickel spent while a person is in the air transportation system, be it on an air fare, a bag tax, an airport fee, a hamburger or a newspaper, belongs to them. That the reason the system exists, essentially, is to provide revenue to airlines (notice I didn’t say profit, they care more, MUCH MORE, about revenue than profit, but more on that another time).
I looked up the origins of the “Do No Harm” expression, which comes from the Hippocratic Oath, taken by doctors when they begin their careers. In its most common use, the phrase is “First, Do No Harm,” more than implying that you move on to fix whatever problem exists. The word “first” is not part of the original oath; it became part of the usage later. But if you look at the oath, and its origins, you see that the purpose of “doing no harm” is to move on to actually fix the patient’s problem – it acknowledges that the doctor’s expertise and training can be used in both positive and negative ways, and the oath clearly points the doctor away from the negative and toward the positive. But the way it is used by airlines in the context of legislative debates is something completely different. In essence: do not fix air traffic control, do not build or improve infrastructure, do not promote competition, ensure that we can access every penny that is in a traveler’s pocket.
We work closely with airlines on a host of important issues – security, facilitation, environment, technical and other issues. Even on financial issues, I can’t think of a single airline that has not supported specific projects financed with PFC’s because they see those projects as being in their interests and understand that financing them another way will not be as efficient or effective. That is why I just don’t understand the blind spot many in the industry continue to have on air traffic control and on financing infrastructure. And that is why I hope that after this reauthorization is completed, the airport community and the airlines can come together and figure out a better way forward.