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Nov 07 2017

Acrophobia

Simply put it’s fear of falling or heights and I have it in spades. Famously it’s the subject of Hitchcock’s Vertigo but I think that and other popular cultural depictions don’t capture the feeling as I experience it.

For one thing it’s not paralyzing. If you were hanging off a precipice or should we want to achieve a goal that required it I am quite capable of ascending dizzying heights voluntarily without prompting. Indeed I frequently do so to prove that to others (and myself). Do I find it a pleasant experience? Not at all. I am acutely aware at all times that gravity is a real thing and take care to position myself as best as circumstances permit so that the prospect of succumbing to it is unlikely. I don’t hang over the edges of tall buildings, cliffs, bridges, or cataracts just to snap a picture I can easily capture using a telephoto lens.

Is this an irrational fear? Yes, but… This is a real thing that happened to me. I went to a convention where the primary purpose was to adjourn to the rooftop restaurant as quickly as you decently could and engage in a bacchanalia of indulgence on the Club dime. I selected a seat next to the outer window because heights disturb me. Imagine my surprise when I leaned back in my chair, put a hand on the window to steady myself and…

It swung open behind me. The washer had neglected to refasten it after cleaning and none of the other staff had bothered to check it. I now sit facing out.

If you are familiar enough with my habits my disability is readily apparent though were the time requirement urgent I will drive across the Mackinaw Bridge rather than circle Lake Michigan as would be my preference and try to project my customary air of calm confidence and hope my fixed attention and firm grip on the wheel passed unnoticed. As a passenger my practice is to close my eyes and fall asleep (or pretend to) long before we approach.

All this is to add weight to the statement that I hate flying, not because of my acrophobia, but of the inconvenience and experience. The seating is worse than a bus and the noise is like sitting next to a speaker at a really long and boring rock concert by a band you don’t care for.

Flying the Unfriendly Skies
By David Dayen, Alternet
November 6, 2017

When Dr. David Dao was forcibly removed from United Airlines Flight 3411 on April 9, with cell phone cameras documenting the display, the uproar was immediate. People were infuriated by United’s resort to brutality, by the use of law enforcement to solve an overbooking problem, by the bloodied face of the doctor, and by United CEO Oscar Munoz’s ham-handed apology for “re-accommodating” customers.

But the real outrage should be directed at the fact that abuse of passengers is the logical endpoint of a 40-year trend since the government liberated the airline industry. Until 1978, air travel was heavily regulated. In that year, some of the nation’s most celebrated liberals joined conservatives in trusting free markets. A brief rush of competition in the 1980s gave way to consolidation and monopoly power, at the expense of workers and passengers alike. Today, four carriers control 80 percent of all U.S. routes.

The industry’s recipe for record profitability has been to ratchet up misery on travelers bit by bit. You cannot opt out of the suffering; you cannot vote with your wallet to find another flight—if you want to get from Chicago to Louisville, you have to sit back (not very far back) and take it. And if the airlines want to violently pull you off the plane? What are you going to do, drive?

Today, democracy ends at the gate entrance. The government relinquished control of the airline industry to a handful of CEOs—and more important, to a handful of shareholders on Wall Street. We merely converted regulation by and for the public into regulation by plutocrats, who now rule the friendly skies in their own interest. The airline industry’s spiral epitomizes the shifts in our economy since the Reagan era—deregulation, financialization, wage stagnation, and abuse of market power. “It’s the perfect example, too perfect in some ways,” says Northeastern University economics professor John Kwoka. “And since we all spend our lives in the air, it hits home.”

Access to air travel is as important to the economic vitality of U.S. cities today as rail access was in the 19th century. If manufacturers or farmers could use railroads to get goods to market, they could thrive. Rail barons used this inherent power to fix prices and gouge customers dependent on their services. Eventually government stepped in to regulate railroads as public utilities, ensuring broad access throughout the country while allowing a reasonable profit for the private companies that managed them.

The United States adapted the public utility model to air travel in 1938, putting control of the fledgling industry under the auspices of the new Civil Aeronautics Board (CAB). Officials recognized that, similar to railroads, a reliable aviation network was a potent economic development tool. You can’t be a major-league city and attract business investment without an airport with national reach. The Roosevelt administration believed air travel, like rails, was a “public convenience and necessity,” instead of hoping the free market would provide it.

CAB guaranteed airlines a 12 percent profit on a flight that was 55 percent full. If fuel or other fixed costs rose, fares could go up; if they fell, prices had to drop. In addition, airlines had to serve the entire nation, with more popular routes effectively subsidizing the flights to the outskirts. CAB’s control was rather strict; airlines had to get permission to alter routes and fares, or even change uniform colors. But the idea was to maintain a standard of accessibility and reasonable service for every American.

The drive to kill CAB came from a surprising source: liberals. Ralph Nader, for example, attacked the board for being captured by an industry it protected from competition. But the real ringleader was Ted Kennedy. Future Supreme Court Justice Stephen Breyer, a staff aide who ran Kennedy’s Senate Judiciary subcommittee on administrative practices and procedures, convinced his boss that taking on CAB would make him a hero to the consumer, amid spiking inflation and unemployment. Labor unions objected, but market-oriented liberal economists longed to ditch central planners like CAB.

Alfred Kahn, then a professor at Cornell, was a leading voice, promising that deregulation, then a new concept, would make airlines more efficient, and benefit consumers, employees, and stockholders. Airline routes, Kahn said, were “contestable,” no matter the huge startup costs. Dismantling CAB would force even a monopoly carrier to lower prices because of the mere threat of competition.

As Paul Stephen Dempsey wrote in a 1990 chronicle of deregulation for the Economic Policy Institute called “Flying Blind,” economists believed entry and pricing restrictions led to “excessive service” for passengers who were paying for more frills than they really wanted, while airlines were denied “adequate profits.” In other words, the fliers were too comfortable and the corporations too poor. Making flying less relaxing to the passenger and more profitable to the corporation was the real premise of deregulation, regardless of hype about open competition and lower prices.

After deregulation, the system of delivering air travel also changed, from nonstop point-to-point service to a hub-and-spoke setup, with more connections from airports dominated by a single carrier. “It’s an efficient way to market their product because it allowed a larger array of destinations,” said Dempsey. “But it’s an inefficient way to provide the product.” Centralizing activity in hubs maximized pricing power and added airport congestion. The environment suffered from extra takeoffs and landings and out-of-the-way detours to hub cities. Startup airlines gradually found open slots at hub airports hard to come by. Even the hub cities did not benefit greatly from becoming hubs; passengers just changed planes at the airport rather than experiencing the city.

As the old CAB guarantee of a national network ended, airlines dropped unprofitable routes and smaller cities became virtually frozen out of air service. A hundred cities fell off the commercial aviation map in just the first two years of deregulation. By the 1980s, the only way to fly into state capitals like Dover, Delaware, or Salem, Oregon, was by private plane. Inaccessibility made these outposts less attractive to business, with jarring effects to local economies.

Before long, the burst of competition led to a washout. Just in the 1980s, 200 airlines went bankrupt, including majors like Eastern and Braniff. Competition turned destructive, as price wars quickly crippled businesses with large fixed costs like airplanes. CAB had denied additional city routes; critics liked to bring up the horror story of Continental waiting eight years to get approval to fly from Denver to San Diego. But CAB based its determinations on customer demand. Without bureaucrats holding the reins, competitors rushed into unprofitable routes and imploded.

Bankruptcies led inexorably to concentration. After CAB dissolved, the Department of Transportation took jurisdiction for airline mergers, and they never denied one, finally losing the authority to the Department of Justice in 1990. Between 1979 and 1988, 51 airlines merged. Even Alfred Kahn, architect of deregulation, admitted in 1990 that the industry was a “tight oligopoly.”

Today we’re down to three legacy carriers: United, American, and Delta. Southwest maintains its reputation as a “low-cost” disruptor but has begun to control certain airports as well. “When they dominate, they don’t leave money on the table either,” says economics professor John Kwoka. Four out of every five passengers in America flies with one of these four companies. And in 93 of the top 100 airports, either one or two airlines control a majority of all seats. There is a tacit understanding to stay out of each other’s turf, to protect everyone’s pricing power; competing airlines only schedule a handful of flights into a competitor’s hub. “You don’t find Delta trying to get into Chicago, you don’t find United getting into Minneapolis or Atlanta,” says Morris. “You have these little fiefdoms.”

This dominance flowed from two critical bend points, each coinciding with economic catastrophe. First there was September 11, which fundamentally transformed air travel and the companies that provide it. The financial crisis of 2008, which hit just as airlines had clawed back to profitability, had a similar crushing effect. Every major airline declared bankruptcy in the 2000s, primarily employing it to shed “legacy costs,” or what workers call wages and benefits.

About one-fifth of full-time airline jobs were eliminated between 2001 and 2005. Mainline jobs evaporated as airlines contracted with the equivalent of low-cost temps, regional jet companies who wear the same colors as United or American but actually work for a different carrier. Those left at the majors suffered across-the-board wage cuts of 30 percent to 40 percent, according to Sara Nelson, president of the Association of Flight Attendants, the largest flight attendant union. “The pay is not for a middle-class income anymore,” she says. Crews made up for it by flying more; a cap on time in the air was lifted to increase workloads. Starting salaries for pilots, particularly at the regional airlines, can be as low as $20,000 a year. Reduced options due to industry consolidation left most employees with no choice.

A lesser-known consequence of worker restructuring was the outsourcing of repair work overseas, to low-cost operations in El Salvador, Mexico, and China. While U.S. maintenance jobs fell nearly one-third since 2000, planes now routinely get serviced abroad, away from Federal Aviation Administration inspectors and in ways that local mechanics have criticized as slipshod. Most of the overseas repair workers don’t speak English even though the technical manuals are written in English.

The main targets for airline bankruptcies were pensions. US Airways terminated its pilot pensions and shifted to 401(k) plans in 2003; Delta did the same in 2006. United used a grueling, 30-month bankruptcy to terminate pension obligations for four plans affecting 134,000 workers in 2005. Attorney James Sprayregen, who handled the bankruptcy for United, admitted to PBS’s Frontline that the company deliberately dragged out the process, adding concessions gradually to prevent labor unrest.

Existing pensions shifted to the Pension Benefit Guaranty Corporation, where payouts dropped significantly. An inspector general’s report in 2011 found that the PBGC cut United pensions too deeply, and US Airways pilots fought for higher payouts for over a decade. “It really affects workers close to retirement, five to ten years away, who are not able to retire,” says Sara Nelson.

According to Paul Stephen Dempsey, Ted Kennedy never recognized at the time how deregulation might impact labor, especially as the industry bust shook out. “This never came out,” Dempsey said, “but Kennedy subsequently said to his staff, you never told me this would be the result.”

Though prices increased after mergers began, the industry claims that fares have fallen for the past three years. This statistic is incredibly misleading, because it doesn’t count ancillary fees, a growing profit center. In essence, practically everything you used to get for free on a plane now costs you: a hot meal, a comfortable seat, an in-flight movie, checked baggage, the flexibility to change flights. Airlines added fuel surcharges and kept them on even after oil prices dropped; in 2011 they raised base fares when FAA authorization lapsed and federal taxes could not be collected temporarily, pocketing the difference without the consumer realizing it. Fees and other charges represented a little over one-tenth of all revenue in 1995; today the figure is over one-quarter. Last year, U.S. airlines made $20.2 billion in ancillary revenue, according to research firm IdeaWorks; that’s more than two times industry profits.

The ancillary fees play off other innovations to maximize the revenue potential of travelers’ behavioral responses. For instance, checked-bag fees give passengers incentives to bring their roller-bags on board. That makes getting on first to find space in the overhead bin a priority. So airlines started charging for pre-boarding. Plus, moving baggage onto the plane allowed airlines to cut costs on baggage handlers. Eliminating meals in the main cabin enabled airlines to reduce the size of the galley, opening more space for seats. The personal entertainment device on the seat-back seems like a new amenity, until you realize it allows airlines to isolate and charge for viewing in ways they couldn’t with a communal screen.

Airlines have also shrunk what is called “seat pitch,” the measurement from one seat to the one behind it. Every inch removed between rows equals another row of seats that can be added to the back of the plane, and at least six more paying customers. The cramped quarters lead many to cry uncle and pay for “preferred” seating, which mostly have the same seat pitch that was standard in coach 10 or 20 years ago.

Fee structures like this can only work if there’s no competition on quality to lure passengers away from being nickeled and dimed. Virtually all airlines have added the same charges; if anything, the low-cost carriers like Spirit Airlines are worse, charging for seat assignments, online booking, a soda, and any carry-on larger than a purse. While most carriers derive about 26 percent of their revenue from ancillary fees, for Spirit it’s a whopping 46 percent. The ticket fares simply bear no resemblance to how much you’ll pay.

The consequences for passengers can be grave. Disobeying a flight crew constitutes a federal felony under the Patriot Act. Paul Hudson of Flyers Rights, a consumer organization, estimates between 400 and 500 prosecutions on that statute since 2002, none of them terrorism-related. “This has essentially been a license to crack the whip on passengers,” Hudson says. And there’s a severe power imbalance at work, he adds. “People don’t realize, as a practical matter passengers are exempted from all legal remedies except for injury or death.”

Hudson explains that deregulation prevented states from instituting rules based on “service,” which industry attorneys have interpreted to mean anything the airline does in terms of operations. The Department of Transportation takes complaints—they have jumped 70 percent since the Dr. Dao incident in April—but mostly they’re filed away for statistical purposes. “If an airline violates a rule they can be fined, however the individuals involved, they don’t get a thing,” says Hudson. And typically the fines are reduced or even waived if the airline cooperates and promises to improve. For dragging Dr. Dao off Flight 3411, United won’t even face a fine.

But blaming passengers or crewmembers for flare-ups in the cabin, as an anonymous Delta employee pointed out, misses the point. They are both exploited by unforgiving corporate behemoths. The raised tension inside the plane draws attention away from the elephant in the aisle. Deregulation was supposed to increase competition. Mainly, it increased concentration and market power. That’s why airlines keep getting away with the relentless degradation of service.

In sum, Airline deregulation has been disastrous for workers, frustrating for travelers, and devastating for communities. When hubs pulled up stakes in cities like Cincinnati, Memphis, and St. Louis, their link to the global economy withered, as business travel became difficult and exceedingly expensive. “It’s like Walmart came into town and then Walmart left town,” says David Morris. As Washington Monthly detailed in 2012, major businesses and convention-goers have abandoned heartland cities because of the inability to easily travel across the country.

Delta has touted how it takes advantage of the paucity of regional air service by raising fares and profit margins. Leaving communities behind like this would have been impossible under CAB. This aerial divide fosters regional inequality, with societal gains going disproportionately to a handful of cities lucky enough to have a functioning airport and reasonable prices. “It’s also what helped put Donald Trump in the White House,” says Crandall, reasoning that the large clusters of regions not benefiting from economic growth rebelled against the regime in Washington that presided over their plight.

So what can be done today? Consumer advocates like Flyers Rights have begun to fight back, against large odds. In July, the group scored a major victory in federal court, forcing the FAA to issue rules it requested in 2015 mandating minimum seat sizes and legroom on planes. “We did it on safety and health grounds, because they claimed no jurisdiction for comfort,” Paul Hudson of Flyers Rights says. “We said confining on long-haul flights increases chances of blood clots.” In advance of the ruling, American tossed out a plan to drop seat pitch to 29 inches on its 737 planes, perhaps running into its customers’ breaking point.

The last serious legislative win for consumers, a regulation preventing airlines from stranding passengers on the tarmac for more than three hours, took eleven years to complete.

But importantly, advocates and even ordinary people are thinking and speaking about the airlines in a new way. People understood the violent ejection of Dr. Dao as a byproduct of an oligopoly that doesn’t have to care about consumer comfort. People no longer look at deregulation with reverence; they’re skeptical of its benefits and see clearly its negative consequences. People no longer want to accept the mental and physical toll just to get from point A to point B. Even the Democratic Party’s “Better Deal” campaign specifically goes after the airline industry as too concentrated and too powerful.

“The passenger is basically expected to sit down and shut up,” says Paul Stephen Dempsey. “If you don’t like it, what are you going to do about it?”

Changing the mindset is the first step to changing the policy. If we agree that regulation by CEOs and investors doesn’t serve Americans, we can return to rule by the people. We can restore federal authority to impose quality-of-service standards. We can mandate universal access, giving every citizen, regardless of his or her location, the opportunity of air travel. That includes cross-subsidizing less-profitable routes and reinstituting some form of reasonable price regulation. We can talk about building new airports—there hasn’t been a single major one built in America since 1995, in Denver, which bulldozed their old one the same day—or at least opening up slots in existing terminals through forced divestment. We could mandate reasonable service throughout the country as an economic engine for smaller cities and regions. We could use the antitrust powers for what they were meant for, to eliminate anti-competitive behavior. If that means breaking up the big airlines, so be it.

More broadly, we need to see the airline industry as a microcosm of the way the U.S. economy now works: for the benefit of small groups of shareholders and executives rather than the mass public. The freedom of movement is too important to leave its governance to such a tiny sliver of the population. The problem with airlines reflects the problem with democracy in America. And we don’t have to stand for it, or sit with our seat belt securely fastened.

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