Unions prod Obama to fix ailing airline industry

[November 12, 2009]  WASHINGTON (AP) -- Three decades of airline deregulation have helped make air travel more accessible to consumers through lower fares.

Now labor unions are questioning whether the industry is paying the price, and the Obama administration is listening.

Transportation Secretary Ray LaHood was holding a forum Thursday to discuss the state of the airline industry, which is mired in a severe economic slump and blamed for using a business model critics say undermines safety. The industry has suffered repeated shocks in recent years, including the 9/11 terror attacks, the SARS virus, volatile oil prices and the current economic downturn.

"U.S. aviation is facing severe economic uncertainty, and an open and frank conversation will help begin a continuing dialogue about the industry's future," Transportation Department spokeswoman Sasha Johnson said.

Airlines are offering the fewest seats to passengers, measured by available seats and distance traveled, in more than a decade. They have shed more than 158,000 full-time jobs since employment peaked in 2001 and lost an estimated $33 billion over the past decade. Thirteen airlines have filed for bankruptcy in the past two years.

The forum, which is closed to the public and the media, was organized at the request of the AFL-CIO's Transportation Trades Department.

Ed Wytkind, the trades department's president, said the industry has become dysfunctional, and all involved are suffering. He said he'd like to see a blue-ribbon commission to recommend solutions.

"We can't keep doing things the exact same way and expect a better outcome," Wytkind said, adding that new regulation probably should be considered.

The Air Transport Association, which represents major carriers, declined to comment ahead of the forum. Airlines are extremely wary of any discussion of a return to economic regulation. They contend they are already heavily regulated and taxed.

The industry sought financial assistance from the Bush administration after the terrorist attacks of Sept. 11, 2001, but came away largely empty-handed. More recently, industry leaders approached the White House for help with installing new equipment in airliners as the nation shifts from an air traffic control system based on radar to one based on satellite technology.

While airline deregulation has been regarded as a success for consumers, other trends have raised concerns about whether airlines are offsetting low fares at the expense of safety.

A report last year by a government watchdog said nine large U.S. airlines farm out 70 percent of major maintenance. Overseas repair shops handled one-quarter of the work, challenging the ability of U.S. inspectors to determine whether it is done properly, the report said.

Major airlines have also farmed out short-haul trips to regional carriers, which now account for half of all domestic flights. Regional airlines often hire pilots with significantly less experience and pay lower wages than major airlines. Both issues have been raised in the National Transportation Safety Board's investigation of the crash of Continental Connection Flight 3407, which crashed near Buffalo, N.Y., in February, killing 50 people. The flight was operated for Continental by regional carrier Colgan Air Inc. of Manassas, Va.

"A safe, secure, stable industry can't be driven by lowest common denominator," said John Prater, president of the Air Line Pilots Association. "The cheapest fare out there will not give us a transportation system that works for everyone."

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On the Net:

Transportation Department: http://www.dot.gov/

[Associated Press; By JOAN LOWY]

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