Flying Blind: Airline Deregulation, 30 Years Later
Flying Blind: Airline Deregulation, 30 Years Later
http://www.apfa.org/images/press/demos_report_release.pdf
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June 25, 2009 Scott Treibitz
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Flying Blind: Airline Deregulation, 30 Years Later
Travelers, Workers, Safety All Victims, Report Finds
White House urged to form task force on regulatory reform
Washington, DC – Thirty years of deregulation has sent the airline industry into a steep
nosedive, reducing consumer options and services, increasing delays, wiping out thousands of
jobs, undercutting workers’ wages and benefits, bankrupting countless companies, and causing a
downward spiral in safety oversight, according to “Flying Blind: Airline Deregulation
Reconsidered,” a comprehensive report published today by Demos, a non-partisan public policy
research organization.
“Deregulation was promoted as a way of enhancing consumer choice and industry efficiency,”
the report states. “Over time, it has had the opposite effect.”
Indeed, deregulation has literally reversed the fortunes of the entire industry, conclude the
report’s authors, James Lardner and Robert Kuttner, citing the fact that “between 2000 and 2008,
U.S. airlines reported net losses of over $33 billion – a sum that far exceeds their $17 billion in
accumulated income between 1938 and 1999.”
The report cites the fact that in 2007, “More than a quarter of all flights were delayed, accounting
for 112 million lost passenger hours.
“For the past 30 years, we’ve witnessed first hand the sweeping damage that airline deregulation
has done to the traveling public whose safety we protect, to the flight attendants we represent, and
to the entire airline industry,” said Pat Friend, president of the Association of Flight Attendants-
CWA (AFA), which has contracts with several major airlines.
“The standard of living of airline employees has deteriorated right along with the quality of
service as a result of deregulation,” said Friend. “Unfortunately, our members also absorb the
brunt of the flying public’s growing frustration with declining services and the constant delays
that deregulation has created.”
“With a few exceptions, the airlines adopted a two-pronged strategy of cost reduction, cutting
back on workers’ wages and benefits, in the first place, and on customer service and amenities, in
the second. So, while most of today’s passengers pay less, they also get less—less legroom, less
service, and less help in the increasingly common event of a cancelled flight or a missed
connection,” said Lardner and Kuttner.
Laura Glading, president of the Association of Professional Flight Attendants (APFA), which
represents flight attendants at American Airlines, said that “one of the more disturbing facts the
report reveals is that if fares were lowered at all, it was solely because the companies were using
the chaotic environment that deregulation created as an excuse to drive down wages and
benefits.”
“America needs an airline industry that can do right by its owners and workers a well as its
passengers," the report states. "It is simply not in the public interest to have airlines engaged in a
race to the bottom on wages, benefits, and working conditions.”
Both union leaders strongly endorse the reports’ recommendation that “the White House and the
Department of Transportation take the lead in creating a task force to examine the industry’s
problems and propose solutions.”
The report documents how deregulation has created “a steep downhill slide in wages, benefits,
working conditions, and labor standards” throughout the industry, none more so than flight
attendants, who “have experienced pay cuts and work-rule changes as well as layoffs,” according
to the report.
“At American Airlines, the number of flight attendant positions has fallen by 35 percent, from
26,000 in 2003 to 17,000 today, and American recently announced another 1,200 flight attendants
may be furloughed next fall,” said Glading. “Many flight attendants are also working three, four,
five extra days a month in order to come even close to their former pay levels.”
“With lower wages and increased market power,” the report states, “you might expect the airline
business to be booming. But deregulation has been a big failure for the long-term health of the
industry as well.”
The report also raised concern about diminished safety oversight, which the report attributes to
rapid increases in subcontracting of short-haul routes to smaller regional carriers and a massive
increase in maintenance outsourcing that has challenged the FAA’s ability to conduct safety
inspections.
“The crash of Continental Connection Flight 3407 blew a dirty secret,” the report states. “Most of
the major U.S. airlines are no longer directly responsible for many of the flights they advertise
and sell.”
Transportation economist and airline consultant Dan Akins notes that “by shifting flights to
smaller regional airlines, the legacy carriers have created a system in which you have relatively
inexperienced pilots flying at lower altitudes through more challenging weather conditions, often
to more isolated and difficult airports.”
The report concludes that “the speed at which the practice of outsourcing [of maintenance] has
grown is deeply problematic in itself,” often to shops abroad where work rules and safety
standards are more lax.
“Today, while the [FAA] inspection staff is no bigger and remains largely based in the same hub
cities, the work is scattered across nearly 5,000 facilities in the U.S. and abroad.
Thus, the report concludes, “through a series of seemingly small compromises, the airlines have
placed themselves in the position of encouraging passengers to entrust their lives to less
experienced and less well-paid pilots, and to travel in planes that have not always received the
same high level of care.”
“Our members see every day how those hazards are doing great damage to them, their families,
and the traveling public,” said Friend. “It’s time for the federal government to take action, and
we’ve written to Congress urging members to support a task force to address the failures detailed
in the Demos report.”