FAA needs reforming, not complete rejection

August 12, 1996|By Richard C. Leone

NEW YORK -- Even before the ValuJet crash and TWA tragedy, the Federal Aviation Administration was receiving plenty of attention from the nation's elected officials and public-sector critics.

In pursuit of further deregulation, many of them have been leading a charge to eliminate the agency altogether, suggesting that essential functions like air safety be entrusted to a profit-driven, privatized monopoly.

Now, the complaint is different. The FAA, we hear, isn't strong enough and doesn''t provide close scrutiny of aviation. If so, one should ask what has been done lately to strengthen the agency and upgrade its employees.

The FAA's situation reminds me of an old joke about two passengers on an economy flight. The first says, "You know the food they serve is lousy."

And the second answers, "Yeah, and such small portions."

This kind of reasoning may be the only way to reconcile the current demand for more oversight and the emphasis on deregulation during the previous two decades.

During the Reagan years, the desire to keep the government out of the aviation business shaded into outright hostility toward government agencies, including the FAA.

When President Reagan fired the striking air-traffic controllers in 1981, his action foreshadowed more than a decade of layoffs and cutbacks in overall regulatory activity.

Consider one pair of statistics: In 1970, before deregulation, there were 134,000 active civil aircraft in the U.S. By 1993, that number had grown by about 50,000.

Yet during the same period the number of FAA employees declined by about 500.

And while the National Transportation Safety Board sometimes appears to be more visible because of its high-profile role in investigating air disasters, it is the FAA that has day-to-day responsibility for monitoring and maintaining safety.

While the FAA is far from perfect, its efforts have been handicapped by annual struggles to obtain congressional appropriations for new equipment and systems in order to modernize its operations.

In this context, perhaps it is unrealistic to expect anything more than "Regulation Lite."

Over the same period, the newly deregulated airlines went through a wrenching period of radical reorganization involving layoffs, buyouts and bankruptcies.

One consequence of deregulation has been the collapse of many large airlines: Pan Am, Braniff, Eastern, Texas Air, New York Air, People Express and others.

The surviving companies have been under immense financial pressure, losing more money during the first decade of deregulation than the industry had earned since the flight of the Wright brothers.

Companies under pressure tend to cut costs (which can be good for prices) and perhaps they even cut corners (which can be scary for the flying public).

One symbol of the financial squeeze is the aging of the airline fleet. At the outset of deregulation, the average age of a scheduled airliner was about five years. Now it's 15 years.

Another hallmark of the new order is the plethora of small, low-cost airlines jumping into the business.

In order to maintain a competitive environment in the face of these circumstances, regulators have permitted a new sort of company to fly -- "virtual airlines."

Outside sources

Most of these don't own much of anything and don't do many of the basic things we associate with being an airline. They lease their airplanes and contract out their maintenance and crew training.

While they remain a very small part of the market, accounting for less than 15 percent of passenger miles, they do provide some competition to the bigger airlines.

Otherwise, the other new pattern in aviation -- total dominance of many individual markets by one airline -- would mean less overall competition rather than more.

The bedrock of aviation policy ought to be the fact that enjoying the fruits of deregulation requires competition in the private marketplace and government oversight to redress the market's limitations.

We need public agencies with enough resources to improve safety and enough independence to preserve competition.

Rather than scrap the FAA, we should think about the possibility of two separate agencies -- one focused on safety and traffic control and the other on promoting competition -- as an important step toward restoring stability to the industry.

We need to relearn an old truth about aviation: Without a strong public agency and valued public servants, the flying public can only hope the worst thing that happens on a flight is a case of indigestion.

Richard C. Leone is president of the Twentieth Century Fund, a policy research foundation.

Pub Date: 8/12/96

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