Monthly Archives: May 2017

There they sit, on the steaming hot concrete apron: jets, dozens of themsleek, shiny birds, screeching and spewing effluents, glistening and glimmering in the hot wavery air. Waiting.

Waiting to leave, to lift off, to soar. Once in the sky, these magnificent machines sweep along at 600 miles an houronce in the sky. Today, however, they wait, one behind the other, perched massively on silver struts atop puny Goodyear claws, looking like flightless flamingos, impressive but impotent, a mockery of themselves.

Aboard one place, a bureaucrat, like a heavy from Ayn Rand's Atlas Shrugged, corners a stewardess and demands that the pilot call the control tower, and get this crate in the air. Back flashes an answer from control: The dignitary will kindly wait, just like everyone else. Tough luck for the bureaucrat. A fitting reproach, though, really. For, if this bureaucrat is like the rest, it is his ideas, the bromides he dares to call convictions, that are responsible for the disaster he so hotly denounces. It is his legalized coercion, his forced cartels, his restrictions and his subsidies, which are the cause of the mess.

These birds, you see, these strong, innocent, friendly birds, are not free. They have been tied down and strung up, like metal Gullivers on the island of Lilliput, by two hoards of neurotic pygmies using millions of tiny strands of red tape: the Federal Aviation Administration (FAA) and the Civil Aeronautics Board (CAB). And that, simply that, is the essence of the crisis in the air. ED.

A private business whose sales volume had increased 1520% annually for seven years (and showed many signs of continuing to do so) would probably view its future with eager anticipation. In the government-controlled, privately "owned" cartel known as commercial aviation, however, the expected growth in air travel is viewed, in part, in horror. For as the volume of air traffic rises, a monumental crisis appears imminent, a crisis that threatens the complete paralysis of air transportation. What is the source of this seeming paradox? Flow can it be that the same industry that will be flying, fueling, and servicing the huge 747 next year, is unable to solve seemingly simple problems of supply and demand? The answer is not at all a difficult one to arrive at, provided one views the problem in its full scope, without recourse to the self-imposed blind spots that have plagued mass media "analysis" of the subject.

"Commercial aviation" consists of three distinct parts: the airports, the airways linking airports, and the airlines.

Although there are 10,000 airports in the U. S., many of them privately owned, all 525 of those large enough to handle scheduled airline service are owned by city governments (except Dulles and Washington National which belong to the federal government). These large airports are financed from taxes levied on local citizens, taxes they must pay whether or not they fly. Limited federal aid tax money is available for building runways at these airports, thus forcing many citizens quite remote from airports to pay for them. During the last ten years the pace of airport expansion has lagged far behind the growth in air traffic, because 1) local governments have little political incentive (or expertise) to accurately forecast passenger demand, 2) Congress has let the annual appropriation for airport aid gradually decrease, despite constantly increasing requests for such aid, and 3) local taxpayers are becoming increasingly hostile to higher taxes, especially for things which do not directly benefit them. Hourly capacity restrictions have already been imposed by the federal government at major east coast airports, because of the increasing congestion at terminals and on runways. When the 365-passenger 747 and the 300-passenger airbuses go into service in the next few years, only a handful of airports will have terminal facilities or access roads adequate for such large concentrations of people.

The airways consist of a number of paths in the sky, defined by ground- based radio navigation stations (navaids). The Federal Aviation Administration (FAA) owns and operates the navaids and polices the airways. Anywhere above 3500 feet and in the vicinity of airports, all aircraft must fly under FAA control. Although modern electronics and computer technology make nearly- automatic air traffic control technologically feasible, the FAA still relies on the early 1950's method of using navaids only as references, with all control and decision-making in the hands of a (human) FAA air traffic controller. Because of limited funding by Congress, there aren't enough controllers, their salaries are low, and their training is poor. Combined with the high volume of air traffic, these conditions make today's controller extremely overworked, in many cases literally a nervous wreck. Another consequence and cause, perhaps, of the controller shortage is the fact that these men are "daily forced to compromise with safety procedures"1 in order to handle their workload. The controllers' slowdowns of 1968 and 1969, and their disastrous effects on flight schedules, illustrate how close to collapse the existing ATC system is.

The FAA's operations are financed out of general federal tax receipts (the tax on airline tickets goes into general revenue, while the tax on aviation gasoline goes into the highway trust fund!) Thus, as long as there aren't many crashes, Congress is content to appropriate meager sums for the FAA.2 The taxpayers, 60% of whom have never flown at all, justifiably feel little desire to be taxed even further to provide airways for the mere 15% who fly commercial airlines.

Finally, the airlines themselves present an interesting picture- Though nominally private companies, the airlines in fact are controlled by the Civil Aeronautics Board (CAB) in every essential aspect of their business. The routes between cities are divided up among the airlines as a huge cartel, originated and enforced by the CAB, thus making free entry into the market illegal. Likewise, it is nearly impossible for an airline to leave a particular market (by dropping a city from its schedule)the "public necessity and convenience" must be served, apparently regardless of losses. The prices charged customers for a particular route are fixed by CAB, in order to prevent "destructive" price competition. Price increases are permitted to the airlines only as a group, and price decreases, while allowed on an individual basis, must still be run through the mill of CAB. If companies in the steel industry tried to set up such an arrangement, they would be prosecuted by the Antitrust Division of the Justice Department. Indeed, the contradiction between the CAB's philosophy and the antitrust laws was illustrated last summer, when the CAB had to grant the airlines temporary immunity from antitrust action so that they could meet together to discuss coordinating their schedules, so as to relieve rush-hour airport congestion.

As if this were not enough, 13 local service airlines, which were formed after World War II with surplus aircraft and "temporary" subsidies, continue to receive on the order of $50 million per year in subsidy payments, out of general tax revenues. Thus, taxpayers are forced to pay huge direct subsidies, in addition to the countless indirect subsidies they provide in the form of "free airways, weather reports, landing aids, and mail contracts.

The net result of these government activities is that at least three distinct groups of people are being victimized. First, the vast majority of taxpayers who do not use the airlines are being unjustly taxed so that those who do fly can have air travel at less than its true cost. Second, the most competent, aggressive airlines owners (and potential airline owners) are being prevented from engaging in competition with the less competent companies, with the result that neither the more competent companies nor their stockholders can benefit as fully as they could and should. Third, the people who do fly are getting less efficient and less safe air service than, in the absence of government interference, they might; less efficient because of the lack of competition, and less safe because of the antiquated, under-funded, congested airport and airways system.

The question which should be obvious by now is; How, in "capitalist" America did such a horrendous tangle of vested interests and government control every come to pass? The standard "conservative" mythology holds that all of America's economic troubles began with FDR's New Deal. The sad fact of the matter is that government interference with and subsidy to American Aviation has a long "nonpartisan" history.

Throughout the history of American aviation the general rule has been that each expansion of government control was preceded by requests for such regulation from one or another group of people involved in aviation. At each step of the way, of course, the proponents did not foresee or advocate any further government involvementthey merely wished to blindly promote their own short-range special interest.

Federal involvement began in 1915 when when President Wilson selected a number number of aviation enthusiasts to form the National Advisory Committee on Aeronautics (NACA) to "studythe problems of flight, with a view of their practical solution." The impetus for setting up NACA was World War I, but as with many government agencies, NACA emerged in 1919 as a permanent entity, and became a vigorous advocate of government control of aviation.

Former wartime aircraft producer Howard Coffin strongly supported NACA's position. During the war Coffin had been picked to head the government's Aircraft Production Board, which passed out over $1 billion in aircraft contracts to his own company and those of his fellow auto producers.3 Coffin and his friends ignored the advice of many aircraft designers and mass-produced the Liberty aircraft engine along automotive lines, which made it a poor aircraft powerplant. They also produced 10,500 DH-4 aircraft, only a few of which ever reached Europe. The remaining planes were subsequently sold as war surplus for 2% of their cost and the resulting postwar glut of cheap aircraft greatly depressed the market for new designs. The DH-4 with Liberty engines won the nickname of "flaming coffin" in the post-war years.

In 1918, at the urging of NACA, the Post Office inaugurated airmail service. Using the "coffins", post office service was risky at best. By 1925, 31 of the first 40 airmail pilots had been killed in crashes. Somehow, during the same 6-year periods, the safety record of many of the fledgling commercial operators was much better. In 1925 a government investigating board recommended that the Post Office let airmail contracts to private companies, rather than flying the mail themselves; Congress agreed, and passed the Kelly Airmail Act. One of the results was the formation of three "conglomerate" aviation companiesUnited Aircraft and Transport, North American (under GM control), and AVCOwhich proceed to win most of the longer airmail routes.

Read this article:

Fly the Frenzied Skies - Reason (blog)