Friday, June 17, 2005

Do You Feel Safer Now?

Lots of ink has been spilled on the issue of airline security since 9/11. So the question to ask is are airline passengers any safer after the untold billions of dollars which have been spent on security in the aftermath or have we all lost our collective minds? From the view through the peep hole in our new carbon/kevlar bulletproof doors, I'd have to say yes....and yes.

First the good news: There hasn't been a hijacking or bombing of a US airliner since 9/11 and maybe this is even due in some part to the creation of the TSA and its mind numbing bureaucracy. But we don't know if outside of Richard Reid, the terrorist who failed to light his shoe bomb, whether Al Queda has even tried to attack airliners since 9/11. And it must be noted that Reid was foiled by an on the ball flight attendant and not any security measures put in place by the government.

A large element of security is the perception that is given to the enemy by existing security measures. Perhaps by installing such a Byzantine, impenetrably dense (stupid, not thick) security system in US airports, we have successfully telegraphed to prospective terrorists that we are serious about security and that any attempt to breach it will fail. Perhaps, but unlikely. My feeling is that while jihadists the world over head to the terrorist superbowl in Iraq, few resources are left for planning new attacks on US soil.

As far as the actual effectiveness of our current security measures, one need only look to Israel, a country which is actually serious about airline security to find our measures wanting. For starters, US airports and airlines are simply too numerous to secure in any meaningful way. Airport screeners must be successful 100% of the time while the terrorist need only be successful once to cause a disaster. Secondly, in spite of the carnage committed by 19 young Arab men, political correctness still holds the day when it comes to any whiff of profiling, be it racial, national origin, or even using publicly available commercial databases for data mining. This is just insanity.

And lastly, the long lines in the terminals are in many ways a Potemkin village of security for public consumption. Inside the terminal, pilots are routinely frisked and patted down to prevent their carrying of any item which may assist them in gaining access to the cockpit when that is actually their job description. Outside the terminal, however, thousands of workers come and go through gate or door with only a key code or swipe of a magnetic card. Sure they're checked for criminal history when hired, but how difficult would it be to find a young jihadist without a criminal record to hire on as a baggage loader and toss his bag lunch (bomb) into the belly of the plane he is loading?

There, do you feel safer now?

Wednesday, June 08, 2005

Airline Economics II

Still Going Broke and Still Full


The airline sector is becoming more and more of a basket case every day. United, USAir, ATA and Hawaiian are in bankruptcy while American, Delta, and Northwest hover perilously close. And yet traffic levels have recovered fully from 9/11 and are on line to set records this summer. What gives? For starters, $55.00 fuel is not helping. From under $20 a barrel a year or so ago, these price increases have added millions of dollars of unplanned costs onto airlines.

So why don't the airlines just raise prices? They can't.

Airlines are suffering from a chronic overcapacity and inability to use mergers and acquisitions to rectify the problem. The announced merger of USAir and America West may solve some of this problem but the government largely exacerbates the problem by both propping up weak airlines and by making mergers very difficult.

And now the latest move by United and USAir to dump their pensions on the government may make the situation worse. Other airlines which have maintained their pension plans will now be at a competitive disadvantage as they have to make billions of dollars of payments to fund their pensions while United and USAir, both bankrupt, have dumped their obligations on the taxpayers.

So now the broke airlines without pension obligations and under court protection will bleed the remaining airlines. When will the sector get better? Anyone's guess but a few players will probably have to exit the scene before anything happens.

A friend of mine and a big jet. Posted by Hello

Friday, February 25, 2005

Too Old to Fly?

An ongoing debate within the airline industry is whether the mandatory age 60 retirement rule is necessary or fair. Scott McCartney addresses the issue in his latest column in the WSJ:


THE MIDDLE SEAT By SCOTT MCCARTNEY

How Old Is Too Old To Fly an Airliner?

Pressure Grows to Raise Age At Which Pilots Must Retire;Experience vs. Reaction


You want the captain on your next airline flight to have some gray hair -- but probably not white hair.

How old is too old to be flying hundreds of passengers has long been a difficult question. Right now, the U.S. kicks commercial airline pilots out of the cockpit before they hit their 60th birthday.

But that may change. As pensions erode, there is growing push to raise that to age 65, and there's an increased likelihood that travelers will start seeing older captains in the cockpit in the next few years. Some other nations are already moving in this direction, and in Congress, lawmakers have introduced legislation that would bump up the age. Even the Air Line Pilots Association, which in the past has successfully blocked attempts to raise the age, now says it is studying whether a change makes sense.

Bert Yetman, a retired pilot, would like to see the age rule abolished.

It's a thorny issue. Gray-haired pilots have the advantage of extensive and wide-ranging experience at the controls, enabling smart, well-informed decision-making -- which is just what you want if, say, a plane runs into trouble. Consider that, in 1989, United Airlines Capt. David Cronin flew a Boeing 747 back to Honolulu after a large section of the fuselage blew out, sucking nine passengers to their death. Two of four engines quit and wing flaps were damaged, but Capt. Cronin's flying skills saved 327 passengers. Then, within a month, he was deemed too old to fly.
That same year, Capt. Al Haynes guided a crippled United DC-10 to Sioux City, Iowa, using different thrust from right and left engines to steer the plane when hydraulic systems failed. It was a remarkable feat of airmanship, and 184 people survived Flight 232. Two years later, Capt. Haynes had to retire.

Yet older pilots may also run a greater risk of sudden incapacitation, slower reactions or declining mental faculties. While medical studies provide no clear-cut answer, many show that skills do deteriorate with aging.

The Federal Aviation Administration has adopted a stance that retirement at age 60 has proved to be a safe standard, and why change if you might risk safety? "To date, we have not seen any research that reassures us raising the retirement age would maintain safety or raise it," FAA spokeswoman Alison Duquette says.

But pressure is building for change. The current "Age 60 Rule" was drafted in 1959, and critics note that we're all living longer now. If 70 is the new 60, why not let pilots work to 65, the thinking goes.

The notion is gaining some support from lawmakers. "We shouldn't have an age cutoff for pilots. It should be based on medical requirements and on proficiency requirements," says U.S. Sen. James Inhofe (R., Okla.), a 70-year-old private pilot himself who has introduced one of two bills in Congress to raise the pilot retirement age to the Social Security minimum, currently age 65.
Many other countries and the European Union have already moved toward age 65 as a mandatory pilot retirement age, and the Department of Transportation has already talked of extending the careers of air-traffic controllers to age 61 from 58. The International Civil Aviation Organization, which sets international standards, has drafted a survey to send to its members shortly on allowing captains to fly up to age 65, with an eye toward making a change in late 2006, spokesman Denis Chagnon says. And ALPA's decision to study change has fanned the fire.

One big driver is money. Pensions at several airlines have been cut drastically, some even canceled, so many pilots would now like to be able to work longer. As it is, they have to retire five years before they could collect full Social Security.

ALPA, the labor union, has long had big influence with Congress, and its study will go a long way toward deciding whether Congress forces the FAA to change. The union fought the Age 60 rule vehemently between 1960 and 1980, but then switched its stance. As airline growth and pilot hiring soared with deregulation, a younger membership loved the rule: If senior captains are forced out, younger pilots move up more quickly into higher-paying jobs.

Now, ALPA is studying medical research and data from other countries where airline pilots have been flying past age 60, and will poll its members this spring, the first time it has done that since 1980. "Twenty-five years later, things have changed," ALPA spokesman John Mazur says.
Mr. Mazur says the first question to be resolved is whether older pilots would degrade safety. If the union is convinced that they wouldn't, then it becomes an economic question, and an internal struggle between older pilots who won't have the pension they thought they would have, and younger pilots -- many still on furlough from struggling airlines -- who want jobs.

At AMR Corp.'s American Airlines, the union representing its pilots, the Allied Pilots Association, says 83% of its members oppose an increase in the mandatory retirement age. Of course, pilots at American are covered by one of the industry's most generous retirement plans, preserved even through concessions when pilots opted for pay cuts over pension cuts. Not all airline unions agree: The union representing Southwest Airlines pilots has been pushing to add more years to their careers.

This is far from the first time change has been proposed, but it does represent the most serious challenge. Retirement-age pilots have sued to stay on the job and lost in court. And the FAA has studied the issue from time to time. A panel including the National Institutes of Health in 1981 recommended that the age limit be maintained, even though it found no medical significance to age 60 as a mandatory retirement age. In the last session of Congress, a similar measure from Sen. Inhofe failed by only a 44-52 margin.

It's important to note that many safeguards are built into the system, regardless of retirement age, and pilots in failing health are weeded out. Commercial airline pilots must undergo rigorous medical exams, including electrocardiogram tests annually after age 40.

In addition, all commercial jets have at least two pilots on board, and they are trained to handle situations such as one pilot passing out. In simulator training at Southwest, for example, one regular test of crews is that the captain landing a plane will simply go silent and sit still, and the first officer has to quickly recognize that and take control of the airplane.

Bert Yetman, a retired Southwest Airlines captain who leads a group called the Professional Pilots Federation, which is pushing for abolishing the Age 60 rule, notes that the FAA allows commercial pilots to fly with prosthetic legs, hearing aids, organ transplants and even one eye. The standard is whether they can pass medical and proficiency tests. He argues that the same standards could easily be applied to, say, a healthy 62-year-old.

"I'm very optimistic it's going to change," says Mr. Yetman. "There are a lot of things happening that have never happened before."

Mr. Yetman still flies Boeings -- but only empty ones. He ferries planes being delivered from the factory to airlines, or flies old, retired planes (including ex-Southwest Boeing 737s) to maintenance shops for refurbishment before they go to new owners

Friday, December 10, 2004

Airline Economics I - Going Broke Flying Full

Have you been on an airliner lately? I don't care which airline, but did you notice that it was pretty full? Even on the airlines that are in bankruptcy the airplanes seem to be full. With full airplanes, how can the industry be swimming in an ocean of red ink?

Now, have you noticed what airlines are charging to take you thousands of miles in relative safety and efficiency? (Yes, Virginia, flying is safer than driving...A lot safer). The airplanes are mostly new employing state of the art technology and the airports and terminals for the most part are new or being remodeled and improved.

The answer on a per mile basis is almost nothing. Flying is dirt cheap. For short haul flying, it can easily cost more to park for a few days than a ticket to a nearby city.

Why?

Competition and the vagaries of the airline business. You see, airlines have virtually the most perishable product possible. If Safeway doesn't sell a bunch of bananas today, they can sell them tomorrow and maybe the day after until they show brown spots. An airline seat is completely lost revenue as soon as the airplane pushes back from the gate. The marginal cost of producing that seat is near zero as the airplane, fuel, crew, and ground facilities are all already paid for whether that seat is filled or not. Therefore, any revenue at all which can be made from filling that seat is gravy on top of fixed costs. That means that if the airline can sell the seat for $20.00 just before pushback, that's $20.00 of revenue with almost no additional cost.

That, then is the reason that airlines have incentives to undercut each other to fill otherwise empty seats. Unfortunately, they tend to collectively bring too many seats to market and can't make any money while fighting each other in a race to the bottom. Hence low prices, full airplanes, and broke airlines

Why do they do this? That will be the subject of a future post.


Turbulence

I always get a kick out of passengers who when getting off the airplane will look at me earnestly and say something like: Thank you for getting us here safely. As if they weren't on the plane, I would have flown a little less safely. Newsflash: I fly safely to keep my own pink backside from hitting the terra firma, not necessarily that of someone paying $29 for a weekend jaunt to see their boyfriend who's probably going to dump them after this next weekend.

This last trip we really had some rough rides over the Sierra Nevada prompting quite a few such comments. Usually, if we hit some rough air, we just change altitude or slow down or both and it soon passes. On our last leg, we hit continuous moderate turbulence that just wasn't going away. Turbulence is classified as light, moderate, or severe. Actually, there are only two useful categories which are light and moderate. When it turns severe, we won't fly.

When the average passenger experiences moderate, they usually think they've experienced severe because the ride is fairly rough. Walking is impossible. Drinks jump out of cups and land in laps. And this evening was a little unusual in that there was no escape from the bumps. We were travelling over the mountains while a weather front was blowing into Northern California. Airplanes at all altitudes were complaining about some bad rides. Luckily for us, we had only 14 passengers on board so the liklihood of someone yakking and causing a sympathy yak was minimal.

Finally the rides smoothed out as we descended below 10000ft into Vegas.

Friday, November 19, 2004

Another Day Off

Here I am again wasting time on the computer on a day off. I should be going through my stack of bills and papers, or cleaning the boat, or fixing the fence but it is far easier to just click away from Quicken and check out the latest gossip online. The wife and I did get over to the gym this morning after dropping the kids off at school and helping to set up for their Thanksgiving feast. Once we got home I even ordered some flowers for my mother for turkeyday and a replacement canopy for a shade structure in the back yard. That should be more than enough productivity for anyone on a Friday. Tomorrow my son has a swim meet and then he wants me to take him dirt biking. The weather should cooperate. On Sunday morning I'm back out the door for a three-day trip with overnights in Connecticut and Indy. The Indy hotel is a converted train station with live railroad tracks still going through the building. There is a bar next door which plays live blues most nights. Sleeping of course may not always be possible, but the blues are great.

Tuesday, November 16, 2004

On the Road Again

Ontario California last night. It's a nice Hilton but I don't understand why a business hotel has neither the Wall Street Journal nor a high speed internet connecion. I'm connecting through my phone to bring you these missives from the front, gentle reader. The airplane has been empty. We flew down here with about 20 people on board. Let me tell you that with an empty cabin and just 10000lbs of fuel, that wingleted, 24k engine guppy climbed out like a homesick angel. We passed back by the field climbing past 10000ft and would've been higher except for a hold down.

Short overnight last night. Just 14 hours followed by five legs today. Reno tonight for another 14 hours and then five more legs to finish the trip tomorrow night. Loads should stay light until the holiday season begins. Then of course all chaos will break out. That is all for now.

Saturday, November 13, 2004

My job

There's absolutely no doubt about it. I've got the best job in the universe. My employer pays me obscene amounts of money to fly a 40 million dollar state of the art aircraft from city to city while being served peanuts and diet cokes by hot young flight attendants. OK strike that. Since 9/11 we don't really see them that much. They're not supposed to come up front unless absolutely necessary but nonetheless they're still young and hot...OK strike that too. OK, its still alot of money to fly a new airplane around the country. I'm actually lucky to be flying for one of the few solvent and growing airlines. And it's actually not luck that makes my airline profitable but you wouldn't know that talking to some people. But airline economics is a topic for another day.

Yesterday we flew into PDX with about 1/16 mile visibility. Our procedures are to hand fly the aircraft (that means without the autopilot) down to 50 feet above the runway on instruments only and to then make the decision to land or go around. Sounds exciting and it is but it is even more exciting with only a few hours of sleep. There is nothing that can't be done with a venti drip Starbucks under your belt. Worth every bit of $1.93 (with the employee discount).

Friday, November 05, 2004

You Can't Bring Work Home

One of the nicest things about this job is the inability to bring your work home. With the exception of the occasional home study exam, work remains at work. In fact, while I'm at work, it becomes my home. I'll spend two to three nights a week in a hotel in a different city. Some places are pretty nice and some not as nice. Pet peeves are cold showers, early morning vacuum cleaners in the hall or everyone's favorite: early morning construction. And don't even get me started on a broken TV remote! But by and large, the overnight hotels range from comfortable to occasionally luxurious as the hotel business waxes and wanes. The airline buys bulk rooms on a contract basis. When the hotel business is bad, the airline contract may make the hotel's payroll and we get better rooms; when business is booming, retail rates bring in more revenue and our hotels seem to migrate out of the downtown areas. But I digress.

Today I am home and wasting time which should be spent at the gym in front of the computer. Sandy, my lovely and talented wife (who is also an airline pilot) took our four children to school a little early for a bake sale and will meet me at the gym later but for now I am still in bathrobe with coffee listening to election fallout on NPR. I'll eventually get out the door to the gym and then perhaps take care of a few errands in the precious kid-free time between 8 and 3. My 7yr old daughter, Emily has demanded that I bring home all the magnetic key card from my overnight hotel stays. She wants to collect 100 of them to take to school for the 100th day of school. Her collection is coming right along. That's actually kind of a depressing thought.