The Chicago Way

The city of Chicago as you may know has two major airports served by commercial carriers, O'Hare and Midway. Midway, the older and smaller of the two serves regional and  national destinations and is dominated by Southwest while O'Hare is a hub for American and United and serves both national and international destinations with regional feeders. At about 20 miles apart, the two airports are very close from an air traffic point of view and present special challenges for the volume of traffic each airport handles. This job falls to the FAA's organizational level of approach control (tracon) for the Chicago area known simply to pilots as "Chicago Approach". There's a story here involving the death of a six year old boy, but first some background.

The FAA organizationally divides their controllers into three general categories of tower controllers, approach/departure controllers and regional controllers or "Air route traffic control centers". On a routine flight, an aircraft would get taxi and takeoff instructions from tower controllers, local departure routing from the departure control (who are the same people as approach control) and after climb to altitude, routing from the regional center. So say on a flight from St. Louis to Midway an airliner would start by talking to St. Louis Lambert ground and tower controllers. After takeoff, the aircraft would talk to St. Louis departure control for the climb to altitude and then be handed off to Kansas City Center for enroute control.

The aircraft would be handed off to Chicago Center when crossing the boundary into Chicago's airspace who would issue initial descent clearance. As the aircraft descended below the center's airspace, it would be handed off to Chicago Approach who would vector it for an approach at which time it would be switched to Midway tower who would issue landing clearance followed by Midway ground control who would issue taxi instructions to the gate.

The system works, albeit inefficiently, is safe, and has been in use now for about 50 years. That's right, 50 years. The current air traffic control system in the United States is essentially the same one that was used to guide TWA and Pan Am 707s back in the 60s. Oh sure there have been some upgrades and technology improvements in things like communications and radar, but the operational concept of an air traffic controller with a radar individually controlling airliners through radio calls is the same as it ever was since the dawn of the modern air transport era. In fact, my description of a routine flight above could've been lifted directly out of one of those old Time-Life technology books that used to sit on my parent's bookshelf as I was growing up back in the '60s.

A Brief History of ATC Update Efforts

The history of the US government's attempts to update the ATC system is long and expensive, running into tens of billions of dollars over the past few decades with little to show. Starting in the 1980s the FAA implemented a plan called the Advanced Automation System which was projected to cost $2.5 billion but ended up years delayed and costing $7.6 billion even after parts of the program were abandoned. The FAA blamed the shortcomings on federal personnel and procurement constraints. While there have been efforts to reform the bureaucracy to make the FAA into a performance based organization they have met with limited success. These have included reforms such as having air traffic services overseen by a board of directors and managed by a chief operating officer.

In 2000 Congress passed the Aviation Investment and Reform Act for the 21st Century (AIR-21) to facilitate some of the recommended changes and still the bureaucracy managed to stifle reform in a classic turf battle over the responsibilities of the FAA administrator and the proposed air traffic COO according to a GAO report. The picture that continually emerges is that the FAA is a stubbornly recalcitrant bureaucracy resistant to performance enhancing change and the air traffic control system reflects this reality.

In 2003 as a result of some of these criticisms and cost overruns, Congress passed and President Bush signed into law the Vision 100 - Century of Aviation Reauthorization Act. This law established the Joint Planning and Development Office whose mission it is to manage the design and implementation of what is now known as the Next Generation Air Transportation System (NextGen). Coordinating between a half dozen federal agencies such as the DOT, FAA, DOD, Homeland Security, Nasa, and private industry, NextGen is the government's latest (and final?) drive to hopefully achieve the elusive update of the National Airspace System.

Fast forward 10 years and some tens of billions of dollars later, and we are on the cusp of a new era of aircraft control. Utilizing updated technologies such as GPS navigation, advanced computer processing power, and communications, the hope for the NextGen system is to finally revolutionize air traffic control into a highly automated control system for commercial air travel. The benefits to such a system are manifest. They include substantial fuel savings with a concurrent reduction in emissions, significant improvement in the utilization of current airspace resulting in fewer delays and increased airspace capacity, along with the use of advanced computational tools for efficient weather avoidance and traffic conflict resolution. All of these goals are considered to be necessities as traffic projections show the current system to be at capacity.

One of the ways that the NextGen airspace system more efficiently uses airspace is to fit more airplanes onto more closely spaced routes. This is accomplished using highly accurate, GPS guided, automatically flown routes. This system of automated flying, known as required navigational performance or RNP, puts airplanes on precise pre-determined routes from departure through approach and not only prescribes their horizontal position but vertical as well. When we talk about precise aircraft positioning, RNP compliant aircraft are required to keep their horizontal position accuracy to within 0.1 nautical mile minimum and vertical position accuracy under 100 feet. Most aircraft do much better than that. Once placed on track, airplanes will fly a precise path through the air needing very little outside attention.

Oh, and one other result of the automation of aircraft routing through RNP: fewer controllers.

Enter Labor

The Professional Air Traffic Controllers Organization (PATCO) was formed in January 1968 and it took only two short years before they orchestrated their first of many job actions by staging a sick out over wage and benefit issues. Patco is most famous though for their run in with the newly elected President Ronald Reagan in 1981. In August of that year after failing to reach an agreement with the FAA, 12,300 Patco controllers went on strike grounding much of the nation's air traffic. Reagan responded by firing all the striking controllers after a 48hr warning. Patco disbanded and the FAA's controllers were without union representation until 1987 when a new union, the National Air Traffic Controllers Association (NATCA) was formed.

With average compensation of controllers on the order of $150k, more than many of the pilots flying the planes they control, the FAA has more than ample incentive to reduce their labor costs through the use of automation. Even though controllers hired in the wake of the Patco strike are reaching retirement age, controllers still on the job are apparently not thrilled about automation reducing their ranks. This is simple human nature. People naturally place value on what they do for a living and being replaced by a machine does little to enhance that value.

A Tragedy

The night of December 8, 2005 was a snowy one in Chicago. A winter storm was moving through the area and Midway airport was experiencing low visibilities and heavy snow. The wind was blowing from the southeast which would normally mean that aircraft would be landing on the southeast facing runway to land into the wind. On this night however, Midway bound aircraft were landing to the northwest on runway 31C with a tailwind. There was a good reason for this on this particular evening and that was that the visibility was not good enough for the approach to the southeast runway while it was good enough to land to the northwest with a tailwind.

Tragically on this night, a Southwest 737, Flight 1248, failed to stop on the pavement and crashed through the airport perimeter fence into the intersection of W. 55th St and S. Central Avenue hitting the car in which Joshua Wood, 6, was riding killing him. It is the only fatality ever to be attributed to Southwest Airlines in it's entire history. The NTSB, in their investigation noted among other things that if not for the tailwind, the aircraft could've stopped within the confines of the runway, snow notwithstanding.

Tailwind landings, though not optimal, are not inherently dangerous unless other factors come into play such as runway length or slippery pavement. One reason pilots prefer to land into a headwind is that a headwind approach reduces the speed that the aircraft is travelling over the ground while a tailwind increases it. And as the amount of kinetic energy varies with the square of the velocity of a moving object (KE=1/2MV2), a little tailwind means a lot more energy must be dissipated on the runway by the brakes and reversers. The snowy short runway. Midway's main runway is only about 6500 feet long - relatively short for airliners - and Midway did not have a proper "overrun" or pavement extending past the runway due to the age of the airport allowing it to be grandfathered past safety regulations requiring such pavement extensions.

But, there was another reason that played into why Midway was landing to the northwest that snowy night. It was this: they almost always landed to the northwest. Unless the tailwind increased to more than 10 kts which is the allowed limit, Midway favored runway 31C, the northwest facing runway. The reason for this? O'Hare. O'Hare is a mere 20 miles northwest of Midway which is nearly next door as far as airliners are concerned. Flying an instrument approach into Midway would put them right into the O'Hare departure corridor. For airliners to fly an instrument approach to Midway's runway 13C, they must impede on O'Hare's airspace which of course greatly complicated the controller's jobs. Or at any rate they used to.

Any instrument approach is simply a way to get an airplane through the clouds to land on a runway. Since the early days of aviation, the only available way to do this was with radio waves. Airplanes tune into a directional radio beacon and follow it to the runway. The problem with radio waves is they don't bend. Any approach which followed a radio beacon was by definition a straight-in approach. RNP has changed all that.

Part of the brilliance of NextGen and RNP is that aircraft no longer depend on ground-based aids to navigation, i.e radio beacons. GPS and onboard equipment provide the navigational information used to direct modern airliners. Once freed from the tyranny of the radio beam, and given automation tools and autopilots which can fly a precise route, approach designers were free to construct what has long been an elusive goal: the curved approach. What this meant is that two close airports were no longer stepping on each other's toes. No longer would airspace issues determine traffic patterns over safety concerns such as tailwind landings. At least that's the dream. Now the reality.

The Chicago Way

Southwest in 2011 became one of the first airlines to install the equipment to become fully RNP compliant. This effort consisted of millions of dollars of advanced equipment to be installed in aircraft and millions more dollars in training costs for its pilots. The FAA for its part was to design and certify the many RNP compliant approaches and then allow the RNP aircraft to utilize them to their mutual benefit. But a funny thing happened along the way to the future of aviation: nothing.

After a brief period where Southwest required its pilots to log RNP approaches for initial qualification they found that controllers simply didn't want to offer those approaches on the grounds that it was difficult to sequence RNP aircraft in with non-RNP aircraft. And rather than giving the RNP compliant aircraft priority, they simply got in line with everyone else, like they always had. This has been a common complaint among airlines which have upgraded to RNP..

And nine years after the crash of Southwest 1248, Midway got it's first RNP arrival and an RNP approach to runway 22 which previously had no approach but relied on pilots executing a visual circling maneuver to land when the winds dictated. But this is Chicago. Change happens when the shop steward says it is going to happen apparently.

Having recently flown the new arrivals, we can attest to this new reality. While flying into Philadelphia or perhaps LAX might entail one instruction from the controller to fly the entire procedure with no further input, the Chicago controllers we've encountered are happily oblivious to all this spending as much time micro-managing aircraft as they've ever done. It's as if nothing has changed at all. And this was born out recently by a conversation with a Chicago ATC manager who relayed that the issue is the perceived threat to jobs by the very controllers who are entrusted to implement the future.

So the next time you find yourself on a ground delay while waiting to take off to Chicago, remember, it's the Chicago Way.

Middle Class Decline - Airline Edition

There has been much talk of the decline of the middle class during the so-called recovery. Anyone who cares to look can find a fusillade of statistics backing up the assertion that the middle class in America is slowly being bled to death. In things like retail sales or the employment rate the story told is one of the middle class slowly but inexorably hollowing out.  To be sure, the demise of the middle class is not due solely to the recession, but is also due in part to the dismantling of the American manufacturing base which has been happening for decades. Add in a government piling on with a war on wealth creation and the results are inevitable.

As the middle class sees its economic prospects dim, the great engine of consumption which was powered by the middle class, purchasing everything from automobiles to clothes to TVs is beginning to sputter. Retailers that serve the middle class such as JC Penney and Sears are seeing sales lag as median incomes decline. While Walmart has been warning on earnings, the Washington Post reports that America's second largest employer is now a temp agency. Recently as well, the non-partisan Congressional Budget Office has projected that the Affordable Care Act will result in the destruction of nearly 2.5 million jobs. Clearly, things are not well. Now this decline may be manifesting itself in another middle class consumer item: air travel.

Prior to the deregulation of air travel in 1978, flying was a luxury reserved for the well to do. Flights were expensive and flying was considered a province of the elite. That all changed with the Airline Deregulation Act of 1978 signed into law by Jimmy Carter on October 24 of that year. As the Civil Aeronautics Board (CAB) sunsetted, air travel became inexpensive and democratized. For the first time ever, middle class families and businessmen could afford to fly. With the collapse of oil prices in the early 80s, and the entrance of low cost carriers like Southwest, air travel exploded.

From 1980 to 2000, US commercial passenger airline enplanements more than doubled from about 310 million to over 710 million. Herb Kelleher, CEO of Southwest Airlines once commented that their main competitor was not another airline but rather the automobile. Southwest was drawing passengers out of their cars and into airplanes for short haul trips of several hundred miles. The middle class was now free to "move about the country" as a Southwest ad tagline put it. Flying to another city for a day to see a football game, once an activity reserved for rich playboys, was now within reach of the guys working in the mailroom and taking the family by air to grandma's for the holidays was becoming routine.

Something, though has been happening to the leisure air travel market. Southwest, our favorite airline, has been abandoning it's core competency of high frequency short haul markets. The old saying goes "dance with the one that brung you" but the one that brought short haul flying (the public) has apparently left the building. Southwest has acknowledged a dramatic drop off of domestic short haul traffic, and has responded with the abandonment of many short haul city pairs which were formerly profitable. Markets such as Pittsburgh-Philly, Indy-Chicago, Spokane-Seattle, and Reno-Oakland which have been the bread and butter of Southwest's short haul presence have been terminated leaving travelers the option of driving or staying home.

The reasons for this traffic collapse are varied. They are probably a combination of the hassle and time factor due to the TSA, and cost. While fuel has become more expensive for both automobiles and airlines, adding in the additional factor of a body cavity search by the dedicated and fully pensioned goons staffing the TSA checkpoints probably tips the scale in favor of driving four hours vice waiting at an airport for three hours for a one hour flight. Other factors which may be hurting short haul flying might be the increased fidelity of teleconferencing and as mentioned above, in an economy losing it's middle class, there are just fewer people with disposable income. The rich will continue to fly but there aren't that many of them.

The factor though that may most impact short haul flying is that it has been relatively cheap. Therefore, the persons most likely to fly to a nearby city might be either an employee of a small business, or a leisure traveler on a weekend trip. Both of these types of customers will be quite price sensitive. Make their journey just a little more expensive or time consuming and they will forgo the pain of flying for a Skype session or for watching the game on TV.

Southwest Adjusts

As most of the growth in air travel in the past few decades has been due to those of more modest means taking to the air, the new reality will hit airlines especially hard. Fuel prices are not likely to decline much below the current price of $100 per barrel and other costs are unlikely to moderate as government piles on regulatory requirements while labor demands an increasing share of revenue. Southwest, acting like a team without a conference, has been forced from their traditional pocket of short haul flying and is scrambling for the sideline of international flying while hoping to not run out the clock. Time will tell whether they can pull it off.

After the third of the mega-mergers has resulted in three gargantuan American airlines with globe-spanning networks and equally gargantuan loyalty programs, Southwest is again the runt of the litter. Too big to run under the radar as a nimble low cost carrier (LCC) as their costs approach and even exceed those of the new triumvirate, yet not large enough to challenge the giants in terms of network reach or loyalty rewards, they have their work cut out for them. Add in some labor unrest with six open labor contracts and operational miscues leading to abysmal on-time performance, and CEO Gary Kelly may need some real magic to pull a rabbit out of this dingy hat.

Don't count them out just yet though. With the Dallas Love Field restrictive Wright Amendment expiring this year allowing more flights out of Texas from Love, Southwest will be a formidable pain in American's side as Love Field is much closer to downtown Dallas. Likewise, Southwest's acquisition of 54 slots at Reagan National (DCA) as a result of a required divestiture from the American USAir merger will provide a huge presence in downtown Washington. Add in additional slots at New York's LaGuardia (LGA) and Southwest has it's foot firmly in the door of two very profitable markets. Southwest's opening foray into international waters this summer may help to offset their retreat from their humble origins as a three city intra-state carrier.

It's Here!

We've commented on the coming pilot shortage before as it has been said to be imminent for perhaps a decade now. Always there has been some event to forestall its arrival, but like the long awaited and feared radioactive flotsam from the Japanese tsunami, it seems to be finally washing up on our shores. An article in today's Wall Street Journal (subscription needed) details United Airline's decision to drastically reduce the size of their Cleveland hub. Make a note that the proposed cuts are to commuter aircraft, the small 50 seat jets flying to regional destinations. Mainline flying with narrow-body Boeings and Airbuses will be unchanged (for now).

A new federal rule that requires new pilots to have 1,500 hours of flight experience, instead of 250 hours, has caused a shortfall in regional pilot ranks. This is causing a creeping pilot shortage among big airlines, which routinely recruit new aviators from regional carriers. 

"Although this is an industry issue, it directly affects us and requires us to reduce our regional-partner flying, as several of our regional partners are beginning to have difficulty flying their schedules due to reduced new-pilot availability," the CEO said in the memo.

So apparently they can't fill their schedule partly due to not being able to find enough pilots to hire with the requisite hours. One must read between the lines because what the CEO really meant to say is that they can't find enough $18,000/yr pilots who are willing to spend perhaps $60k to get the ratings and experience for that $18k starting salary. Perhaps after a while there might be found pilots at higher wages. But that's the rub, isn't it? (By the way, the military is doing a better job of hanging onto their pilots so that source is drying up.)

At the higher wages necessary to attract pilots, the economics of flying commuter aircraft may not work. Buying a ticket on a commuter aircraft is already crazy expensive and is likely to get more so. At some point customers will simply drive. Other likely trends will be to see an acceleration of the grounding of the now uneconomic 50 seaters in favor of larger 90 or 130 seat aircraft. The problem with larger aircraft is some markets just don't have the demand to fill a 130 seat aircraft nor the pricing power to support a 50 seat aircraft. These destinations, save for the government's Essential Air Service subsidy program will lose commercial air service.

We've mentioned before that the cause of all this mischief was the rule change resulting from laws passed in the wake of the Colgan crash of several years ago. Even though both pilots in that accident had well above the newly established minimums, Congress had to show that they were doing something to fix an air transportation system that is already the safest in the world. Forcing people into their cars where they are orders of magnitude more likely to be killed or injured in auto wrecks seems just like the perfect fix. Economics is (apparently) hard.

Chicken Tonight!

There's an old saying that goes "sometimes chicken, sometimes feathers". Well I was firmly in the chicken column tonight. I was supposed to commute to Detroit last night to begin my normal three day trip this morning but the fates had something different in mind.

Having checked the weather, it was apparent that another polar vortex (the kind that are the cause of or effect from global warming) was descending on the hamlet of Detroit. I'm generally good down to about 25°F but the forecast was for temps to drop to -15°F so I packed my scarf and hat and wore the leather preparing for a chilly night in the crash pad.

But, as I walked into the Pittsburgh terminal and looked up at the big board, my flight was showing cancelled. There was,  however, another flight that was delayed and still boarding. Hurrying through security and to the gate I was just in time to see the jet bridge pull back and the agent I affectionately call the troll say "sorry sweetie".

This was no big deal as while I usually take the last flight up to avoid an extra minute in South Detroit, our commuter policy meant scheduling just had to catch me up with my trip the next morning and though I would forfeit the pay for any missed legs, I wouldn't get a no-show. So I called wifey to return to the airport for a ride and then scheduling.

Well it seems that Detroit was having a bad night and after explaining my sitch to the scheduler, she told me that my entire next day of flying had been cancelled and my only duty was to deadhead to St. Louis for the overnight. This meant an extra day off, and no loss of pay. I'd just get myself to St. Louis. Yipee!

Of course this means somewhere down the road there will be a price to pay. It's the iron clad law of the commuter.

Who's Driving?

The debate concerning automation of transportation continues:

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Duopolistic battle between two man-machine visions

Sometimes when I talk about driverless cars I am asked to what extent we already have driverless planes today. The answer is a bit complicated:

The broader issue…is raised in an FAA report: "For any given situation, who will have final control authority?" The pilot or the flight management computer? Aircraft manufacturers and their automation designers have somewhat different philosophies. Airbus has tended to favor the machine — its automation is designed essentially to prevent the plane from getting outside its safe "flight envelope" no matter what the pilot does. Meanwhile, Boeing tends to give the pilot the final word — and its adherents can be adamant. A Boeing-flying Delta captain puts it this way: "When shit hits the fan, a pilot should be able to disengage all the magic and fly the airplane with basics…All you can do is hope the software engineers haven't screwed you with some magical sub-mode that, [sitting] in an office with a nice warm cup of coffee, makes sense at the time." For every fan of Airbus's "make-it-impossible-to-crash" approach, there's a proponent of Boeing's support for new cockpit technology only where "there is no adverse effect to the human-machine interface."

That is from Mark Gerchick's Full Upright and Locket Position: Not-so-Comfortable Truths about Air Travel Today, a pretty good book although much of the material may be already known to some of the potential readers.

It's interesting that the two remaining aircraft manufacturers have different philosophies concerning how humans are to interact with the machine. As mentioned above, Boeing aircraft can still have all automation switched off and their aircraft flown the exact same way Wilbur and Orville flew theirs. Airbus has taken a different route beginning with their A320 jets where there will always be some measure of automation active. It can never be completely turned off.

There was a crash of an Airbus A320 on a demonstration flight years ago in front of a crowd. The test pilots at the controls wanted to display a safety mode for the crowd which included potential customers which would not allow the aircraft to stall. The pilots mistakenly started their pass too low and the software safety mode never engaged as it was programmed to believe the aircraft was actually landing at such a low altitude. This crash destroyed the airplane and resulted in many morbid jokes comparing Airbus aircraft to chainsaws, but demonstrated how humans, design test pilots in this case, can allow software to fly an airplane into the dirt if they don't watch it closely every second. The pilots did attempt to save the aircraft but their inputs came too late to make a difference.

As we've mentioned before, humans are uniquely unsuited to sit on their behinds and watch computers fly or operate any machinery for that matter. After a while they will disengage. If the human is supposed to be the backup for a computer failure, they will be at a great disadvantage in saving the day due to complacency and the startle effect as we have seen in several recent accidents.

As stated in a recent FAA report, the issue is not going to go away and the danger of automation failures resulting in crashes increases as the residual of genuine piloting skills inevitably ebbs.

Automation Deflation

Well, there has been lots of news lately concerning the automation of aircraft control and the increasing perception that this may not be the best of ideas.

First on our list is the release of a report commissioned by the FAA concerning the use of automation on aircraft and the realization that there are negative unintended consequences. The report is available here.

The next item we'd like to point out is an interesting article in the Atlantic which starts with cockpit automation but continues on to draw conclusions about how the automation of tasks from flying airplanes to stock picking to reading X-rays eventually makes us stupid. Read it here.

Next on our tour is a NTSB hearing on the crash of Asiana 214, the 777 airliner which crashed on a clear day at San Francisco. There is quite a bit of talk concerning the challenges of landing an airliner on a calm clear day and how the automation failures may have contributed to the accident. Read a summary of the interviews here. While we have made our thoughts on this subject clear, in a backhanded way we may owe a debt of gratitude to these pilots who provided such a clear and unambiguous illustration of the dangers of over reliance on automation.

Lastly, we have a story which details how memory of an event may be impaired by the act of taking pictures of that event. We are not psychologists but found this story interesting for the reason that when a machine is inserted between humans and an activity, memories of that activity are diminished. This may or may not have implications for cockpit automation but it seems intriguing.

Please Fasten Your Seatbelt (Update)

We hate to point out that our predictions made recently were scarily accurate (not really), but here goes:

New pilot rest rules are now waiting in the wings and ready for implementation on January 1st. Having to assign flight duty to pilots a month in advance, the new schedules are available and the trend is clear. Due to the hard limits of the new rules, airlines are preemptively scheduling pilots for days with less flying and longer overnights. This if you remember, is due to the new rules not allowing pilots to finish a trip that they were legal to start but due to delays exceeded hard duty limits. Therefore, should a pilot start a trip but become delayed due to say air traffic or other cause and are projected to exceed the time limit, the aircraft must taxi back to the gate and is not permitted to depart regardless of how the pilots may feel.

Airlines, as we predicted, will need to increase staffing to cover the same amount of flying. And as day follows night, our airline recently announced the hiring of several hundred pilots to cover an essentially flat flying schedule. Some of this was attributed to increased vacation time due to longevity, but the rest was laid directly at the feet of the new Part 117 rest rules. So now the airline's pilot staffing costs rise and pilots themselves, who are paid by the hour, will have to spend more days at work on balance to make the same income. And all for negligible safety benefits. Well done, morons.

Ok, our next topic was how the TSA is helping to systematically kill the short haul airline market. Well, the news just broke that the TSA security fee was raised 124% from $2.50 to $5.60 per flight segment as part of the recent budget deal. Almost on cue, Southwest, our favorite airline announced the termination of service to three smaller market airports, Jackson MS, Key West FL, and Branson, Mo. In a cogent analysis, Motley Fool explains that with rising costs driving break even load factors into the 70+ percent ranges, airlines need to fly airplanes full of full fare paying customers. Southwest also recently picked up more slots at LaGuardia and will be bidding on slots at Reagan which American was required to divest as a condition of their merger with USAir.

So to our great relief, fliers departing from New York and DC (anyone you know?) will benefit from the increased presence of a low cost carrier (which isn't really so low cost anymore) but folks in Branson and Jackson and Key West may be driving more.

Southwest 345 Update

We saw this photo of the incident aircraft which crash landed at LGA last summer. It has been put back on it's gear, shrinkwrapped and sent by barge to Albany, NY while the investigation proceeds. We have it on authority that the aircraft will not be repaired as it is not cost effective to do so. Apparently the fuselage was damaged or crinkled near the main gear and the costs of repair exceed the value of having the aircraft put back into service. The captain of the aircraft who, according to NTSB information, took control of the aircraft on short final and caused the nose gear first landing has been terminated. There are conflicting reports that the pilot in question resigned rather than was terminated but this may only be a difference in semantics.

Please Fasten Your Seatbelts

There is not much to say about most airplane journeys. Anything remarkable must be disastrous, so you define a good flight by negatives: you didn't get hijacked, you didn't crash, you didn't throw up, you weren't late, you weren't nauseated by the food. So you're grateful. 

— Paul Theroux, The Old Patagonian Express, 1979.

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. 

— Warren Buffett, annual letter to Berkshire Hathaway shareholders, February 2008.

Being in the airline business has never been easy...at least for managers who try to make some money at it. The industry is simultaneously capital intensive: dependent on very expensive airplanes, labor intensive: dependent on a multiplicity of unionized labor groups, and operations are subject to the vagaries of a politicized oil supply from an unstable part of the world, along with network disruptions due to weather and technology. Piling on top of these challenges to profitability are cascading layers of government from local airport authorities each acting as a duchy unto itself with captive airline tenants as vassals, to the federal government, a multi-headed hydra of taxation, regulation, and control.

 Herb Kelleher, former CEO of Southwest Airlines once noted that in no other business does the government actually control the production line as the FAA does the movement of aircraft. Pace their personification as the steely eyed technicians on whose every move passenger's lives depend, FAA air traffic controllers probably have more in common with your average <facetious> friendly and perky </facetious> DMV receptionist. They and their union have figured out that working harder or faster means just that: harder and faster work with no reward. Hence the ongoing job action by FAA employees masquerading as traffic delays and congestion. The whole enterprise should be privatized like they've done up in socialist Canada. (Who's socialist now?) 

The government has enlisted airlines as quasi public utilities for use as political footballs and ATMs for decades. When added up, airlines are taxed more heavily than most "sin" taxes levied on alcohol, tobacco and guns. And those taxes are designed to reduce use of those products. Apparently embarrassed at the panoply of taxes, the DOT won't even permit airlines to break out their fares separate of the taxes applied on their web sites (like every other business on the planet does). They must show fares that already have the taxes and fees included.

Even just this week, the bright lights over at Eric Holder's thoroughly politicized and craven Justice Department Antitrust Division have decided that after allowing two mega-mergers, now is the time to close the barn door on the UsAir American merger. Never mind that the deal has been approved by the shareholders and unions of both airlines, in an industry where network size is a main competitive advantage, we will be left with a duopoly of  United/Continental and Delta/Northwest, while a stunted American and UsAir lose business traffic to the two airlines with larger networks and loyalty programs, and leisure traffic to Southwest and other low cost carriers (LCCs).

For Southwest, our favorite airline, this action by Justice is great news because it was likely going to find itself as a team without a conference in the new landscape. Southwest has recently been forced from it's traditional pocket as a low fare point-to-point carrier, but is in no way conditioned or large enough to make a break on a field populated by behemoths bulked up through the juicing of merger mania. Southwest, along with all airlines collectively face three new and one old threat which will significantly alter the competitive landscape for the industry. Those threats are new rest rules for pilots, new experience requirements for pilots, the TSA, and a new breed of ultra low cost carriers. Let us explore shall we?

New Rest Rules

Following the crash of Colgan Air 3407, Congress not wanting to let a crisis go to waste, enacted the Airline Safety and Federal Aviation Administration Extension Act of 2010 which was signed by the President on August 1st, 2010. The bill was sponsored by James Oberstar, (D, Mn) a well known friend of airline unions. This bill served as the perfect vehicle to enact a long standing wish list of union priorities masquerading as safety initiatives. Safety has long been used as a cover under which unions run quality of life and pay enhancements. Truth be told, in days gone by, this was a necessary function to pass needed safety enhancements. However, after being supplanted by armies of government regulators in recent decades, union safety committees are today more concerned with featherbedding and, often in conjunction with the managements of established market players, throwing up barriers to entry to newer nimbler competitors.

Though the Colgan crash was ultimately blamed on an incompetent pilot, the legislation enacted focused on both rest rules for pilots and also minimum experience requirements for new hire pilots. Both are pernicious. Rest rules for pilots operating commercial aircraft have up to this point been based on the number of hours flown within a certain timeframe. One of the rules for instance constrained pilots to operating no more than 30 flight or "block" hours in seven days. This might entail twice that many hours on duty due to sit times, which weren't counted. The new regulations, FAR Part 117 rules which take effect next January, are an entire overhaul and include limits on "flight duty periods" or days at work among other changes. 

The devil, as usual, is in the details. The big change to the rules is a change to how the rules are applied during irregular operations (delays). Previously, if a crew was legal to start their day but then ran into delays which might have had them fly more than eight flight hours in a day, they were legal to finish their flight sequence. Keep in mind that all major airlines have no-fault fatigue policies so under the old rules a crew could always decline to finish their sequence if they felt too tired. The new rules however, prohibit crews from exceeding the hard duty limits regardless of where they are or how they feel. Crews are even prohibited from taking off if, for instance, the planned flight time would mean an arrival say even ten minutes past their hard duty limit.

It doesn't sound like a particularly harsh rule until you consider the consequences of what happens during an even minor weather event. On a typical day following a gate hold for a passing weather front, delays getting airborne can easily top an hour. Since any time after push back from the gate is counted as flight time or "block hours" in FAA terminology, a crew which was scheduled for a seven hour and thirty minute day would become illegal under the rules and would have to taxi back to the gate to be replaced after a 31 minute delay. This of course assumes that replacement or "reserve" pilots are available. If this event happened at an airport other than a crew domicile where reserves are assigned, the most likely outcome would be a flight cancellation.

Realizing this, airlines will start preemptively scheduling their pilots for shorter duty days at delay prone airports, or simply be quicker to cancel flights for even relatively small anticipated delays. Both of these actions will raise costs, fares, and increase cancellations all for a negligible effect on flight safety. 

New Experience Requirements

Included also in the FAA Extension Act mentioned above are new experience requirements for new hire airline pilots. Up to now, pilots looking for a career in aviation had to attain a commercial pilot rating and have at least 250 hours of total time before applying to a commuter airline. They would build this time either on their own nickel or more likely as an instructor or perhaps as a pipeline inspector or banner tow pilot flying a single engine aircraft.  The new rules require all prospective pilots looking for work at a commercial carrier to have an Airline Transport Pilot (ATP) certificate which was previously only required for a captain and requires a minimum of 1500 hours of total flight time. With this one move, Congress and the FAA have done more to kill the commuter airline business than any number of commuter airline crashes ever could.

Since Orville and Wilbur first took to the skies, it has been a time honored tradition that aviation is something that was learned on the job. It could be no other way. Airplanes are expensive to own and expensive to fly. Fuel is expensive and renting a simple Cessna with an instructor can easily cost $150 per hour with forty hours needed for a private pilot's license. Secretary of Transportation Anthony Foxx was quoted saying  "We owe it to the traveling public to have only the most qualified and best trained pilots." Sure you do Tony. Just one question: where do you suppose this supply of 1500 hour pilots is going to come from? Flying banners around for a few hundred hours a year or perhaps crop dusting will only take about eight years or so before you are qualified to apply for a job that pays $16,000 to start.

Well, what about degree programs that offer flight training? They are out there and in fact the FAA will give graduates of such programs a break on the required hours all the way down to 1250. A check on the Embry-Riddle website, a respected aviation school, shows comprehensive fees at about $43k per year plus $15k extra for flight costs. The good news is that with hard work, you might be able to graduate in three years with an education costing $174k for that same $16k starting salary. 

If you get your flight experience in the military, the FAA will waive the new hire hours requirement all the way down to 750 hours. The trick is that the Air Force is now requiring a ten year commitment to the service following completion of pilot training. This means that no pilots with fewer than about 12 years of experience will be leaving the military for the airlines which makes the point moot. Additionally, at 12 years in a military career, the pension which only vests after 20 years looks quite good. As a result of the long commitment, pilot slots are going unfilled at the Air Force Academy, and of those who do become pilots, fewer are likely to leave the service for a relatively low paying airline job.

Now we'll be honest in pointing out that while doing practically nothing for safety, (remember, the pilots in the Colgan accident had 3379 and 2244 flight hours respectively) this new rule is an excellent barrier to entry and should serve nicely to bolster wage demands of those of us who are already in the profession. We had the opportunity to speak to the CEO of a commuter airline recently and asked what the plan for staffing his airline was re the new rules. After lots of tap dancing, it became clear that the plan was to park airplanes. There simply wouldn't be pilots to fly them. This means a triage of cutting the least profitable routes while raising fares on routes that will bear the cost and customers who are not able to retreat to their automobiles. With major airlines needing to hire thousands of pilots to replace retiring boomers, look for a lot of parked airplanes. 

The TSA

Which brings us to one of our favorite federal agencies. The TSA, (thousands standing around) while nominally a security organization, has done an excellent job boosting gasoline and auto sales as passengers in the decade since 9/11 have decided that driving up to six or eight hours is preferable to a figurative body cavity search by government goons. There's not much more to be said about the TSA that hasn't already been said or posted to YouTube except that they are truly an exemplary federal agency embodying everything the public finds endearing about caring bureaucrats. It's all there.

Getting back to our favorite airline, a trend has become clear that Southwest is abandoning its core competency of low cost, high frequency point-to-point operations. In the past year or so Southwest has abandoned city pairs such as Philadelphia-Pittsburgh, Spokane-Seattle, Indianapolis-Chicago, Orlando-Ft. Lauderdale, and Baltimore-Newark to name but a few. The reasoning is obvious; they can't make money flying these routes. Certainly lots of people still want to go to these places but have found that after factoring in the time and humiliation of the security "process" their cars look more attractive. Herb Kelleher once noted that Southwest was good at drawing customers not from its competitors, but rather from their automobiles. Well it looks like Kelleher's business plan has met its match in a federal bureaucracy. Who'da guessed?

Ultra Low Cost Carriers

A new breed of ultra low cost carriers have recently debuted which seem to threaten to do to the established LCCs (Southwest, JetBlue) what those carriers did years ago to the established mainline carriers. Airlines such as Spirit, Allegiant and Frontier are based on a truly skeletal service model. Charging for everything imaginable such as aisle seats and stowing a bag in the overhead bin, these airlines are seeking to cherry pick truly price sensitive flyers. With new fleets, and young low cost employees, these airlines have margins which are nearly double that of  the traditional LCCs and mainline carriers. The question is how durable will this model be and how will it scale? With high dissatisfaction rates, the American consumer may have reached their limit on tolerating bare bones flying. Then again, low fares have proven to be the secret sauce of the aviation industry for some time now regardless of service.

In conclusion, the forecast as usual, is doom and gloom. But then again in this business it's the same as it ever was.

  

Nose Gear Failure on Landing

Southwest Airlines flight 345 suffered a failure of its nose gear upon landing on LaGuardia's runway 4. The aircraft skidded to a halt and was evacuated with only minor injuries. NTSB photos show the nose gear which normally folds forwards on retraction into the nose gear bay had collapsed rearward.

The NTSB is investigating the cause of this incident and will determine if the landing was within normal parameters or not, and whether or not the nose gear suffered structural failure due to a defect.

Available audio tape of the radio transmissions indicate that the aircraft had accepted a clearance for an ILS approach. As opposed to a visual approach, an ILS approach must be flown with reference to an electronic signal which should preclude a steep or unstabilized approach. An unstabilized approach is generally one of the contributing factors to a firm landing, though a firm landing alone should not cause the failure of gear components. Even a very firm landing as experienced within the aircraft is usually well within the design tolerance of most airliners.

During a normal landing on an aircraft with tricycle gear, such as this 737 has, the main gear touch down first, followed by the nose gear as the aircraft decelerates. The NTSB has posted on it's website that video and other evidence indicate the aircraft may have touched down on its nose gear first. A nose gear first landing is highly unusual and could contribute to a failure of the landing gear. The NTSB has also tweeted on it's site that the aircraft pitch was a negative three degrees at touchdown which would be consistent with a nose gear first landing.

The aircraft was landing with the maximum flap setting of 40 which generally means the aircraft will fly at a lower pitch angle than with a lesser flap setting. A maximum flap setting for landing is recommended for landing on short runways, as it results in a lower approach airspeed and less kinetic energy to stop. Also of note is that runway 4 at LaGuardia is a relatively short runway with only 7000 feet of pavement available followed by an overrun and water.

When landing on a short runway, pilots must land by necessity in the first thousand feet or so of the landing zone and do not have the option of "floating" the aircraft in search of a smooth touchdown as might be possible on a longer runway. Should the landing not set up quite right, there is very little room for correction and the choices would be to either accept a firm touch down or to go around.

The investigation will undoubtedly uncover the exact cause of this incident, though if it is determined that the nose gear touched down first, these pilots will have some 'splainin to do. Stay tuned.