Are The Airlines Spying On Us Yet?

At one point, a couple decades ago, some of the high-end airlines introduced a privacy feature for first class travelers: enclosed cabins. A flight attendant could stand oh his or her toes and took over the wall, but otherwise you could do whatever you wanted in privacy. Apparently, too many people did and they seem to have abolished them. Now it looks like they're introducing the opposite: tiny cameras that can watch you during the flight. Do you think that's a little intrusive? You're watching a move and "someone" is watching you-- an airline employee? a government entity?

Last month, CNN reported that Singapore admits they have embedded cameras in their newer inflight entertainment systems but claim they're deactivated. "Deactivated?" Why are they there then-- in order to be activated next week or the week after?

The fact that some aircraft seats have built-in cameras is not new knowledge. Singapore Airlines' inflight entertainment system is manufactured by Panasonic Avionics, a US-based company that supplies IFE for many of the major airlines and French company Thales. Panasonic announced a while back that it's added cameras onto seat backs.

And in 2017, Panasonic Avionics announced a partnership with Tascent-- a biometrics and identity innovation company.

"The companies will combine Tascent's biometric identity devices, software and services with Panasonic Avionic Corporation's in-flight entertainment and communications systems to provide streamlined, easy-to-use identity recognition before departure, during flight and upon arrival," read the corresponding press release.

The idea was seat-back cameras could facilitate onboard immigration, skipping lines when you land. It was also suggested that a seat-back camera could aid payment processing for onboard shopping.

At the 2017 Dubai Airshow, Panasonic Avionics announced the latest incarnation of Emirates' IFE in First Class and Economy-- specifying it featured a camera, plus a microphone and speaker.

In the age of the smartphone, everyone holds a tiny cinema in their hand, so there's certainly an expectation that airlines will have exciting entertainment options-- a screen simply showing movies won't cut it anymore.

But has Emirates ever done anything with its on-board cameras?

"Some of our 777 aircraft have cameras that came pre-installed with the inflight entertainment hardware that we had purchased from the manufacturer (Panasonic)," a spokeperson for the Dubai-based airline told CNN Travel. "It was originally meant for seat-to-seat video calls, however Emirates has never activated it."

This echoes Singapore Airlines' comment on the issue.

"These cameras have been intended by the manufacturers for future developments," the airline says. "These cameras are permanently disabled on our aircraft and cannot be activated on board. We have no plans to enable or develop any features using the cameras."

Meanwhile, American Airlines told CNN Travel that cameras are "a standard feature," but are not activated and the carrier has no plans to use them.

A spokesperson for Aussie carrier Qantas also told CNN Travel that IFE manufacturers include inbuilt cameras as standard-- and said the airline couldn't activate the cameras, even if they wanted to.

"The feature would require software in order to be activated, which Qantas doesn't have and doesn't plan to install."

Air New Zealand and British Airways told CNN Travel there were no cameras on board any of their aircraft.

Two images obtained by CNN Travel of an IFE system on a British Airways airplane depict what looks like a lens of some kind. BA describes it as an infrared environmental sensor rather than a camera.

But are airplane seat cameras a bad idea? Some aviation experts think they could improve the onboard, inflight experience.

Joe Leader, CEO of aviation trade body Airline Passenger Experience Association (APEX) think there's several handy usages for these cameras.

As well as facilitating video chat between passengers, the cameras could look out for passengers becoming unwell or monitor cabins for suspicious behavior.

The cameras could also be used to spot human trafficking or assault-- acting as an extension of the air steward's eyes.

As for the privacy concern, APEX points out the ubiquity of cameras in 21st century society.

"Today, airline passengers are typically tracked outside the aircraft dozens of times on a typical journey through stores, security, roadways, and airports by cameras without any permission," APEX says in a statement.

"In contrast, airlines only want to use cameras in the future with permission when technology has advanced to offer personalized service improvements that passengers desire."

Hacking fears, suggests APEX, are "misplaced."

"The greatest risk to airline passenger privacy breaches come from their own smartphones, tablets, cameras, computers, and smart devices used in private settings, " says APEX.

The concern for some fliers is that even if the existence of these seat-back cameras aren't a secret-- and even if they could facilitate some cool features-- it feels disingenuous that their presence isn't advertised.

When contacted by CNN Travel, Panasonic Avionics stressed that it was committed to the privacy of passengers.

"Panasonic Avionics will never activate any feature or functionality within an IFE system without explicit direction from an airline customer," the company said in a statement to CNN.

"Prior to the use of any camera on a Panasonic Avionics' system that would affect passenger privacy, Panasonic Avionics would work closely with its airline customer to educate passengers about how the system works and to certify compliance with all appropriate privacy laws and regulations, such as [The EU's data privacy regulation] GDPR."

But although Panasonic Avionics and the airlines say the cameras are currently deactivated-- they're not physically covered up and passengers remain worried about hacking.

These systems are expensive and they're not just there so they could be not used. The airlines should stop bullshitting their customers for a change. One consumer advocacy group pointed out that "Air travel is already fraught with ineffective and invasive breaches of our personal privacy. But now the airlines themselves have gone even further with cameras and microphones pointed at passengers as they watch movies, eat snacks, or just sleep. And the implications of in-flight cameras are even bigger than the discomfort of the airline watching you sleep on a red-eye. It’s still unknown to what extent the federal government could be able to acquire that data, without a warrant or probable cause, or process the camera footage through faulty facial recognition programs that misidentify women and people of color."

I'm old enough to remember when flying was a treat. That was a long, long, long time ago. Are you thinking I'm being too alarmist here? If so, take a look at this. "German Chancellor Angela Merkel has introduced a bill that would allow German spy agencies to hack into nearly any computer and conduct espionage on a wide swath of citizens and foreigners. Drawn up by Interior Minister Horst Seehofer, the bill greatly expands the espionage powers of Germany’s intelligence service, the bnd. Although Seehofer has been notorious for opposing the chancellor on many occasions, he seems to have persuaded her to support this latest bill. This time, opposition is coming from Merkel’s coalition ally, the Social Democratic Party (spd). The spd justice minister has expressed outrage at one clause in particular, which would allow spies to collect information on children under 14 years old. The justification for this clause rests on the 2016 case of a 12-year-old who was involved in a plot to bomb a Christmas market.

Many Germans are critical of the bill. “This amounts to a massive extension of intrusive surveillance,” said Sven Herpig, a researcher from the New Responsibility Foundation. Germany’s Left Party also condemned the bill, calling it a “catalogue of Orwellian fantasies.”

In the recent past, however, many similar “fantasies” have become reality.

In 2017, Germany proposed an “unprecedented spate of new surveillance and security laws.” Most of these were passed and are in force today, yet they are rarely discussed.

The biggest concern is currently the government’s State Trojan spyware law. This allows government spyware to be covertly installed on a target’s mobile phone. The spyware can lie dormant for a set period of time, remaining undetected for years, before being activated to collect data on the user’s calls, chats and Internet activity. And this isn’t limited to phones; the spyware can also be used to spy on people through smart devices, like speakers or fridges that can connect to the Internet, greatly infringing upon privacy rights.

Before the State Trojan law was passed, only the federal Criminal Office had the power to employ this method of espionage. Now this power is in the hands of the state itself.

The new law also grants permission for the bnd to use this spyware against foreigners. Both the Criminal Office and bnd have expressed a desire to “cooperate more effectively against ‘transnational’ threats, such as terrorism and organized crime.”

Airlines in Germany are bound to collect and retain the contact details of their passengers, means of booking, payment, and even seat choice, for up to five years. Although presented as an EU requirement, critics have said that this law goes well beyond what is required by Brussels.

Other laws passed in 2017 regulate increased video surveillance of public areas and more detailed research into the background of migrants, both of which came in the aftermath of the 2016 Christmas market terrorist attacks.

Last month, Senators Jeff Merkley (D-OR) and John Kennedy (R-LA) sent a joint letter to Delta, Southwest, Frontier, United, Spirit, American, JetBlue, and Alaska, noting their concern about a possible "serious breach of privacy."

While Americans have an expectation that they are monitored in airports as a necessary security measure, the notion that in-flight cameras may monitor passengers while they sleep, eat, or have private conversations is troubling. Further, in light of data breaches that have impacted many major airlines, we have misgivings that cameras or sensors may not employ the necessary security measures to prevent them from being targeted by cybercriminals.

For these reasons, we respectfully request that the following information be provided regarding the cameras on in-flight entertainment systems:

1- Does your airline currently use, or has ever used, cameras or sensors to monitor passengers;
2- If yes, what purpose do the cameras serve and in what circumstances may the cameras be activated;
3- If you have or currently do utilize cameras or sensors to monitor passengers, please provide details on how passengers are informed of this practice;
4- Please provide comprehensive data on the number of cameras and sensors used by your fleet, and the type of information that is collected or recorded, how it is stored, and who within your airline is responsible for the review and safekeeping of this information;
5- Further to the above, please confirm what security measures you have in place to prevent data breaches of this information, or hacking of the cameras themselves; and
6- Are the cameras used in any biometric identity capacity, and if so, under what authority?

We look forward to learning more about these practices and request a response within 30 days.

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New Report Finds Risks Associated With Maintaining Airlines Outside The U.S.

Roland and I travel a lot overseas, and sometimes we wind up on funky internal airlines in places like Mali, India, Vietnam, Morocco, Hungary, Argentina, Thailand... We pray to the maintenance gods that everything was done competently and tell ourselves that it was all done under U.S. or U.K. supervision, knowing full well that it wasn't and wondering about how many corners were cut. Today I got a memo from the Transport Workers Union of America (AFL-CIO) in DC. The title is above, The subtitle is no less assuring: Ridge Global Report Says Safety and Security Concerns of Commercial Aviation Better Addressed When Repair and Maintenance is Performed in the U.S. The report itself is called Risks Associated With Foreign Repair Stations.

Airline passengers may be less safe when the plane they are flying on has been repaired or maintained in a foreign country. That is among the conclusions of a risk-based report by Ridge Global, a firm founded by former Department of Homeland Security Secretary Tom Ridge on risks associated with the use of foreign repair stations by the U.S. airline industry.

The Transport Workers of America contracted with Gov. Ridge’s firm, Ridge Global, LLC, to assess the safety and security risks associated with foreign-based repair and overhaul facilities. The Transport Workers Union represents more than 140,000 workers in the airline, rail, subway, bus, utility and service industries.

Nearly 50-percent of maintenance work done by air carriers registered in the United States, including the major airlines, is conducted outside the United States. The facilities in foreign countries where commercial aircraft are repaired and maintained, however, are not as secure as those in the United States, the report states. Protections against unauthorized access are not as strong, and employee background checks are not as thorough, as those in the United States.

“Both conditions increase risks related to situations that could be more easily exploited by terrorists or individuals with harmful intent,” the Ridge Global report states.

“The Ridge Global Report exposes significant flaws in the mechanical maintenance practices of the United States airline industry,” TWU International President John Samuelsen, said. “Major air carriers’ lust for profits has driven them to fix planes on foreign soil, which has compromised the safety and security of America’s air travelers. It’s the dangerous dirty secret of America’s airlines, and the U.S. government must act to end this danger.”

“There are obvious disparities between domestic and foreign oversight and repair of commercial airlines,” said Gov. Ridge. “While there have thankfully been few U.S. aviation incidents in recent years, even one is too many, and so it is important travelers are aware how airplanes they fly on each day are maintained. Given the absence of direct oversight by the FAA and the differences described in our report, the qualifications of those responsible for oversight and those maintaining and repairing the aircraft in foreign countries cannot be viewed as meeting the same rigorous standards of inspection and repair as required in the U.S.”

The mechanics that do this critically important work at facilities located overseas, are not subject to the same intense scrutiny by government regulators, or held to the same high standards as mechanics in America, the report states.

One of the most significant disparities in terms of regulatory oversight deals with drug and alcohol testing requirements. Testing is mandated in the U.S. Employment and privacy laws in many foreign countries prevent such testing. Another contrast involves the inspection process itself. FAA domestic inspections can be random and without notice. That approach is prohibited in foreign countries.

“Foreign repair stations present risks that domestic ones do not,” the report further states. “These risks are due in part, to how laws and regulations are applied. We concluded that the safety and security concerns of commercial aviation are better addressed when the repair and maintenance is done in the United States.”

"Republican outsourcing in the Age of Trump" would have been another possible title, I guess. A tad too provocative, maybe?

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United Airlines' Woes Predate Oscar Munoz-- And You Can, At Least In Part, Blames Jimmy Carter

By the end of the week United was begging passengers not to abandon the much-hated airline. They promised, for example that they will no longer allow staff to take seats of boarded passengers and that they will no longer call law enforcement officials to remove passengers who do not pose immediate security threats. Still, I get the impression that Americans have had it with the Not So Friendly Skies and would like to see United go down hard. The company's stocked plummeted 2.5% last week and the damage to the brand is probably far greater than that. The tone-deaf company just announced that CEO Oscar Munoz’s annual bonus is around $13 million.

United Airlines CEO Oscar Munoz woke up Monday morning to a massive leadership test.

And he flunked-- big time.

Munoz had to respond to the shocking video footage of a passenger being violently ejected from one of his flights Sunday night. The video, shot by two passengers on their cellphones and shared on Twitter, went viral. The passenger was thrown off the plane simply because United had overbooked.

Munoz’s public response was a piece of pusillanimous lawyer-crafted claptrap that was pitiful, inadequate and insulting.

The incident was “upsetting to all of us here at United,” he said. He apologized “for having to re-accommodate these customers.” His “team” was conducting a “detailed review” to “further address and resolve this situation.”

Memo to Munoz: Are you kidding me?

Nobody cares if this was upsetting to the people at United. How about the upset to the paying customer-- apparently a middle-aged doctor-- who was dragged from your plane like this?

Nobody buys your insulting euphemism “re-accomodate.” You were throwing this guy off the plane, not for anything he did, but because you had deliberately sold more tickets than you had seats to make some extra bucks.

Despite the jaw-dropping p.r. blunder from United's team, the problem goes beyond that one company. Several years ago the Washington Monthly ran a story, Terminal Illiness about how deregulation was destroying the airline industry. Things have gotten much worse since then.

In 1978, however, a group of liberals including Ralph Nader, Ted Kennedy, Kennedy’s then Senate aide Stephen Breyer, and an economist named Alfred Kahn, whom President Jimmy Carter chose to run the CAB, conjured up a plan to drive down the cost of airline fares by fostering more price competition among airlines. Though they called it “deregulation,” the practical effect of eliminating the CAB [the Civil Aeronautics Board], especially after subsequent administrations abandoned antitrust enforcement as well, was to shift control of the airline industry from experts answerable to the public to corporate boardrooms and Wall Street.

Over the years, most Americans have adopted a pretty standard line about the results. On the one hand, complaining about the indignities of flying—overbooked, late, or canceled flights; surly flight attendants; and, more recently, terrible in-flight food service and high fees for checked baggage— has become a staple of American life, much like complaining about Internet providers or health insurance companies. On the other hand, we’ve told ourselves, at least the increased competition has made air travel cheaper. And at least most of us can still get where we need to go by air.

But now we find ourselves at a moment when nearly all the promises of the airline deregulators have clearly proved false. If you’re a member of the creative class who rarely does business in the nation’s industrial heartland or visits relatives there, you might not notice the magnitude of economic disruption being caused by lost airline service and skyrocketing fares. But if you are in the business of making and trading stuff beyond derivatives and concepts, you probably have to go to places like Cincinnati, Pittsburgh, Memphis, St. Louis, or Minneapolis, and you know firsthand how hard it has become to do business these days in such major heartland cities, which are increasingly cut off from each other and from the global economy.

And it’s about to get worse. Despite a wave of mergers that is fast concentrating control in the hands of three giant carriers, the industry remains essentially insolvent. Absent any coherent outcry, the directors of these private corporations remain free to respond to the crisis in the manner of an electrical utility company that, when it runs short of money, simply cuts off power to the neighborhoods of its own choosing.

...All these trends in the airline industry are bound to get much worse, and soon. Despite massive consolidation, steep cuts in wages and benefits, sharply rising fares, huge direct and indirect subsidies, and a slowly recovering economy, the industry remains unable to service its debt, and its executives—now serving at the whim of Wall Street-- see no way out except to continue to merge and to cut capacity. U.S. airlines lost money in all but three years between 2001 and 2010, according to the industry’s trade group, for a cumulative net loss of $62.9 billion. Even before the recent bankruptcy of American Airlines, the value of all publicly traded U.S. airline stocks amounted to only $32.3 billion, less than that of Starbucks.

That number would be even lower were it not for the major subsidies the industry has extracted from Congress. These include not just the billions spent by state and local governments to construct and maintain airports, and the $15 billion in loan guarantees the industry received in the aftermath of 9/11. They also include tens of billions in unfunded pension liabilities that major airlines have shoved onto taxpayers by declaring bankruptcy, as United and US Airways did in the last decade and American Airlines is trying to do now. If American succeeds in its plan to shed its pension debts onto the federal government’s Pension Benefit Guaranty Corporation, that alone would amount to a bailout of more than $10 billion. Other U.S. airlines continue to benefit from special provisions passed by Congress in 2007 that allow them to underfund their pension plans, so in the future taxpayers are likely to be paying even more of the cost of flying yesterday’s planes.

Yet even though these and other public subsidies dwarf those provided to Amtrak or General Motors, only one U.S. airline, Southwest, still has an investment-grade credit rating. Since 1978, almost all new start-ups have either failed or been absorbed (remember People Express, ValuJet, and Air Florida?) and only one, JetBlue, remains as a national competitor. Meanwhile, all six of the major “legacy” carriers that were still flying in 2011 have gone through bankruptcy. When the final numbers come in for last year, the U.S. industry as a whole will probably show some net income, but as of the third quarter of 2011 the margin was razor thin, and was mostly the result of rising fares and canceled service. Adjusted for growth of the economy, airline capacity is now at its lowest level since 1979, according to the trade group Airlines for America, and the industry has announced plans to cut another 1.5 percent of available seat miles in the first half of this year.

High fuel prices, to be sure, are a factor in this tale of woe. In 1999, fuel comprised 10 percent of an airline’s budget; now it ranges from 30 to 40 percent. But while high fuel costs make the price of providing short-haul service to sparsely populated areas higher than it has been in the past, they are not sufficient to explain the continuing deterioration of the airline industry. Nor can we blame the problem on the effects of the Great Recession. After decades in which the price of energy has risen and fallen and the economy has boomed and busted, the long-term trend is clear. The industry has been in turmoil and decline for more than thirty years, barely able to earn its cost of capital in the best of times and only then by cutting service and quality. It’s now evident that the industry’s problems are structural and deepening, as is the crisis faced by cities and industries that depend now more than ever on frequent, affordable air service to remain competitive in the global economy.

No doubt a few Wall Street tycoons and consulting firms have made billions merging and stripping down the airline industry over the last generation. But the fundamental problem is that the business model that airlines are left with doesn’t work for common shareholders, airline employees, or the American business community, much less the public.

One reason this business model doesn’t work is that it’s at odds with the basic physics of flying. It requires a tremendous amount of energy just to get a plane in the air. If the plane lands just a short time later, it’s hard to earn the fares necessary to cover the cost. This means the per-mile cost to the airlines of short-haul service is always going to be much higher than that of long-haul service, regardless of how the industry is organized. Yet the value of airline service to the public and the economy depends on providing connectivity to as many places as possible. Thus, without some form of cross-subsidization between short hauls and long hauls, the economic benefits of the network will be compromised. Fewer people will be flying to fewer places, which by itself hinders economic activity, while the high fixed cost of the remaining service has to be spread among a diminished number of passengers.

This highlights another problem that inevitably leads to declining service. It costs virtually the same to maintain an air traffic control tower, a runway, and ticketing and baggage-handling facilities whether an airport serves five or fifty flights a day, or whether each plane carries five or fifty passengers. So the per-passenger cost on low-volume routes is necessarily more than on high-volume routes, which again requires some form of cross-subsidization if robust connectivity is to be maintained.

Dealing with high fixed costs is a challenge common to virtually all networked industries, and in one way or another, America has grappled with the problem throughout the country’s history. The Founders understood that private enterprise could not by itself provide broadly distributed postal service because of the high cost of delivering mail to smaller towns and far-flung cities, and so they wrote into the Constitution that a government monopoly would take on the challenge, providing the necessary cross-subsidization.

Throughout most of the nineteenth century and much of the twentieth, generations of Americans similarly struggled with how to maintain an equitable and efficient railroad network, and for much the same reason. During various railroad bubbles, exuberant investors would build lines to the farthest corners of continent, much like start-up airlines in the 1980s. But over time, the high fixed cost of railroading and the basic economics of any networked industry left all but the core of the emerging system unprofitable before it received the benefits of government regulation. In the 1870s, railroads accounting for more than 30 percent of domestic mileage failed or fell into court-ordered receivership.

This was true even though most railroads maintained a near or total monopoly in most of the intermediate towns through which they ran. As Charles Francis Adams wrote in his 1878 book, Railroads: Their Origin and Problems:

Every local settlement and every secluded farmer saw other settlements and other farmers more fortunately placed, whose consequent prosperity seemed to make their own ruin a question of time. Place to place, or man to man, they might compete; but where the weight of the railroad was flung into one scale, it was strange indeed if the other did not kick the beam.

This was bad enough, but matters soon got worse. High fixed costs combined with ruinous competition in the early railroad industry created an overwhelming business incentive to consolidate and downsize, again much like what’s happening in the airline industry today. And consolidation in turn led to even more monopoly power-- not just over small and midsize communities but over large cities as well. By the 1880s, the fortunes of such major cities as Philadelphia, Baltimore, St. Louis, and Cincinnati rose and fell according to how various railroad financiers or “robber barons” combined and conspired to fix rates. Just as Americans scream today about the high cost of flying to a city like Cincinnati, where service is dominated by a single carrier, Americans of yesteryear faced impossible price discrimination when traveling or shipping to places dominated by a single railroad “trust” or “pool.”

This, more than any other factor, is what led previous generations of Americans to let go of the idea that government should have no role in regulating railroads and other emerging networked industries that were essential to the working of the economy as whole. “While the result of other ordinary competition was to reduce and equalize prices,” Adams noted, “that of railroad competition was to produce local inequalities and to arbitrarily raise and depress prices. The teachings of political economy were at fault.”

And indeed they were. The response was the creation of the Interstate Commerce Commission in 1887-- a move that most Americans viewed as essential to preserving free enterprise and their way of life. The ICC took on the task of moderating the price discrimination that railroads practiced, evening out the burden among different regions and classes of passengers and shippers in a way that allowed railroads to earn enough money to cover their fixed costs, improve their infrastructure, and give their investors a fair reward. In effect, the profits railroads earned on some highly trafficked long-haul routes came to be rechanneled by government policy to cover the cost of providing balanced and affordable service throughout the country. Railroads were regulated much as telephones and power companies came to be-- as natural monopolies that would be allowed to remain in private hands and earn a profit, but not at the cost of skewing the overall efficiency, balance, and fairness of American economy.

The process was messy and far from flawless. Striking the right balance required that Americans hash out what would today be called an “industrial policy,” and to do so in sometimes minute detail, such as setting the relative prices of shipping hogs verses hams from Dubuque to Chicago. But overall, government regulation of railroad pricing and routes worked better than letting a few financiers rule the system for their own private benefit. The country, after all, emerged as an industrial powerhouse during this period. Managing the structure and pricing of railroads was particularly essential to maintaining the competitiveness of small-scale entrepreneurs and of midsize manufacturing cities like Cincinnati or St. Louis. It wasn’t that the government picked winners or losers; rather, it prevented the machinations of railroad financiers from doing so.

Starting in 1938, the U.S. adopted much the same approach to the newly forming airline industry. Through the creation of the Civil Aeronautics Board, the government allowed the industry to become highly concentrated. Underpinning the legislation was a belief in a “public right of transit,” the idea that citizens were entitled to a reliable aviation system designed to meet their business and safety needs-- and the knowledge that unregulated competition would be unable to provide it.

As intended, the CAB nurtured the healthy maturation of a fledgling industry, forestalling ruinous competition and protecting airlines against bankruptcy. At the same time, airline fares fell dramatically, thanks largely to high levels of technological innovation, such as the introduction of the DC-8 and other mass-market jets. By the 1970s, the long-distance passenger train was dead, and jet travel had already helped to create a mass market for tourist destinations such as Disney World and the Caribbean. By 1977, 63 percent of Americans over eighteen had taken a trip on an airplane, up from 33 percent in 1962.

So why did Ted Kennedy and the Carter administration decide, over the strong objections of the airline unions and incumbent management at the time, that it was time to blow up government’s regulation of airlines? One reason was that the old regulatory regime had become highly litigious and rule bound. Kahn used to complain that his desk at the CAB was piled with papers demanding answers to trivial questions, such as “How many travel agents may a tour operator give free passage to inspect an all-inclusive tour? And must those agents then visit and inspect every one of the accommodations in the package?”

At the same time, many pointed to the example of Southwest Airlines, which got its start in 1971 by flying only within Texas, thereby escaping regulation by the CAB. Southwest’s success with discount fares particularly resonated with liberals at a time when inflation was liberalism’s greatest liability, and when the ascendant consumer movement made low prices a liberal imperative.

There were also ideological currents at work on the left that are little remembered today. Ralph Nader, for example, was popularizing the 1960s’ “New Left” notion that the New Deal regulatory state had been captured by incumbent industries, leading to what he called “corporate socialism.” Under the CAB, no new major airlines had emerged since the 1930s. Protected from competition, both airline management and unions had become overpaid and sclerotic at the expense of “the consumer,” Nader argued-- and never mind if workers in those industries and their unions were stalwart members of the Democratic coalition.

The Carter administration accepted this analysis and used it to justify deregulating not just airlines, but soon the railroad, trucking, and natural gas industries, while also taking the first steps toward rolling back banking regulation as well. That most managements in these industries resisted deregulation at the time only confirmed many liberals in their belief that deregulation was needed, and they told themselves that any trend toward monopoly would be checked by rigorous antitrust enforcement.

At first, the program-- which was, naturally, embraced by many free market economists and the incoming Reagan administration-- seemed to pay off. To be sure, many communities instantly lost air service, and the industry rapidly restructured into the hub-and-spoke system that still exists today, leading to the elimination of many direct flights. But the early years of the new regime also saw a burst of competition and price cutting in the airline industry.

What both policymakers and the public generally missed, however, was that any positive effects that occurred would be temporary, and that many of them would have occurred without deregulation. The price of energy, for example, cratered in the mid-1980s, making it possible to cut fares and even expand service on many short hauls. But that wasn’t an effect of deregulation; it was the result of a temporary world oil glut. Indeed, after adjusting for changes in energy prices, a 1990 study by the Economic Policy Institute concluded that airline fares fell more rapidly in the ten years before 1978 than they did during the subsequent decade.

A study published in the Journal of the Transportation Research Forum in 2007 confirms that the pattern continued. Except for a period after 9/11, when airlines deeply discounted fares to attract panicked customers, real air prices have fallen more slowly since the elimination of the CAB than before. This contrast becomes even starker if one considers the continuous decline in service quality, with more overbooked planes flying to fewer places, long waits in hub airports, the lost ability to make last-minute changes in itineraries without paying exorbitant fares, and the slow strangulation of heartland cities that don’t happen to be hubs. Moreover, most if not all of the post-deregulation price declines have been due to factors that cannot be repeated, such as the busting of airline unions, the termination of pension plans, the delayed replacement of aging aircraft, the elimination of complimentary meals and checked baggage, and, finally, the diminution of seat sizes and legroom to a point approaching the limits of human endurance. (Eliminating seats altogether, however, remains an option.)

Going forward, all industry forecasts call for further consolidation and continually rising fares and fees, accompanied by declining service on all but the most heavily trafficked routes. From time to time, short-term fare wars may break out on particular routes, particularly if foolish investors bring a start-up airline to town. Periodic dips in energy prices may bring a temporary reprieve. But over time, experience has shown that nearly all start-ups are eventually crushed by incumbent carriers, which in turn, despite their increasing consolidation, heavy public subsidies, and reductions in vital service to major cities, remain unable to earn even their cost of capital over time. Nobody wins except a few fast-trading financiers flying in private jets.

This result would hardly surprise Charles Francis Adams, Louis Brandeis, and many other great Americans who struggled in the late nineteenth and early twentieth centuries with how to harness the emergence of railroads, telephones, electrical power, and other networked industries to public purposes. They’d recognize the familiar boom-and-bust cycle of new entrants that occurred in the early period of airline deregulation and the subsequent trend toward consolidation, deteriorating service, and increasing price discrimination. What else would anyone who knows economic history expect of a natural monopoly that lacks the benefits of government regulation?

...That was the lesson previous generations learned from railroads; the current generation has to learn it all over again, from our experience with deregulated airlines. Why have we become so passive and reluctant to face up to the hard task of governing ourselves and our markets? We don’t need to recite “The Serenity Prayer.” We need to get out from under the thrall of the false prophets of deregulation, conservative and liberal alike, and make the benefits of true capitalism work for us once again.

In 2014 United's PAC paid out $189,500 in direct bribes to members of Congress-- mostly to Republicans, but plenty to Democrats will to play ball with them as well. The biggest pay-offs went to 3 especially transactional crooks, all notorious in Washington for taking money and selling their influence:

• Bill Shuster (R-PA)- $10,000
• Frank LoBiondo (R-NJ)- $10,000
• Cory Booker (D-NJ)- $10,000

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Greedy Airlines Found A Partner In Crime-- The Trump Regime Wants To Encourage More Rip-offs Of Passengers

A week or so ago, we took a quick look at how Trump's policies are hurting the American travel industry-- and how pissed off the travel industry is at him and his regime. It looks like it will be getting worse too. Thursday the EU Parliament passed a non-binding resolution calling for the reintroduction of visa requirements for American citizens, a little tit-for-tat over Washington refusing to give visa-free travel access to 5 EU nations (Bulgaria, Croatia, Cyprus, Poland and Romania).

In the vote on Thursday, the Parliament gave the European Commission two months to take legal measures to impose visas for American travelers to the European Union unless the Americans offered reciprocity to all citizens from the bloc.

European officials in Brussels have balked at making travel to Europe more difficult for Americans, saying doing so would have an economic cost and would most likely not even resolve the hurdles facing citizens of the five affected countries.

The Parliament’s measure was approved in a show of hands and was not expected to worsen the standoff with the United States. But in the event that the court in Luxembourg were to rule in favor of Parliament, the commission might be forced to impose visa requirements on Americans.

The Trump administration, finding itself in a tit-for-tat battle over access, would then almost certainly do the same for travelers from the European Union.

(It would probably be prudent for Trump to add Cyprus-- a shady Russian Mafia den of iniquity-- to his travel ban altogether. But that's not going to happen while the Trump kakistocracy is in power.)

Anyway-- back to the travel industry-- it looks like one segment of that industry-- the airlines-- are happy with Trump again. Elaine Chao (Mitch McConnell's beard wife) is the Secretary of Transportation and she's already starting to roll back regulations that protected the public from the runaway avarice and greed of the U.S. airlines. Travel Weekly posted about it Thursday. The Trumpists came down firmly on the side of the airlines when it comes to ripping off passengers with hidden fees for baggage, etc.

The Department of Transportation (DOT) on Thursday indefinitely suspended public comment on two proposed consumer-protection measures that the Obama administration put forward during its last months in office.

The DOT took the steps to "allow the president's appointees to review and consider this action," it said in Federal Register filings.

Last October, the DOT issued a request for information from consumer groups, airlines and other industry stakeholders to determine whether it should regulate the common airline practice of displaying only some content offerings through indirect channels, such as OTAs and GDSs, while displaying their full offerings on their own websites. In late December, the DOT extended that comment period to March 31 from its initial end date of Dec. 31. That comment period has now been suspended while the DOT reviews its merits.

The DOT has also suspended the final airline-related rulemaking process that was begun during the Obama administration. On Jan. 19, just three days before Obama left office, the DOT proposed a requirement that airlines and ticket agents (including travel agents) disclose fees for carry-on and checked bags from the beginning of a fare inquiry.

If enacted, the rule would mean that carriers couldn't show a ticket price on a web interface, then only later in the sales process show fees for baggage.

Public comment on that proposal had been scheduled to close on March 20.

...The trade group Travel Tech, which represents OTAs, travel search sites and GDSs, said Thursday that it is disappointed with both suspensions.

"Consumers deserve transparency in fare and schedule information and ancillary fees," Travel Tech president Steve Shur said in prepared remarks. "DOT must live up to its mandate on consumer protection and ensure consumers have access to all the information they need to make a purchasing decision."

President Trump has said reducing regulations will be a key policy goal of his administration.

Needless to say, the airline lobbyists were giddy with joy. Airlines for America President and CEO Nicholas E. Calio: "We applaud Secretary Chao’s leadership today and look forward to an era of smarter regulation that protects consumers from unfair practices, but does not step in when action is not warranted. Today’s action is a common sense measure reinforcing that the airline industry is capable of making the decisions that best serve our customers, our employees and the communities we serve."

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Are The U.S. Frequent Flyer Programs Operating Systemic Frauds? Just The Big Ones

The member of Congress who figures out a way to actually prevent telemarketers from bothering people-- if the Do Not Call list ever functioned, that's now a distant memory-- should get a bonus... or a Senate seat or a job as Vice President or something. I guess it's not as important as figuring out how to un-rig the system to lessen income inequality and institute Medicare For All but, let's face it, conservatives will never allow any of that so let's find something everyone can agree on-- like the death penalty for telemarketers. Or more accountable frequent flyer programs. Actually one member of Congress, did take some time to try to sort out the frequent flyer morass.

Florida Congressman Alan Grayson, a Member of the House Foreign Affairs Committee, is the most well-traveled Member of Congress. He serves on the Subcommittee on the Middle East and North Africa and on the Subcommittee on the Western Hemisphere. He's racked up something like ten million frequent flyer miles. So it shouldn't surprise anyone that he's paid attention to some of the shenanigans perpetrated by the airlines who systematically mislead consumers-- in 2011 when he started working on it, Delta was the worst-- and misrepresent their offerings to the public. That year Grayson introduced legislation to regulate the programs and keep the airlines from cheating the flying public. A crafty spokesperson for the airline industry trade organization claims that "Carriers are completely transparent regarding loyalty programs both on their websites and in direct communication with their customers." Do you know any travelers who would agree?

In the 33 years since American Airlines (AAL) launched the mileage craze with its AAdvantage program, frequent-flyer miles have become a critical revenue source for U.S. carriers. The airlines sell billions of dollars worth of miles each year to banks, retailers, and other marketers that use them to entice customers. Today, more miles are earned from credit cards and other loyalty programs than from actual flying. Millions of people who rarely fly are keenly attuned to boosting their mileage balances.

The top frustration of frequent-flyer program members is needing more miles than they expected for an award, followed by sudden rule changes, according to a survey of 1,600 miles collectors earlier this year by MileCards.com, a credit card comparison site.

...Grayson maintains that airline competition kept the programs relatively unchanged for mileage collectors throughout the 1980s and ’90s, with most award travel seats offered at starting rates of 25,000 miles. In recent years, especially as airlines have gone bankrupt and restructured, the carriers’ push for profitability has made the programs far less generous to consumers than they once were.

Irate members of Delta Air Lines’ (DAL) SkyMiles program began calling those miles “SkyPesos” several years ago, owing to difficult redemptions and their perceived lack of value. Delta has announced several changes for 2015, including offering more seats at lower mileage levels, to try to make SkyMiles more competitive with the programs at United Airlines (UAL) and American.

Next year, Delta and United will begin considering annual spending in their rewards calculation, not just the distances that travelers cover, so customers who spend more money will get more miles. Awards for most international business- and first-class seats on partners of the Big Three U.S. carriers have also soared within the past year. Those changes and others in recent years have caused many miles collectors to rethink the value of trying to amass miles for free airline travel.

Regardless of how much consumer irritation airline miles generate, the Transportation Department probably lacks a “leverage point” to delve too deeply into new regulations for the programs, says Tim Winship, editor of FrequentFlier.com. But he says the department will be able to push airlines to offer more advance notice of program changes that are negative for consumers.

Grayson says many of the recent program changes have been made with little or no warning, which often requires travelers to spend more miles for an award trip. American made such a change on June 1. “Announcing a program change today that takes effect today sticks in the craw of most consumers, and rightfully so,” Winship says. Eric Fraser, a miles collector and Phoenix attorney who specializes in federal regulatory issues, says the department is likely to be most interested in whether airlines properly notify program members of pending changes. “This is an area where the DOT sniffing around could just have an immediate benefit, even if they don’t start to write rules,” Fraser says.

Ideally, Grayson says, the airlines should be forced to give at least one year’s notice of major program changes and to offer at least one seat on every flight available at the lowest mileage level. “If you’re going to have a program like this at all, it’s got to be an honest program,” he says. “Every human being comes with a built-in cheat detector. They know when they’re being cheated; they know when they’re being deceived.”

This month the Wall Street Journal's annual best and worst frequent-flyer rewards programs for 2016 was released. They assert that "there's good news for frequent fliers: Airlines are slowly, cautiously increasing availability of hard-to-find frequent-flier award tickets."

Really? I wanted to fly to Paris. A few months ago I called the American Airlines Gold Desk and said I will fly any day, any time from any Southern California airport to any airport remotely near Paris. "Sorry, nothing is available," the operator replied. I stopped flying on American and switched my main credit card from Visa to American Express so I could accrue miles on a different airline. But even the business-friendly Journal admits there's bad news in the skies-- especially for Americans. "Much of the improvement is happening abroad and the largest frequent-flier program, from American Airlines, appears to have gotten stingier with loyalty benefits, according to an annual survey of award availability. The price of awards is going up, too.

[C]ustomers often find it difficult to use their miles at peak season and get frustrated when airlines force them into more expensive redemption levels. Delta Air Lines doesn’t even publish an award chart anymore-- prices fluctuate for awards much as ticket prices do. And even though the survey gauges availability on each airline’s busiest routes, where award seats should be easiest to find, nearly one of four queries showed no saver-level seats available.

Southwest Airlines and Air Berlin had seats available on every request. It was the fifth year Southwest has topped the survey at 100% availability. Value airlines like Southwest and JetBlue , which had seats available on 93% of booking queries, do well in the survey because they let customers earn points based on fare rather than distance. Then they let customers pay for any seat with either cash or points. The payback works out well for customers. Last year, 12% of Southwest’s passenger traffic was award travel.

American was among the stingiest of the 25 airlines surveyed, with saver-level seats available on only 56% of booking queries made. That was down from 67% in the 2015 survey, and put American ahead of only South America’s Avianca and LAN in terms of availability.

With skimpy redemption availability and award prices rising, American’s AAdvantage program is falling behind rivals in terms of value to customers, Mr. Sorensen says. “Their loyalty program needs attention,” he says.

American says AAdvantage program is keeping pace with competitors and last year the number of MileSAAver awards redeemed increased. “We made no changes to our approach to MileSAAver awards,” says Bridget Blaise-Shamai, American’s managing director of customer loyalty.

[Denial is a bad thing in the corporate world and I need to make sure I don't own any American Airline stock in my portfolio.]

At American, as at many airlines, award availability is largely controlled by the pricing department and what kind of demand for seats the airline estimates, so high demand can reduce the number of free seats available, she says.

United and Delta ended up with similar award availability in the lower half of the pack, even after a big jump this year at Delta.

Delta says it is trying to improve availability after several years near the bottom of the survey. Over the past year it had more than 10 sales on award tickets, discounting the number of miles needed, and marketed them aggressively to members via email and the airline’s website, says Karen Zachary, SkyMiles managing director. The airline has also opened up availability of saver-level seats earlier. Previously Delta held back more seats at lower redemption levels to see how fast seats were selling.

“We’re really committed to investing in the program and making it more rewarding,” she says.

Delta recently started letting members buy drinks with miles in airport clubs. A bottle of Dom Pérignon champagne costs 25,000. Beers and spirits range from 600 to 800 miles.

The number of miles redeemed at Delta in 2015 was up 5.4%, according to the company’s 10-K annual report, and the number of awards rose 6.4%. This indicates customers were taking advantage of some of the lower-priced awards Delta made available. Ms. Zachary says the pace is quickening: In the first quarter this year, Delta issued a record number of award tickets at 2.2 million, and the average redemption price was down 10%.

The survey made 7,000 booking queries in March asking for two seats for 280 trips at each airline on dates spread from June through October. The 10 busiest long routes and the 10 busiest medium-length routes for each airline were chosen, based on total seats offered for sale over a 12-month period.

As any traveler looking for tickets to Paris in July knows, availability is seasonal. Overall reward availability hit nearly 85% for trips in October, but only 63% in July. There has been some improvement since 2010, when the survey began. That year July availability was only 53%.

Mr. Sorensen says the survey found improved availability for long trips of 2,500 miles or more, often the prizes travelers most want for their miles. This year’s survey found saver-level seats on 61% of queries for long trips, up significantly from 54.5% last year and a much skimpier 43.9% in 2010. He notes that the prices of those saver awards have also increased over the past seven years, especially in the last couple of years at U.S. airlines.

At American, the number of miles issued in 2015 rose nearly 10%, according to the company’s 10-K filing. American had 853.6 billion award miles outstanding at Dec. 31, up 5.5% from a year earlier. The number of award redemptions rose, but accounted for only 6.5% of total passenger miles. By comparison, award travel, which includes upgrades, totaled 7.2% of passenger miles at Delta in 2015, 7.5% of passenger miles at United and 12% at Southwest, according to their annual 10-K filings. (A passenger mile is one customer flown one mile—the basic measure of traffic in the airline industry.)

The survey also looked at reward payback-- how much value you get for flying trips on an airline, exclusive of credit-card rewards and other ways to earn miles. For example, a $249 base fare trip on United would earn 1,247 miles in United’s MileagePlus program, which now gives nonelite program members 5 miles for every dollar spent. That means it would take 20 trips to earn a 25,000 saver-level award, so the payback for the traveler is 5%.

Elite status results in greater payback, since you earn more miles. Using miles for more expensive tickets, such as upgrades to first-class and international business-class tickets, can increase the payback. But at the basic level, Mr. Sorensen found JetBlue’s program had the richest payback at 7.9%, while American had the lowest at 3.1%. (This was based on the change American will make later this year to revenue-based mileage accrual instead of distance flown, following Delta and United.)

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"Have airlines cut service to the point that no one wants to fly anymore? Some travelers say yes" (Christopher Elliott, WaPo)

by Ken

The Q-and-A in the post title above, which comes from a recent piece in the Washington Post by Christopher Elliott ("consumer advocate, journalist and co-founder of the advocacy group Travelers United"), probably won't be of interest to readers unless: (a) they have flown before, or (b) they may ever be forced to fly again. In the piece, "Gripes about air travel have some people swearing off certain carriers," Christopher asks: "What’s your breaking point? When do you say 'That's it — I'm never flying again!'?"

This is, he adds, "no academic question for America’s airlines." The airlines, he says, "continue to provoke passengers with new fees, surcharges and rules. They want to know when passengers would rather stay home."

As another summer winds down, maybe they’re a little closer to finding an answer. Airline consumer complaints rose more than 20 percent for the first six months of the year, the Department of Transportation reported last week. From January to June 2015, the government received 9,542 consumer complaints, up from 7,935 received during the first six months of last year. DOT complaints typically represent a small fraction of total complaints.

At the same time, amid a government investigation into collusion, fare-watchers predict that air ticket prices will drop to record lows this fall because of lower fuel prices and, most important, decreased seasonal demand.

To put the question another way: "Have airlines gone too far? Have they cut service to the point that no one wants to fly anymore?"


THE LUGGAGE FIXATION

"Some travelers say yes" -- the airlines have gone too far.

Crystal Stranger, an accountant from Honolulu, reached her breaking point when United Airlines — which she describes as “the worst airline ever for traveling with small children” — first charged for her checked stroller and then dinged her for overweight baggage as well.

“We had to take all our bags apart and re-pack” for being a couple of pounds beyond the limit, she remembers. “We were still charged an overweight baggage fee.”

"Airlines are fixated on collecting more money for your luggage," Christopher says. "Last year, they pocketed more than $3.5 billion in fees, and this number is on the rise." But it turns out that United was only No. 2 in the baggage gouging derby, at a mere $652 million. The champion? Would anyone be surprised to learn that it's . . . Delta? Delta's haul: $863 million.


THE GENIUS IS IN HIDING THE FEES

And "the undisputed industry leader" at hiding the fees, says Christopher, is Spirit.

Taylor Murray recently booked a flight from Las Vegas to Denver on the discount carrier and was surprised at the airline’s fees, which seemed even more extreme than the ones you’d find on one of the major carriers.

For example, Spirit charges for carry-on bags, and if you want a reserved seat, you have to pay extra for it. For Murray, a sales manager for a Las Vegas call center software company, it felt like a bait-and-switch. He says Spirit offered a low fare but then added hidden fees.

“At the end of the day the price came out to be the same as a known-name airline,” he says.

"A recent survey," Christopher reports, "estimated that about 40 cents out of every dollar you spend on [Spirit] will be a surcharge." And just to prove that up is really down and left is really right, "In a recent ad campaign, Spirit claimed airlines that include items like checked bags or seat reservations in ticket prices are dishonest about their pricing."

This "dishonesty" apparently extends to airlines that, nefariously, will actually give you a cup of coffee, just like that -- the fiends. For some reason a fellow named Matt Foley was surprised when he asked for a cup of coffee on a Frontier flight from Washington to Denver and was asked for a credit card.

“A buck-ninety-nine for coffee?” he says. “Really? To charge for nonalcoholic drinks almost made me scream.”

BUT THEN, SOME PEOPLE ARE JUST CHRONIC COMPLAINERS

Take this whiny Foley fellow, who --

says he’s baffled by the way airlines gradually removed legroom and then tried to charge extra for it in an effort to profit. At some point, he figures, either the airlines will run out of things to charge for, or passengers will run out of things they’re willing to pay for. But for him, that time has already come. He refuses to fly Frontier no matter how low the fare.

Asking "Have we reached the limit?" Christopher notes that Frontier has "caved in to customers such as Foley" -- that is, assuming you would call this solution Frontier recently came up with a cave-in. "In August, [Frontier] began bundling several extras, including one checked bag, one carry-on, the 'best available' seat and no fee for changing the ticket later, into a package it calls 'the Works.' " Why, this is practically philanthropy! (Matt Foley has probably noticed that "the Works" doesn't include the cup of coffee. Maybe Frontier will add a "Works Plus" package that includes the coffee -- but probably no more legroom.)

One reason the game continues, it seems, is that "passengers keep buying low fares." Says Spencer Carlson ("who runs a travel company in Kansas City, Mo."), "Most travelers take the cheapest fares and are then disappointed when they do the traveling." But, he adds, "Some airlines are figuring out this threshold."

"Seems the question isn’t whether airlines have gone too far," Christopher says. "They have, and they know it. It's more a question of which direction they've done it in. In an effort to eke out a little extra profit, are they more willing to anger their customers or their employees?"


YEAH, SCREW THE EMPLOYEES!

Although Christopher doesn't go into it, I think it's safe to say that we could have gotten a whole other report on the many ways in which the airlines are squeezing money out of the hides of their employees. If you know anyone who works (or worked) for one, you've undoubtedly heard a smattering of the horror stories.

Instead, Christopher merely offers us this curious case. I hope he doesn't mean us to be inspired by this sort of counter-example offered by Spencer Carlson, the Kansas City travel guy.

Norwegian Air, a low-cost European carrier, offers one-way tickets from New York to Oslo at about $180 but has still figured out how to exceed expectations. Yes, it was extra for luggage, but Norwegian didn’t charge for in-flight movies, the food was good and the seats were comfortable, Carlson says. “I was blown away at the professionalism of the staff and the cleanliness of the aircraft. The overall experience was fantastic.”

Norwegian is an interesting example, because American carriers have been trying to stop it from operating in the United States. The reason? Instead of cutting back service, Norwegian found creative ways around high labor costs. Instead of using European or American flight crews, for example, it reportedly hires Bangkok-based crews through a Singapore employment agency who are governed by Singapore labor law.

Because having to pay flight crews a living wage is what's driving the cost of flying so high. Do you suppose Singapore labor law has anything to say about high-level execs having to make do with a few dollars less? (And as a matter of fact, yes, it is dollars, even in Singapore, where the Singapore dollar is the actual currency. I looked it up.)

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Yes, The Airlines WANT You To Suffer-- And Make Sure You Do

Airlines are making tremendous profits by selling their customers misery

Friday, The New Yorker ran a piece by Tim Wu, Why Airlines Want To Make You Suffer. It's not a comedy piece. Like us, he was disgusted with Jet Blue going over to the anti-customer dark side, lamenting now the airline had previously "distinguished itself by providing decent, fee-free service for everyone, an approach that seemed to be working: passengers liked the airline, and it made a consistent profit. Wall Street analysts, however, accused JetBlue of being “overly brand-conscious and customer-focussed.” In November, the airline, under new management, announced that it would follow United, Delta, and the other major carriers by cramming more seats into economy, shrinking leg room, and charging a range of new fees for things like bags and WiFi."

It seems that the money was just too good to resist. In 2013, the major airlines combined made about $31.5 billion in income from fees, as well as other ancillaries, such as redeeming credit-card points. United pulled in more than $5.7 billion in fees and other ancillary income in 2013, while Delta scored more than $2.5 billion. That’s income derived in large part from services, such as baggage carriage, that were once included in ticket prices. Today, as anyone who travels knows well, you can pay fees ranging from forty dollars to three hundred dollars for things like boarding in a “fast lane,” sitting in slightly better economy-class seats, bringing along the family dog, or sending an unaccompanied minor on a plane. Loyal fliers, or people willing to pay a giant annual fee, can avoid some of these charges; others are unavoidable.

...If fees are great for airlines, what about for us? Does it make any difference if an airline collects its cash in fees as opposed to through ticket sales? The airlines, and some economists, argue that the rise of the fee model is good for travellers. You only pay for what you want, and you can therefore save money if you, for instance, don’t mind sitting in middle seats in the back, waiting in line to board, or bringing your own food. That’s why American Airlines calls its fees program “Your Choice” and suggests that it makes the “travel experience even more convenient, cost-effective, flexible and personalized.”

But the fee model comes with systematic costs that are not immediately obvious. Here’s the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery.” Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that’s where the suffering begins.

The necessity of degrading basic service provides a partial explanation for the fact that, in the past decade, the major airlines have done what they can to make flying basic economy, particularly on longer flights, an intolerable experience. For one thing, as the Wall Street Journal has documented, airlines have crammed more seats into the basic economy section of the airplane, even on long-haul flights. The seats, meanwhile, have gotten smaller-- they are narrower and set closer together. Bill McGee, a contributing editor to Consumer Reports who worked in the airline industry for many years, studied seat sizes and summarized his findings this way: “The roomiest economy seats you can book on the nation’s four largest airlines are narrower than the tightest economy seats offered in the 1990s.”

Boarding for non-élite flyers has also become a miserable experience. There are far more efficient ways to load planes than the current back-to-front method, which is actually slower than random boarding. The process takes longer still thanks to the practice of letting flyers with status board out of turn and thanks to luggage charges, which compel fee-avoiders to cram their bags into overhead compartments. Airlines lack a real incentive to fundamentally improve boarding for everyone-- by, for example, investing in methods such as filling both ends of an airplane at once. It would make life better and also defeat the status racket."

And Tim was just talking about America, where airlines at least make some token gesture to concepts of vestigial democracy. Imagine what it's like in a traditionally authoritarian or feudal society like South Korea. In fact, don't imagine. Earlier today DWT carried an apocryphal post about KAL and feudalism in the 21st Centuries skies.

Too big to fire

My favorite part of the on-going Korean Air scandal is how it exposed the relationship between the plutocracy and the working class. First, meet Cho Hyun-ah, an heiress-- daughter of Korean Air chairman Cho Yang-ho. Part of her patrimony, apparently is an executive vice presidency at the airline-- and an attitude towards the little people that would make Leona Helmsley blush. As for her very own little people, Cho flew to Hawaii last May to give birth to twin sons so that they would have U.S. citizenship-- something wealthy South Koreans like to do... just in case something goes wrong (and so that they kids don't have to serve in the Korean military).

OK, first the facts in the more recent scandal that has led to Cho be fired by her embarrassed father. She was flying-- first class, of course-- from JFK back to Korea on December 5. She flipped out when a flight attendant handed her macadamia nuts in a bag instead of in a bowl. People in first class get their macadamias in bowls, while the peasants get their bags of peanuts in bags. She went nuts! She summoned the senior steward in charge and demanded an explanation, which didn't satisfy her. So she ordered the plane back to the gate so the flight attendant could be thrown off the plane. And the plane's captain obeyed! Ah... the power and arrogance of Korea's chaebol (family-run mega-conglomerates). Cho's family is especially hated in Korea, and Hanjin, the parent company of Korean Air, got its start serving the U.S. military in the 1940s. Several years ago, Cho's brother, Won-Tae Cho, another spoiled brat and another executive vice-president of the airline and other Hanjin subsidiaries, was investigated by police for shoving an elderly woman who confronted him about his reckless driving. Earlier the patriarch himself, who is a well-known crook, was convicted, along with his own father brother, of tax evasion.

The abused flight attendant who was attacked and berated by an airline executive when he failed to serve her nuts in a bowl on a flight from New York to South Korea is sharing his story.

Screaming Cho Hyun-ah, a senior vice-president at the airline and daughter of the airline's chairman, angrily demanded the removal of the crew member, Park Chang-jin, from the flight when he gave her macadamia nuts in a bag.

She then forced the Incheon-bound flight to taxi back to the terminal at New York's JFK Airport to kick the junior flight attendant off the plane.

Now, Chang-jin has revealed that several officials from Korean Air asked him to deny the incident ever happened.

'People who haven't experienced will not understand that feeling of being insulted and shamed,' Chang-jin told a South Korean television station on Friday.

He said after being berated by  Hyun-ah, he and a fellow flight attendant actually dropped to their knees in front of the woman begging for forgiveness, this as she 'poked the back of his hand with a corner of the flight manual book several times.'

Because she is the daughter of the chairman, he says he had no choice but to follow her orders, returning the plane and deboarding, taking a separate flight home.

  When he got home however, 'five to six officials from Korean Air came to visit his home every day and asked him to give a false account to authorities of what happened.'

What's more, they 'asked him to tell investigators that Cho did not use abusive language and that he voluntarily got off the plane.'

There was talk about Cho being arrested and the family firm did all it could to paper over the whole incident and contain the damage. The Straits Times was eager to give their side of the story.

While it is easy to write her off as another hoity-toity power-abusing chaebol heiress, the hotel management-trained Ms Cho undertook initiatives to improve Korean Air, which she joined in 1999.

Under her charge, the airline had a major image overhaul, complete with new uniforms, redesigned cabin interiors and improved inflight service and duty-free offerings. In 2005, it achieved US$158 million (S$207 million) in duty-free sales, reportedly the highest-ever by any airline at that time.

This figure is expected to hit US$190 million this year, according to travel retail magazine The Moodie Report, which described Ms Cho as a "highly driven individual by her own admission" in a 2006 interview.

Ms Cho was also credited with revamping the inflight magazine and giving it a much-needed feminine touch. She also spent three years convincing La Mer to join the airline's duty-free offerings-- a first for the luxury skincare brand.

"I try to be an ambassador to introduce new and great brands to Koreans who travel," she told Moodie Report.

Cho hasn't been arrested yet but... that could actually happen. A transport ministry official has been arrested for helping with the family coverup. I'm sure he assumed that was part of his job. He's in jail now. The relationship between government functionaries and the families that run the chaebols is, at best, unhealthy and the Cho incident is an opportunity for reform groups to shed light on the sleaze that permeates the whole system.

A local civic group asked the prosecution Friday to look into suspicions that government officials got free upgrades from the country's top airline, Korean Air Lines Co., which is at the center of controversy over an air-rage incident.

...The civic group's move came after allegations surfaced that several ranking transportation ministry officials were bumped up to business class regularly for free.

"Such allegations could be interpreted as bribery," People's Solidarity for Participatory Democracy said in a press release, adding that Korean Air executives suspected of giving such privileges to ministry officials could face breach of trust charges.

The ministry said it will launch an internal inspection into the mounting allegations and will take appropriate disciplinary measures against those who received free upgrades.

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