Magazine | February 19, 2018, Issue

Take Back the Skies

Five ideas to improve air travel

Having exhausted every voguish management trend, corporate-restructuring program, and streamlining technique, the feckless and rage-inducing U.S. air-travel industry in 2007 finally resorted to having a Maoist self-criticism session and set about calculating exactly how much flight delays cost the country: the airlines themselves, the businesses that rely on them, and travelers. The answer they came up with: a little more than $31 billion a year.

That’s big money. So why does nobody complain about it?

For one thing, more than half of Americans do not fly at all in any given year, and among those who do fly, half take only one or two flights. They go to visit Grandma (and “Grandma” here might very well be read “Vegas”) or take an annual family vacation to Disneyland. Air travel is something they think about mostly on those rare occasions when they are engaged in it.

The next largest category of air travelers — by far — is those who take nine or more trips a year. These are, for the most part, business travelers: salesmen, consultants, engineers, and other professionals whose business happens on-site, in person, and face to face. These fliers skew younger (median age about 46, but Millennials are the most frequent business fliers today) and richer (165 percent of the median household income) and slightly more white than the population at large.

Young, white, high-income, gainfully employed: You’d think the Republican party would be interested in making life easier for such people, but you’d be wrong. A combination of factors including an aversion to business regulation and a disinclination to back big and expensive infrastructure projects has kept the issue more or less off the conservative political radar. Like the problem of traffic congestion (see “The Everyday Problem,”  National Review, March 25, 2013), the defects of air travel impose real costs and competitive disadvantages on U.S. businesses and constitute a genuine quality-of-life issue that could, if intelligently addressed, produce some real political juice — especially for Republicans who do not have much of a future if they cannot figure out how to attract the support of young upwardly mobile professionals in an increasingly urbanized country.

It’s a big job. But here is a five-point agenda for getting started.

1) Privatize the airport authorities, which are dens of corruption and thievery, but subject them to stringent oversight. If you want to really appreciate the limits of Thomas Friedman’s “China for a day” approach to infrastructure, compare the case of David Samson, the corrupt head of the Port Authority of New York and New Jersey, to that of Li Peiying, the bribe-taking chairman of a state-owned airport holding company in Beijing. Samson, a pal of former New Jersey governor Chris Christie, leaned on United Airlines, forcing the company to operate a money-losing flight from Newark Liberty Airport to Columbia, S.C., where he had a vacation home. After conviction he was — get this — sentenced to house arrest, i.e., ordered to spend time at the country estate that he’d extorted United into helping him spend more time at.

Li Peiying was executed.

The Port Authority of New York and New Jersey is hardly alone. In Philadelphia, the brother of then-mayor John Street was given a multi-million-dollar contract related to airport services. He was by profession a hot-dog vendor, and his firm had no experience in airport services (or employees or revenue). LAX paid millions of dollars in fines related to illegal underground fuel facilities, and the former assistant chief of the airport police was convicted of tax evasion as the result of a corruption investigation into the chief of police at the Port of Los Angeles. Chicago awarded a $99 million airport-services contract to a company with mob ties, with a senior officer who had served time on corruption charges in a case that included one Anthony “Big Tuna” Accardo.

In a 2013 paper by Jia Yan of Washington State University and Tae Hoon Oum of the University of British Columbia, econometric indicators of underperformance at U.S. airports identified the effects of corruption in the misallocation of resources, personnel decisions, and more. The transfer of airports from municipal governments to quasi-autonomous airport authorities did little to prevent malfeasance, but the authors concluded that airport privatization might help: “Private airports are better insulated from political influences and give managers stronger incentives to exploit efficient inputs allocation. Also, internal organization of private airports is expected to function better than airport authorities especially in highly corrupt environments.”

In much of the world, airports are privately operated. That includes the excellent airports of Sydney, Auckland, Zurich, London, and many other cities. The United States has one privately owned and operated airport, at Branson, Mo.

Privatization brings competition, especially in cities such as New York, Dallas, and Houston, each of which is served by more than one substantial airport. And competition is the only way to impose real accountability.

2) Replace the “slot lottery” system with a straightforward auction. Competition also is limited by the number of slots — scheduled gate departures and arrivals — at airports in the United States and worldwide. Slots are assigned by a committee of — surprise! — airline operators, a process that helps protect incumbents and smother new competition by keeping upstarts out of the big airports.

Airlines did not pay for the slots they have been assigned, even though they can sell them. Nor do airlines pay premiums for primo slots for busy times at popular airports, even though they charge their passengers higher fares for these routes: “This means the airlines cream off the benefits from the scarcity value of prized slots, like those in the early mornings,” reports The Economist, which suggests establishing a congestion-pricing scheme to fund improvements in air-travel infrastructure.

A more straightforward reform, however, would be simply to auction slots.

3) Open the skies to foreign competition. If we really want to boost competition within the United States — the overwhelming majority of flights Americans take are domestic — then we need “cabotage,” the right of foreign operators to operate flights in the United States. While it may not be the case that Singapore Airlines is eager to provide daily service between Milwaukee and Albuquerque, it is possible that foreign carriers would have an interest in long-haul routes such as JFK–LAX or MIA–SFO, if only as a way to get paid to move airliners between major hubs. The domestic airline industry has seen years of consolidation and reduced competition. Time to let the Swiss, the Brits, and the Emiratis get into the market.

4) Abolish the TSA, which is a crime syndicate masquerading as an airline-security agency. The Transportation Security Administration was established in a panic after 9/11 and, like most decisions made in a state of panic, this one has yielded imperfect results. On a good day, the TSA isn’t very good: slow, intrusive, hostile, and — let’s not forget — ineffective. “Red team” exercises, in which investigators posing as travelers try to smuggle weapons and contraband past security, show high failure rates — up to 95 percent at Minneapolis–St. Paul, according to one report. ABC News reported an 80 percent failure rate in a broader series of TSA tests. Worse, TSA agents have been implicated in everything from petty theft from passengers’ luggage to child pornography, smuggling, and organized crime — even advising crime syndicates how to defeat TSA security measures.

There’s a better way to do this. Logistics experts talk about the “last mile” of delivery, getting products from distribution centers to their final destinations. For airport security, the critical problem is the last quarter mile or so, the distance between the ticketing lobby and seat 1A. But good security starts before that, as the Israelis have shown with their “concentric circles” model, which applies scrutiny at several intervals from the moment a flier arrives on the airport property and relies as much on human intelligence and judgment as it does on scanners and metal detectors. Similar protocols are in place at successful European airports such as Amsterdam’s Schiphol, where passengers are subjected to brief scrutiny and questioning before boarding a flight.

But we can start even earlier than that: at booking. Only 19 percent of U.S. fliers use TSA Precheck, and only 13 percent use Global Entry, and 73 percent use neither. We already have a two-tiered security system, and we may as well make it explicit. By completely redirecting frequent fliers who have been subjected to extensive background checks, we could remove about a fifth of the overall flying population — who almost certainly constitute a much larger share of actual fliers on any given day, because they fly more often — from the general-security process entirely, enabling us to direct more resources toward fliers about whom we know less.

Ideally, the work today entrusted to TSA would be divided among several entities: federal investigators with broad access to sensitive national-security data to screen airline and airport employees, private security or municipal police at airport entrances, and screening procedures, possibly carried out by the airlines themselves, at the jetway or other departure checkpoints.

5) And the hard part for Republicans: infrastructure and services. “The 20th century was about cities building airports. The 21st century will be about airports building cities.” So writes John Kasarda, co-author of Aerotropolis: The Way We’ll Live Next. Kasarda envisions a world in which airports play part of the role once played by industrial centers and central business districts — hubs around which commerce and leisure interact to produce new and surprising results: “Analogous in shape to the traditional metropolis made up of a central city and its rings of commuter-linked suburbs, the Aerotropolis consists of an airport city and outlying corridors and clusters of aviation-linked businesses and associated residential development that feed off of each other and their accessibility to the airport. A number of these clusters such as Amsterdam Zuidas, Las Colinas, Texas, and South Korea’s Songdo International Business District have become globally significant airport edge cities.” Kasarda writes of “aviation-linked” businesses, but it is increasingly hard to identify businesses that aren’t aviation-linked.

Connecting airports to cities means moving both travelers and goods, and most American cities do not do a very good job of it. Fly from Toronto to New York City and it’s virtually certain that the part of your trip that begins after landing will take more time than the flight itself, not even counting the Third World experience of going through passport control at JFK. The same is true of flying from Las Vegas to San Francisco or from Memphis to Houston. It takes three trains and more than an hour’s travel (sometimes much more — thanks, Governor Cuomo!) to get from Grand Central to JFK or the reverse.

There is a large role for the private sector in this — from ridesharing services to private bus operators — but there is no getting around substantial public expenditures. Expanded passport-control facilities and personnel to fully staff them, bus lanes, truck-only lanes, and direct rail connections between airports and urban centers cost money — lots of it.

But they also bring value: As Amazon shops for a second headquarters, what are the top three items on its wish list? A city of more than 1 million with an international airport and excellent mass transit. The following items — quality higher education, an educated work force, a good business climate — tend to follow the first three, at least to some degree. Rick Perry bitterly tells the story of Dallas’s losing its bid for the Boeing headquarters to Chicago. It wasn’t taxes or business climate that did in Dallas’s bid, obviously — it was that Boeing concluded that the sort of people it wanted to hire would rather live in Chicago than in Dallas. (The Boeing CEO who made that decision ended up moving to the sunny, low-tax Dallas suburbs, an irony not lost on Perry.) Quality of life matters. It’s what lets California get away with being California.

President Trump is pushing a $1 trillion infrastructure package, half of which is old-fashioned payola in which the federal government picks up 20 percent of the bill for whatever horsepucky program the aldermen in Chicago can pass off as “infrastructure.” Another quarter is directed at rural projects far from where the people and the GDP live. You want to fix something, fix the airports.

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