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  • June 2, 2008

    DOT’s Mary Peters & Air Woes: Meaningful Change, Or Bit O’ Baloney?

    Filed under: DOT, Fuel Surcharges — Rick Seaney @ 5:40 pm

    This is the first in a series of reports from my meetings last month with Department of Transportation officials in Washington, D.C. Your comments are welcome.

    I interviewed Transportation Secretary Mary Peters a couple of weeks back, and she is certainly a very nice woman.

    A self-made woman, as well: according to online reports, she married young, worked odd jobs, raised 3 kids, received a bachelors degree from the University of Phoenix, and had worked her way up the ranks of the Arizona Dept. of Transportation when Washington beckoned. Oh, and Peters’ early marriage endured: this summer (if I have my dates right), she and husband Terry celebrate their 42nd wedding anniversary.

    But what about Peters and the air travel industry? We’ll talk about the “fixes” that she and the government are trying — but, is this meaningful change — or a bunch of baloney?

    I want to begin by saying, for the most part, Mary Peters really gets it; she knows air travel has deteriorated and there are too many delays and cancellations and general all around dissatisfaction. She made a point of mentioning this when she was nominated as Transportation secretary back in 2006, saying all these difficulties are “robbing our nation of productivity and our citizens of quality time with their families.”

    And as we all know, the main problem is oil.

    The air travel industry is being ripped to pieces by the calamitous rise in oil prices. Now there’s only so much the government can do about this; I asked Peters about the possibility of oil at $200 a barrel, and she told me that while she’s no expert on the subject, she “has a feeling” that oil prices will stablize this summer. Okay, but then what?

    She mentioned the need to close the so-called “Enron Loophole”; on Jim Hamilton’s blog (he’s a securities analyst who’s been tracking and analyzing and securities law and regulation for nearly 30 years), he explained it like this: “In closing the Enron Loophole, the measure would increase federal oversight authority to detect and prevent manipulation and to limit speculation in U.S. electronic energy markets.”

    Peters also told me she was “very concerned” for the flying public, and worried that many flights would become out of reach to all but the most affluent among us — not unlike the days before deregulation. Okay, so? Well, then Peters said the government is working on the problem and cited the administration’s moratorium on fuel deposits into a national reserve. However, as I pointed out in a later blog post, those deposits (that have now been freed up) represent a fraction of that storied “drop in the bucket” compared to the amount of oil Americans go through in a single day.

    I like some of what I’m hearing from Peters; she is with the consumer when it comes to new fees, and told reporters (including me) that, “We…are making it clear that airlines may not impose increased fees or new restrictions for baggage after a passenger has bought a ticket.” Yes, I like that (of course, I’d like it even better if we weren’t constantly being nickel-and-dimed by the airlines to begin with, but that’s another battle).

    In related matters, Peters announced that flights during peak flying times at Newark will be capped at 83-flights per hour; that will be helpful for those going in and out of that airport, but JFK and LaGuardia are still horrendous. Well, Peters has ideas for that too: one of them is making Newburgh, New York the 4th metropolitan NYC airport. Only trouble is, Newburgh’s airport, Stewart International, is a 2 hour drive from Manhattan; but not to worry, Peters is working on plans to study mass transit options to get New Yorkers and the rest of us there. Have to wonder how popular that will be.

    Still, it’s better than doing nothing — yet none of these “fixes” addresses the “monster” problem of the airports’ air traffic control system; the “monster” being the fact that the system is obsolete. Back in 2006, Peters herself described the system as “more suited to a bygone era” and I could not agree more. We need changes, and changes are not happening.

    And consider this: for years, all we’ve been hearing about is “NextGen” systems that will provide airlines with GPS systems and allow the ATC to perform other necessary tasks. You know GPS systems, of course — nearly all of us have a cell phone with such a system! And yet, after all these years of talking about it, the air travel industry is still waiting for such “innovations” to arrive. And waiting.

    No, I’m not dumping this on Mary Peters’ shoulders; she hasn’t even been on the job 2 years. But she is the one who keeps touting 21st century technology — when addressing a special “bloggers only” news conference that I was invited to attend a couple of weeks ago, she declared, “If I am going to call for twenty-first century solutions for our transportation system, I better communicate them in a twenty-first century way.”

    I like a lot of what you’re saying, Secretary Peters; but I’d like to see some solid results even more.

    In the meantime, in the couple of short weeks since I sat down and talked with Peters, the price of a barrel of oil has jumped another $10.

    1 Comment »

    1. The problem is not oil. That is just a symptom. This is like blaming the patient for being sick for having a fever. The “virus” killing this industry is pricing. It NEVER stabilizes. Prior to 1938 this industry was on the ropes. During regulation it stabilized and grew. After de-regulation the industry was back on the ropes. How much on the ropes? As an industry it has now earned the distinction of being 35 billion dollars in the red. And that’s measured from 1938! In other words all the profits earned in regulated years have all been wiped out by the losses during the last 30 years. What form any government oversight should take is really the debate. We certainly need a framework to stabilize ticket prices so the companies stay in business and at the same time the public has reasonable prices. That means the deep discount ticket should be history and exorbitant business fares should be lowered. And yes, those offensive fees should be prohibited pronto.

      Comment by Steve Filson — June 2, 2008 @ 11:21 pm

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