Editor's Desk: Playing the slot game

Business Jet Traveler » October 2007
Monday, October 1, 2007 - 5:00am

You have to feel sorry for the airlines. The industry is well past its Golden Years, whenever they were. Some say they were in the 1930s, others in the '50s or '60s. Certainly, these years, which always look better with hindsight, were before the days of deregulation, which began in 1978.



You may disagree with that, but what no one can deny is that the airline flying experience has deteriorated between then and now...except for the price, of course. Today, with an advance ticket, you can fly round trip on Delta from New York to Los Angeles for $178 ($223 with taxes). That's the equivalent of $56 in 1978. Wow.

Price, the airlines say time and again, is the main factor consumers consider when selecting a flight. Not all consumers all the time, but certainly most consumers most of the time. So it's no surprise that airline travel has become a commodity. Unfortunately for the airlines, it's a commodity in a not-so-pristine free market.



The laws of supply and demand rule free markets. These laws have a huge effect on the airline industry, too, especially the deregulated airline industry. But several factors make it a less-than-pure free market, and therein lies the rub. The greatest of these factors, in my opinion, is the capacity of our nation's airports, specifically runways, ramps, gates and parking areas.



The bad news is that none of these can be expanded quickly and inexpensively. Yet demand for airline travel continues to increase, primarily because of the low fares-the very reason the demand curve says it should.



Even if you fly only on private or corporate aircraft, you've probably been affected by this year's airline-flight-delay summer from hell. This was not the fault of just the airlines, which schedule too many flights in the same popular time periods, and the airports, which allow them to do this. (If you have a dozen flights scheduled to take off at 8 a.m., how many will be on time?) Bad weather was a big factor, too. But contrary to what Mark Twain said about everybody talking about the weather and nobody doing anything about it, air traffic control does do something about it-it keeps airplanes on the ground at their departure airports if there's a high probability that they will be delayed on arrival at their destinations. This makes much more sense then letting them blast off and end up in an hour-long holding pattern or diverted to another airport. The downside is that the ramps, gates, parking areas and passenger lounges become more and more crowded the longer the weather delays last.



So what can be done and how will this affect business aviation?



I'm not saying we should go back to the good old days of pre-1978 regulation, or that deregulation was completely bad. To be sure, it opened up the industry beyond the entrenched and powerful airlines of that time-what we now call legacy airlines-and this spurred growth, sales of aircraft and technological development. There is no doubt that aircraft are safer, quieter, and more efficient, reliable and eco-friendly today than they were 40 years ago.



What is needed, however, is for the airports to exercise greater control over airline flight scheduling by use of slot allocation. Schedules must have more wiggle room for delays caused by weather and other reasons. Airports also need to increase parking space on ramps for delayed aircraft so ones that aren't delayed can get to the gates. And they should invest in more buses and moveable passenger airstairs to load and deplane passengers when their airplane can't get to a gate.



In addition to making the most effective use of airport capacity, slot control should also have the goal of ensuring fair competition among the airlines and providing airport access to nonairline operations, namely business aviation.



Could this result in business aviation losing some of the access it now enjoys at the largest airline-hub airports? Probably. But I believe that most of the time business jet travelers will be able to find good access to their final destinations by going to a nonairline airport in the area. That is, after all, one of the beauties of private air travel.



On the Home Stretch with User Fees

After our Senators and Representatives returned to work following their August recess, they had but four weeks to pass legislation that defines the taxes  and fees that fund the FAA for the next 10 years. Whether they can make the September 30 deadline or not is hard to predict as we go to press, but if they don't, they'll likely pass an extension  that continues funding. It seems probable that the fuel tax on business aviation will increase eventually, which appears reasonable to most observers, but user fees are still being debated. So it's not too late to call your Senators and Representatives and tell them how you feel. Go to

 

http://web.nbaa.org/public/govt/action/ for more information.

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“"I've got a list of corporations that have gotten out of their airplanes [because of criticism from politicians]. It is the stupidest thing I've ever seen. When you look at the time and cost savings; it does not make sense not to fly [privately]. You can't let public perception interfere with your business decision to fly. It either is a good business decision or it isn't."”

-business aviation entrepreneur Nick Popovich