Thursday, March 9, 2017

Oscar the Grouch

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Oscar the Grouch
March 8, 2017

United Airlines CEO Oscar Munoz speaking at the U.S. Chamber of Commerce Aviation Summit, March 2, 2017 with Carol Hallett, counselor to the U.S. Chamber and former president and CEO of the Air Transport Association of America - now known as Airlines for America.

More hot air from Oscar.

Last week,  United Airlines CEO, Oscar Munoz, said about the Middle-East airlines: 

"Those airlines aren't airlines. They're international branding vehicles for their countries." 

Munoz made clear that United will aggressively push the US government to take action against the United Arab Emirates and Qatar over what he considers unacceptable government assistance to Emirates Airline, Etihad Airways and Qatar Airways.

'Those Airlines Aren't Airlines'

This sob-a-rama from the US "Big 3" about the Middle East airlines conveniently distracts from the escalating abuse going on in the main cabins of the US carriers. 

Under Munoz's leadership, making the United "better" meant "Basic" economy (no overhead bins for you), tight 30" pitch seating in most narrow-body aircraft, and adopting high-density, ten abreast seating on the airline's 777's with 31" pitch. 

Also, making  record profits  while simultaneously complaining about "unfair competition" has failed to register much sympathy with flyers. 

(Source: Money/CNN)
In recent years, the US airlines have also fought every consumer protection  proposal of the Department of Transportation -in Federal Court and in Congress. 

If the Middle-East airlines aren't airlines, then the US carriers aren't either - as they're essentially run by Wall Street investors who artificially inflate prices by restricting capacity. 

So many flights now are oversold, meaning they could add seats in almost any given market. But the US carriers won't do this because they only do what is needed to keep investors happy - not what is good for the flying public. It's like re-regulation, except done by the airlines and not by the US government.

Since the US legacy airlines set up their global alliances, which are like antitrust immunities, and consolidated the industry, their public-policy focus has been to thwart competition. 
For example, they are  fighting a proposal to lift the cap on the passenger facility charge (PFC) so that airports are not able to make improvements that would attract new airline competitors. Likewise, they are  monopolizing scarce slots at Washington National and LaGuardia to keep out low-cost airlines and fighting to block foreign carriers from entering the US market. They also want to crush airfare search and compare websites sites that keep airlines honest.

Partnership for "Open and Fair Skies"

Back in  2015, United, American Airlines and Delta Air Lines produced a report accusing  Qatar Airways, Emirates and Etihad of getting more than $40 billion of subsidies from their government owners. 

But the US Department of Transportation took a look at the US carriers' "factual evidence" and  threw it in the trash.

All national carriers get government support in some form or another. The reason the US airlines still exist is due to billions in government bailout money in the early 2000s and chapter 11 protection since then.

But the fight against the Middle East airlines seems to have been renewed. Maybe the US carriers feel emboldened by a new administration. Why are the CEOs all repeating the same line? We can almost predict that next there'll be allegations of terrorism links against the Middle East airlines.

Finally, who is behind the Partnership for Open & Fair Skies? It's  a lobbying group composed of American Airlines, Delta Air Lines and United Airlines, along with the Air Line Pilots Association, Int'l, the Allied Pilots Association, the Airline Division of the International Brotherhood of Teamsters, the Association of Flight Attendants-CWA, the Association of Professional Flight Attendants, the Communications Workers of America and the Southwest Airlines Pilots' Association.

Not Clear Cut What Trump Will Do 

Trump could easily side with the Middle East airlines, because the US carriers are not the good guys -and taking into account his  populist rhetoric. The  US airlines are the ones with the inferior product and like to nickel and dime people to death. Which makes the Middle East carriers seem, in contrast, like models of pleasant, well-run companies.

Trump is also in a difficult position with his campaign promises vs. his business interests in the Middle East. How can he protect jobs with the US major airlines and not offend the Middle East countries? 

As airlines push to eliminate foreign competition a nd privatize Air Traffic Control, President Trump must soon decide whether to drain the (air travel) swamp or fill it up with the airline lobby wish list. 

Airline executives and their unions:

Airlines did not support Trump for President but they did pay millions in campaign contributions to key Congressmembers - money that came out of the billions they charge passengers. 

Secretary of Transportation, Elaine Chao, has so far declined t o meet with airline passenger representatives. 

Norwegian has begun hiring thousands o f US employees while the big three US airlines routinely outsource American jobs for maintenance to other countries and replace US flight crews on  international flights by using code-share partners instead of their own crews to  take a bigger cut of the profits.

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