Mobility

Post image for Reforming Air Traffic Control Is Key to the Future Health of American Aviation

When we travel by air, the hassles of getting through airport security and delayed flights tend to weigh most on our minds. Few of us pay any attention to the institutions governing the 50-million-plus takeoffs and landings handled annually by Federal Aviation Administration (FAA) air traffic controllers that form a critical backbone for a sector that now accounts for over 5 percent of U.S. GDP.

For something so important, would you be shocked to learn that air traffic control in practice has experienced very little change since the 1960s? Increasingly, policy makers are aware that this unfortunate status quo will be unable to meet future air travel demand and that something must be done.

In a groundbreaking new study published by the Hudson Institute, Reason Foundation founder and Director of Transportation Policy Bob Poole lays out the case for dramatically reforming air traffic control to fully take advantage of new technologies and modern management practices. Adopting these, Poole convincingly argues, will result in a large and diverse benefits, including:

  • savings in cost and time for aircraft operators and air travelers;
  • reduced airport and airspace congestion, and hence fewer constraints on continued aviation growth;
  • increased safety, thanks to more accurate information in the hands of pilots and controllers and better communications throughout the system;
  • environmental benefits, as more direct routes and low-power landings reduce fuel consumption, noise, and emissions;
  • increased exports of U.S.-developed technologies and services to the global air traffic market. (Executive Summary, p. 3)

The purpose of FAA’s NextGen program is modernizing technology and increasing air traffic control efficiency. So far, however, the FAA has proven inept in its deployment. Poole identifies several institutional factors that are holding back modernization.

The main obstacle preventing us from realizing these benefits is the fundamental conflict between the FAA’s role as safety regulator and its role as air traffic control provider, which has led to an overcautious culture within the FAA’s Air Traffic Organization (ATO). This is compounded by the fact that FAA’s ATO faces a number of political oversight constraints, leading to it treating politicians and bureaucrats as its customers, rather than the airports and aircraft that rely upon its services. In addition, Poole cites technical “brain drain” to the private sector and an over-reliance on outside contractors as key institutional challenges.

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Post image for The Great Italian Auto Bailout — Courtesy of U.S. Taxpayers

At the beginning of 2014, Detroit may be bankrupt, but they’re cheering the five-year-old U.S. auto bailout in Italy. That’s because after being the beneficiary of billions in U.S. taxpayer largesse, Fiat, the leading Italian auto company, is going to buy its final stake in Chrysler from that other big bailout recipient, the United Auto Workers (UAW).

“Chrysler’s Now Fully an Italian Auto Company,” reads the Time magazine online headline. But wait a minute! Wasn’t the bailout supposed to be about saving the American auto industry?

As Mark Beatty and wrote in The Daily Caller in November 2012, after presidential candidate Mitt Romney made the controversial claim that Fiat would be expanding production of Chrysler’s Jeep in China (a claim that turned out to be correct),

The real outrage arising from the 2009 Chrysler bailout is not that its parent company, Fiat, is planning to build plants in China. It’s that the politicized bankruptcy process limited Chrysler’s growth potential by tying it to an Italian dinosaur in the midst of the European fiscal crisis. The Obama administration literally gave away ownership of one of the Big Three American auto manufacturers to an Italian car maker struggling with labor and productivity issues worse than those that drove Chrysler to near-liquidation.

As we noted in the piece, much of Chrysler’s profits from its overhauled line are going to prop up Fiat’s failing, money-losing Italian business, rather than to expanding production and jobs in the U.S. Moody’s had downgraded Fiat’s credit rating to “junk” even before the Obama administration arranged for it to acquire a Chrysler stake, and in Autumn 2012, Moody’s gave Fiat another downgrade that the Financial Times described as even “further into ‘junk’ territory.”

Around this time, Barron’s put it like this in a headline, “This time, Chrysler could bail out Fiat.” Actually, the Barron’s headline is slightly misleading in one respect — Fiat didn’t contribute much of anything to the Chrysler’s bailout.

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Post image for Busybodies in Congress Prepared to Re-Prohibit Voice Communications During Flight

After two decades with a ban on the books, the Federal Communications Commission is set to consider allowing transmitting mobile devices on aircraft. On Thursday, the FCC will vote on whether or not it will begin allowing transmitting mobile devices in flight. The European Commission recently approved 3G and 4G transmissions aboard commercial flights with some limitations and leaving the decision to permit voice communications up to individual airlines. Recent research has found that there is little risk of aircraft instrument interference from passengers’ portable electronic devices, which led the Federal Aviation Administration to recently end its prohibition on use of non-transmitting devices below 10,000 feet.

Airlines can still decide individually if portable electronic devices are allowed during all flight phases, but most if not all will soon permit their customers to use their devices in airplane mode gate to gate. The airlines would have the same discretion to permit or prohibit transmitting mobile devices if the FCC decides to reform its current policy. Some airlines may wish to allow their customers to engage in voice communications during flight, others may not.

But some in Congress wish to outlaw this choice. Bill Shuster, R-Pa., who chairs the House Transportation and Infrastructure Committee, is set to introduce a bill that would “prohibit an individual on an aircraft from engaging in voice communications using a mobile communications device during a flight of that aircraft in scheduled passenger interstate or intra-state air transportation.”

“For passengers, being able to use their phones and tablets to get online or send text messages is a useful in-flight option. But if passengers are going to be forced to listen to the gossip in the aisle seat, it’s going to make for a very long flight,” Shuster said in a statement. “For those few hours in the air with 150 other people, it’s just common sense that we all keep our personal lives to ourselves and stay off the phone.”

Another Republican, Lamar Alexander, Tenn., is considering whether or not to introduce a similar bill in the Senate. “Stop and think about what we hear now in airport lobbies from those who wander around shouting personal details into a microphone: babbling about last night’s love life, bathroom plans, next week’s schedule, orders to an assistant, arguments with spouses,” Alexander said in a November statement. “Imagine this noise while you travel, restrained by your seatbelt, unable to escape.”

According to the Red Team/Blue Team media narrative, the Republicans are supposedly skeptical of regulation while the Democrats enthusiastically embrace it. Yet here we have a proposed arbitrary political intervention coming from these supposed skeptics on Team Red — who have charted out a more pro-regulatory course than European socialists.

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Post image for Dumbest Reason to Be Skeptical of Autonomous Vehicles: They Might Cost Auto Mechanics Their Jobs

Today, the House Subcommittee on Highways and Transit of the Transportation and Infrastructure Committee held a hearing on “How Autonomous Vehicles Will Shape the Future of Surface Transportation.” This hearing is the first time Congress has seriously addressed autonomous vehicles, and many observers were rightly worried that political interest from Congress might lead to unnecessary economic intervention.

Fortunately, the majority of the questions from members of Congress were reasonable, and the witnesses were largely able to explain away concerns and emphasize the need for regulatory caution.

There were some notable exceptions to this rule. In his questioning, Rep. Albio Sires, D-N.J., expressed concern that highly automated or autonomous vehicles would be so technologically advanced that any repair would need to be conducted by highly trained engineers employed by manufacturers, thereby putting mom-and-pop auto shops out of business — something like that, anyway.

“I think that’s just going to put people out of work,” Sires told the panel. “You’re going to have to send these cars back to the shop. I can’t see anybody doing work on these things. I mean, you have to be so sophisticated. And I guess that’s where we’re headed. So can anybody tell me if we’re going to put people out of work?”

After receiving answers from the panelists — who somehow managed to stop themselves from bursting out laughing — Sires wrapped up his questioning with, “This is very exciting, the more I read about it. But it’s just scary to me.”

What scares me is lawmakers like Sires. First, he apparently believes parts will no longer wear out in the future. While auto mechanics may need additional specialized training, regular service will still be required and will still rely heavily on auto shop repairs (think maintenance related to the vehicle’s suspension, internal combustion powertrain, climate control, etc.).

Second, and most importantly, is the possibility of auto mechanics doing fewer repairs on autonomous vehicles in the future even a legitimate public policy concern? Should government have also taken positions on ex-occupations that technology has rendered obsolete, such as icemen, typesetters, lamplighters, elevator operators, and pinsetters at bowling alleys? Those who recognize the importance and value of creative destruction would say no:

 

As I’ve noted before, the future appears bright for autonomous vehicles — provided busybody politicians and bureaucrats stay out of the way. If policy makers wish to promote vehicle automation innovation, they should focus on repealing and preventing the promulgation of unnecessary, burdensome regulations.

Post image for Memo to Road Socialists: There Is Nothing Unlibertarian about Road Pricing

Virginia just elected Democrat Terry McAuliffe as governor, as had been predicted by every poll conducted during the past few months — although at much smaller margins than had been projected. During the twilight hours of the campaign, some of Republican Ken Cuccinelli’s supporters began attacking Libertarian Robert Sarvis for various alleged ideological sins. One in particular involved Sarvis’s expressed support for adopting a user-based funding model for Virginia’s roads, specifically his mention of a mileage-based user fee as a possible replacement to fuel and non-user tax revenue.

The claim is that this is necessarily a government surveillance scheme and that such a proposal is inherently unlibertarian. This is false and is based upon ignorance of how such systems actually operate. Furthermore, labeling a mileage-based user fee system as unlibertarian runs contrary to the opinions of virtually every libertarian transportation scholar. What follows is my attempt to articulate why libertarians ought to support mileage-based user fees over fuel taxes and general tax revenue funding for transportation.

Virginia’s New Transportation Law

To put this in context, outgoing Republican Virginia Governor Bob McDonnell enacted this past spring a tax-and-spend transportation law that raised taxes, failed to do serious program reform, and increased the share of non-user funding for Virginia’s roads. CEI harshly criticized the plan for these reasons. In the lead up to the vote, Cuccinelli supported a watered-down proposal that didn’t rely on the general sales and use tax increases backed by McDonnell. However, the Cuccinelli-supported plan, just like the McDonnell plan, relied on increased sales tax funding of transportation, and assumed Congress would legalize state Internet sales taxes so Virginia could use the “Amazon tax” to fund transportation projects.

In October, the Cuccinelli campaign released a seemingly reasonable transportation plan that stressed the devolution of funding and management responsibility from the state to local authorities (the Sarvis campaign also repeatedly stressed decentralization of transportation funding and management). While decentralization, ideally to the facility level, is a goal shared by many fans of free markets and limited government, the Cuccinelli plan failed to articulate how locally controlled roads should be funded — specifically, the revenue collection mechanisms. Out of the three candidates, only Sarvis offered user-based road pricing alternatives such as tolling and a mileage-based user fee (MBUF).

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Post image for Happy Halloween! FAA to Allow Portable Electronic Devices During All Flight Phases

A month ago, a Federal Aviation Administration (FAA) Aviation Rulemaking Committee (ARC) recommended that the agency drop its ban on portable electronic device (PED) use during takeoffs and landings. Today, the FAA announced it was largely adopting the ARC’s proposals, which will soon permit passengers of commercial airlines to use non-transmitting PEDs (although WiFi on WiFi-enabled airliners and short-range Bluetooth devices will be allowed) gate to gate.

This move was supported by both the airlines and the unions representing flight attendants. After years of evidence supporting such a policy — electromagnetic interference with instruments from PEDs was never adequately demonstrated in the first place — the ritual of powering down cell phones (in airplane mode) and other devices twice during flights will soon be a thing of the past.

Note that the prohibitions will remain in place until operations procedures are implemented and individual airlines receive FAA approval for the PED policy change, so those traveling today and in the very near future will still need to switch off their phones and tablets. Pilots landing in low-viability conditions may still ask that passengers power down their PEDs, although this largely unenforceable and unnecessary provision was most likely included as a liability shield.

The FAA has released a short FAQ for passengers on what the new PED rules do and do not permit.

Some have asked why voice communications — use of cellular phones — are still prohibited. Despite supposed safety justifications, the reason for the ban has little to do with airliner instrument interference and largely to do with how cellular networks are designed and managed. The Federal Communications Commission (FCC), not FAA, has jurisdiction over in-flight cellular device use, and its 1991 ban is supported by the wireless industry. As Mike Elgan succinctly explained several years ago:

Cell phone and tower designs are based on the assumption that at any given time, only a few cell towers will be close to any specific phone. So any given tower will use different channels than those used by other towers closest to it, but will use the same channels as towers farther away. However, when a phone is used in an airplane, it might have roughly equal access to two or more towers that use the same channels, which confuses the carriers’ computer systems. This situation might result in interrupted calls, reduced system capacity and other problems.

Of course, this could be fixed in any number of ways, including an overhaul of the software used to manage calls between towers, but the fix would cost money. The ban is cheaper.

Of course, many passengers do not enjoy listening to their neighbors’ conversations, so even if the FCC were to rescind the ban, some airlines are likely to continue prohibiting cell phone use during flights.

Post image for Jane Brody’s Uninformed Attack on Cars and Suburbia

While at a conference where participants discussed the wannabe social engineers cum urbanists’ war on automobility and housing affordability, Jane Brody’s broadside against Americans’ “dependence on automobiles” and suburban living was published by the New York Times. Brody, unlike her Times colleague Michael Pollan, isn’t a complete and total kook when it comes to agricultural biotechnology, and she is one of the more thoughtful nutrition writers in America. Unfortunately, Brody has fallen for one of the popular but incorrect urban elitist tropes about cars and the suburbs.

Long commutes are killing us! Urban cores are healthier than the suburbs! Low-density living is just fattening us up for self-slaughter!

Scary stuff, just in time for Halloween! But the “evidence” supporting such fear mongering ranges from flimsy to nonexistent.

In her introduction, she unintentionally sets the stage for an interesting contradiction that drives suburb-hating urbanists crazy. “My son used to work in New Jersey, which entailed a hated commute by car that took 50 to 90 minutes each way,” writes Brody. “He quit that job when his sons were born and, working part-time from home, cared for the boys. He now commutes to work in the city by foot and by subway, giving him time to read for pleasure.”

Despite the fact that many two-income American households don’t have the realistic option to simply leave their jobs for childbirth, Brody fails to mention that the New York City metropolitan area has the longest commutes in the nation. Oh, but that’s just for suburban New York metro commuters. City dwellers avoid those lengthy commutes, right? Wrong. New York City residents who can’t afford to live in Manhattan can have extremely long commutes just like their suburban neighbors — and some of the longest commutes in the metro area are those of Brooklyn and Queens residents. See this handy map that WNYC put together with Census data.

This is to be expected. New York City has the lowest auto ownership in the nation and the highest public transit usage (about 40 percent of all transit trips taken in the U.S. are within the New York City metropolitan area). Those who get to work by transit rather than car generally have longer commutes: you need to walk to the transit stop, transfer, etc. That’s why New York City drivers tend to have lower commute times than transit users. If you’re looking for the shortest commutes, you’ll need to move to auto-oriented, low-density places like Manhattan, Kansas, rather than Manhattan, New York, New York.

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Post image for More Bipartisan Opposition to Obama Administration’s Move to Block Airline Merger (Including Rahm Emanuel)

Another day, another round of public bipartisan opposition to the Obama Department of Justice’s lawsuit to block the pending American Airlines and US Airways merger. In today’s edition, a coalition of big city mayors wrote to Attorney General Eric Holder expressing their collective concern that blocking the merger will harm their cities’ economic growth and airline industry employees. The letter concludes:

By attempting to block the proposed combination, the Department has needlessly added to the uncertainty that these employees and their families must endure and has put jobs at risk.

Our cities rely on the airline industry to support existing businesses, attract new businesses and to keep our local economies moving forward. e health and well-being of our cities and our citizens depends on this combination moving forward.

For these reasons, we ask you to settle your lawsuit with American Airlines and US Airways and allow the combination to proceed.

It was signed by seven mayors: Patsy Kinsey (D-Charlotte), Michael Nutter (D-Philadelphia), Greg Stanton (D-Phoenix), Mike Rawlings (D-Dallas), Betsy Price (R-Fort Worth), and Carlos A. Gimenez (R-Miami-Dade County). In a surprising twist, former Obama White House chief of staff and current Democratic Chicago Mayor Rahm Emanuel also signed the letter.

It was announced this afternoon that Oklahoma Attorney General Scott Pruitt (R) intends to file an amicus brief supporting the merger, which will likely be joined by other states.

I previously noted the dwindling support for the Justice Department’s deeply flawed lawsuit and recommended two real pro-competitive policy reforms Congress and the president ought to pursue. President Obama’s most important constituency, organized labor, has strongly opposed the merger lawsuit since its filing. As the ranks of opponents from both sides of the aisle grow, it is becoming unclear what the Obama administration hopes to accomplish by continuing forward with its misguided attack on the American Airlines-US Airways merger.

Post image for More than a Third of House Dems Oppose Obama’s American-US Airways Merger Lawsuit; What Real Pro-Competition Policy Looks Like

Bipartisan opposition to the Obama administration’s reckless assault on the pending merger of American Airlines and US Airways is growing. While the end of the partial government shutdown dominated yesterday’s news cycle, 68 House Democrats (over one-third of the House Democratic caucus) signed a letter to President Obama urging him to end his administration’s opposition to the airline merger. Led by Reps. Marc Veasey, D-Texas, and Ed Pastor, D-Ariz., the members of Congress “believe that DOJ’s concerns as outlined in the complaint filed last month are not an adequate representation of all of the facts” and call on the administration “to reconsider its efforts to prevent the American and US Airways merger from going forward.” I previously noted organized labor’s strong opposition to the lawsuit and one of the six state attorneys general that joined the DOJ lawsuit has since dropped out.

Despite uninformed support for the Department of Justice’s hardball antitrust tactics from progressive bloggers like Matthew Yglesias, the DOJ complaint suffers from serious flaws. Actual aviation experts, such as Brookings Institution transportation economist Clifford Winston, have noted that the new American Airlines is following the natural evolution of U.S. aviation into a truly global network that has been enabled by partial deregulation.

The so-called consumer advocates who blindly oppose the merger would better represent consumers by calling for further deregulation of the airline industry to increase competition. In the interest of being “part of the solution,” I offer two no-brainer policy reforms to achieve this end.

First, Congress should repeal the protectionist policies that outlaw foreign carrier competition along domestic routes. Under current law, airlines must obtain a certificate of convenience from the Department of Transportation in order to operate in the U.S. (49 USC § 41102). It reads in part, “The Secretary of Transportation may issue a certificate of public convenience and necessity to a citizen of the United States authorizing the citizen to provide any part of the following air transportation the citizen has applied for” (emphasis added). “Citizen” is defined in statute (49 USC § 40102(a)(15)) as:

(A) an individual who is a citizen of the United States;

(B) a partnership each of whose partners is an individual who is a citizen of the United States; or

(C) a corporation or association organized under the laws of the United States or a State, the District of Columbia, or a territory or possession of the United States, of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the United States, which is under the actual control of citizens of the United States, and in which at least 75 percent of the voting interest is owned or controlled by persons that are citizens of the United States. (emphasis added)

This anti-consumer law is why we don’t have low-cost foreign carriers such as Ryanair operating along U.S. routes. Virgin America, often associated with British serial entrepreneur Richard Branson, is mostly owned by a U.S. investor partnership led by Cyrus Capital Partners. Under current law, Branson’s Virgin Group is permitted to own just 25 percent of the airline. This is stupid.

Second, Congress should eliminate the federal cap on passenger facility charges (currently $4.50 per enplanement). Federal policies force airports to be heavily reliant on airlines for funding. The effect of these policies is that airports have little leverage in negotiations with airlines over gate access, the result being a proliferation of long-term exclusive- and preferential-use gate leases. The impact on competitiveness and air fares is large. Exclusive- and preferential-use gate leases (as opposed to common use open entry) result in gate under-utilization by allowing incumbent airlines to essentially prohibit most new entry from outside carriers. It is estimated that air fares are more than $5 billion higher annually (in 2013 dollars) because of artificial barriers to airport access. This is also stupid.

In addition, noise restrictions, slot restrictions, excessive and generally nonsensical environmental review of airport expansions and construction, and the federal government’s continued mismanagement of air traffic control all contribute to reduced airline competition and increased fare prices. Instead of attacking the rationalization of a network industry they clearly do not understand, progressives like Yglesias should focus on current laws and regulations that reduce competitiveness in civil aviation if they actually give a damn about consumer welfare.

Post image for Update on American Airlines-US Airways Merger: Judge Approves American’s Bankruptcy Plan

Today, Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York approved American Airlines’s reorganization plan to exit bankruptcy protection, predicated on approval for the proposed American Airlines-US Airways merger.

Last month, many were caught by surprise when the Department of Justice and a handful of states filed suit in an attempt to block the merger. This puts the Obama Justice Department to the left of the European Commission, which had approved the merger. I previously highlighted some of the absurdities of the DOJ’s case and noted that President Obama risks alienating his labor union allies by proceeding with its foolish attack on the airlines.

The airlines are also looking to extend their merger deadline from December 17 to a future date yet to be determined, signaling that American and US Air believe they will likely win their fight with the Justice Department. The DOJ originally tried to push back the start date of the trial on their lawsuit until March, in a clear effort to derail or at least dramatically increase the costs of the merger.

However, Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia said the DOJ’s proposed date was “too far off” and scheduled the hearing for November 25, much closer to the airlines’ requested date of November 12.

Last week, the DOJ filed an amended complaint, dropping three dozen routes from its flawed analysis. Both American and US Air filed responses on Tuesday that suggest the airlines will do a good job of undermining the credibility of DOJ’s analysis (or lack thereof) in court.

My favorite line from American’s response:

The Complaint presents no coherent rationale supporting its challenge to the merger. Rather, it cobbles together a collection of ad hoc contentions based on anecdotes involving small numbers of passengers and historical e-mails and other documents irrelevant to this transaction, while ignoring the central facts and economic realities of today’s airline industry. (p. 2)

My favorite line from US Air’s response:

But rather than considering how this merger will create robust competition in the future, or how blocking the merger will impede competitive forces, plaintiffs rely on rhetoric and innuendo. The Complaint makes broad, unsupported claims about past industry coordination and cobbles together out-of-context statements in an effort to suggest by anecdote what the plaintiffs cannot support with analysis. This skewed and incomplete focus ignores the current realities of the airline industry. (p. 5)