August 10, 2017

Leela Yellesetty explains why the abysmal conditions endured by airline passengers and workers alike have everything to do with the bosses' bottom line.

DURING HIS brief but memorable tenure as White House communications director, Anthony "The Mooch" Scaramucci attempted to explain Trump's vision for health care reform:

What the president is trying to do is make the health care system freer. So why not disrupt and decentralize the system, make it more price competitive, increase competition for the insurance companies and trust the process of the free market, like in telecom, like in airlines?

Really? Yes, the health care system is awful, but did the Mooch really think a good selling point for reform would be to make it more like Comcast, the most hated company in America? Or United Airlines, which wasn't able to beat out Comcast even by dragging a bloodied man off a plane, so they decided to kill a bunny rabbit for good measure?

"No one wants health care to be like the airlines!" talk-show host Seth Meyers quipped in response, "'How was the hospital?' 'Not great. My surgery was three hours late, my bed was double-booked so they dragged me out of the OR, and then they sent my appendix to Albuquerque!'"

Airlines are cramming more and more passengers onto each flight

What's to blame for the awful treatment of passengers and airline workers alike? The problem isn't bad business decisions, but the drive for sky-high profits.

FOR THOSE of us who hate the elaborate torture that is U.S. air travel--that is, all of us who can't afford first class--we have some tentative good news. A recent ruling by the U.S. Court of Appeals directed the Federal Aviation Administration (FAA) to address "the Case of the Incredible Shrinking Airline Seat," as one judge put it.

The ruling came in response to a petition filed by the consumer advocacy group Flyers Rights, which pointed out that the distance between seats, known as the "pitch," has decreased from an average of 35 inches to 31, with some as low as 28, while seat widths have shrunk by an inch and half in the past decade--at the same time as the average passenger has grown larger.

The group argued that this posed a health and safety hazard by making it difficult to evacuate in an emergency and increasing the risk of passengers developing deep vein thrombosis (DVT), a potentially fatal condition caused by a blot clot as a result of prolonged sitting in cramped space.

The FAA rejected the petition, claiming--with "research" to back it up--that the issue of seat size was one of comfort and not safety. While the court agreed that the danger of DVT was not well established, on the safety claims, it blasted the FAA for a "vaporous record" of "off-point studies and undisclosed tests using unknown parameters."

Indeed, the FAA refused to disclose most of the tests used to make its decision, claiming they were proprietary.

While the ruling simply directs the FAA to revisit the petition and doesn't directly compel the agency to set minimum standards for seat size, it is certainly a positive development in the face of the ongoing airline assault on our safety and comfort, not to mention dignity.

Apparently not everyone is cheering this development, though.

In article sneeringly titled "Let Them Shrink: FAA Should Not Regulate Airline Seat Space," Forbes' Omri Ben-Shahar argued that the airlines are actually giving consumers exactly what they asked for. That is, if we want cheaper flights, we should be prepared to suffer for them.

If you want better seats, just pay more--indeed, one reason our seats are shrinking is to make room for "premium" options for the lucky few.

William McGhee, author of the airline industry expose Attention All Passengers, summed up the attitude of Forbes writers and airline executives this way:

Things are just fine in business class and first class. I don't think that's coincidental. It reflects the larger issues we face as a society right now, the 99 Percent vs. the 1 Percent. I've talked to execs about deteriorating conditions in the back, and their response is basically, 'You should pay for and sit up front,' which is a bit of a 'Let them eat cake' response.

AS EASY as it can be to dismiss an argument inspired by Marie Antoinette, it's worth probing some of the claims that Ben-Shahar makes more closely.

For one thing, it's true that airline travel is more affordable and accessible to the average person that it was in the glory days of free food and adequate legroom.

Back then, air travel was largely a preserve of the wealthy. For free-market enthusiasts like Ben-Shahar and the Mooch, therefore, the deregulation of the airline industry in 1978 was a victory for consumers, increasing competition and thereby lowering fares and improving service.

This sounds good, but it doesn't remotely depict what has actually happened in the decades since deregulation. Instead, what's played out is a sordid tale of rampant inefficiencies, corruption, bankruptcies, mergers and deteriorating conditions for both passengers and workers.

Right after deregulation, there were more than 400 certified carriers and 10 major airlines. Today, just four airlines control 80 percent of all domestic flights. Rather than encourage competition, deregulation removed antitrust provisions, allowing airlines to collude in raising fares while reducing service.

The 2013 merger of American and US Airways to create the world's largest airline was accomplished by an army of corporate lobbyists, lawyers and economists, while executives and their Wall Street backers salivated at the profits to be made from the deal:

Indeed, government investigators had uncovered documents showing airline executives crowing about how mergers allow them to charge travelers more. "Three successful fare increases--[we were] able to pass along to customers because of consolidation," wrote Scott Kirby, who became the president of the new American Airlines, in a 2010 internal company presentation... A 2014 Goldman Sachs analysis about "dreams of oligopoly" used the American-US Airways merger as an example. Industry consolidation leads to "lower competitive intensity" and greater "pricing power with customers due to reduced choice," the analysis said.

Another useful tool in the industry playbook is bankruptcy. All of the four remaining airlines filed for bankruptcy in the past decade--and they are now the four most profitable airlines in the world.

In fact, they were doing just fine before, but bankruptcy allowed them to slough off inconvenient costs of providing decent pay and benefits to their employees. As United Auto Workers activist Gregg Shotwell commented on American's 2011 bankruptcy:

Capitalism isn't above the law in the United States--it is the law. Peace and solidarity activists are hounded, harassed and arrested, but the forcible transfer of wealth from the working class to the investing class is protected concerted activity. American Airlines' debt doesn't outweigh its cash and assets. In fact, American is financing its own bankruptcy. That's not distress, it's brass-knuckles union busting. The business press makes no bones about American Airlines' plan to profit off the broken backs of labor contracts. In fact, they crow about it. American Airlines ordered 460 new planes from Boeing and Airbus less than five months ago, at a cost of $38 billion. Those contracts will be honored even as American plans to dump pensions underfunded by about $10 billion for approximately 130,000 workers and retirees.

THIS UNION busting comes with real consequences for passenger safety as well. Abysmal pay and working conditions for pilots in budget regional carriers has resulted in an increase in crashes, to give just one example.

While cutting corners on workers' rights has helped boost airline profits and executive compensation, the impact on fares for passengers is less than meets the eye. As Carl Finamore explained in a 2010 article republished at SocialistWorker.org:

Champions of the free market boast about upwards of a 20 percent reduction in fares since 1978 when airlines were freed to set their own prices without the nuisance of government regulators. But this is very misleading. There are several factors contributing to the decline in prices. For example, booking online has almost entirely eliminated the large commissions of travel agents. Experts state these fees normally accounted for a full 10 percent of ticket prices. And while it is true that fares to large cities has benefited from increased competition, where it exists, smaller communities have, conversely, seen substantial fare increases as their airports have experienced reduced or lost service. Millions of travelers are also forced to purchase tickets to major hub airports they otherwise would have bypassed during the period of regulation where direct flights to and from smaller markets were offered.

The last major factor making the price of flights misleading is the explosion of fees for everything from luggage to meals to wifi to the ability to board early--coming soon: the surcharge if you would like to not be beaten and dragged off the plane. This has been the single largest source of profits for airlines in the last decade, with Delta alone pulling in $5.7 billion from such fees in 2013 alone.

As Tim Wu pointed out in the New Yorker, this pricing model sets up a perverse incentive:

Here's the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as "calculated misery." Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that's where the suffering begins.

IS THERE any way out of calculated misery?

The current trajectory we're on doesn't seem promising. While the past few years saw record profits for airlines in part due to lower fuel costs, as costs begin to rise, we should expect new rounds of crisis, bankruptcies and mergers, all of which will, of course, be apaid for by further attacks on worker and passenger dignity.

Ultimately, we would be wise to heed the words of former American Airlines CEO Bob Crandall that "market forces alone cannot and will not produce a satisfactory airline industry, which clearly needs some help to solve its pricing, cost and operating problems."

Nationalizing and making the airlines a public utility would be a rational response to the anarchic yet calculated misery of deregulation. In a sane system, we would also look for ways to reduce the amount of air travel, given its carbon footprint, but this would require reorganizing corporate practice and providing affordable, sustainable travel alternatives, such as high-speed rail, as well as providing workers more vacation days to make slower forms of travel feasible.

Of course, we should expect none of these solutions to be forthcoming from the airline executives--least of all under a certain president who, within weeks of taking office, gleefully told a group of them: "You're going to be so happy with Trump."

Instead our salvation from the unfriendly skies lies, as an anonymous Delta employee put it recently, in passengers and airline workers joining forces in support of each other: