Monday, April 24, 2017

OPINION: Foreign carriers should be allowed to serve US cities

With two incidents of scuffles and kerfuffles aboard two different U.S. airlines in less than two weeks, there are increasing calls for significant changes in the country's airline industry. Some are calling for re-regulation while others are promoting a more radical, or more progressive, idea: opening U.S. skies to foreign carriers.

The two incidents, which both went viral after being recorded by the airlines' passengers, include a passenger who was forcibly removed from a United Airlines (NYSE:UAL) flight on April 9 after refusing to give up his seat, and an incident aboard American Airlines (NASDAQ:AAL) Flight 591 from San Francisco International (SFO) to Dallas-Ft. Worth (DFW) on April 21.

AA flight attendant confronts passenger
In the most recent incident, a flight attendant took a stroller from a mother of twins (forcibly, or not, depending on whose version of events you believe) and in the process, struck the mother and narrowly missed one of her children.

Upsetting, of course, but it might have been explained away by the cramped quarters inside an airplane coupled with clumsiness. Until … a passenger demanded to know the name of the male flight attendant involved, who then dared the passenger to hit him.

American has since removed the flight attendant from duty while it investigates. "We have seen the video and have already started an investigation to obtain the facts,” the carrier said. “What we see on this video does not reflect our values or how we care for our customers."

But apologies and investigations clearly are not enough to get airlines like United and American to change their culture in any meaningful way and start providing the service their passengers expect.

Others and I have said for some time that the government needs to re-regulate U.S. airlines. But some are going much farther, and one organization is asking President Trump to open U.S. skies and allow non-U.S. airlines to carry passengers between U.S. cities.

The Business Travel Coalition (BTC) sent the president an open letter on Saturday, the day after the American Airlines incident, calling on him to treat the airlines like the auto industry and make them compete with foreign airlines in our domestic markets.

“Allowing foreign airlines to carry passengers between U.S. cities would add sorely needed competition and would stimulate regional economies creating jobs,” the BTC said. “Just as foreign competition forced the automakers to increase efficiency, quality and innovation, so too would the airlines have to reinvent their cultures and up their performance to the benefit of customers. No more broken noses, no more flight attendant challenges to fight customers.”

The BTC called the prohibition on non-U.S. carriers transporting passengers between U.S. cities, “A 70-year old obsolete, anti-consumer policy.”

The group isn't alone in its thinking. Following the approval of the American Airlines/US Airways merger, travel writer Christopher Elliott also called for the opening of U.S. skies in an article in USA Today. In it, he quotes many travelers who would also like to have more, and better, choices.

Equating the airline industry to the auto industry provides a valid comparison. We have the Big 3 automakers – Ford, Chevrolet and Chrysler – and a few other, smaller companies like Tesla. Suppose for the moment that only cars from U.S. car makers were allowed on U.S. roads. How different the world would be and, I submit, not for the better.

Today, we have a global economy. Allowing the likes of Emirates, Virgin Atlantic, Lufthansa, etc., to transport passengers between U.S. cities might indeed hasten the return of “The Friendly Skies.”

The following is the complete text of the BTC’s letter to President Trump and copied to Vice President Mike Pence, Secretary of Commerce Wilbur Ross, Secretary of Transportation Elaine Chao, Secretary of State Rex Tillerson, the members of the House and Senate, and other senior administration officials.
Dear Mr. President,

Last week’s shocking mother of all customer service implosions at United Airlines was repeated on American Airlines yesterday. “Hit me, bring it on,” said an aggressive American Airlines flight attendant challenging a customer to a fight for intervening on behalf of a crying mother with twin babies. A witness posted to Facebook: “OMG! AA Flight attendant violently took a stroller from a lady with her baby on my flight, hitting her and just missing the baby. Then he tried to fight a passenger who stood up for her. AA591 from SFO to DFW. What’s going on with these American Carriers????” The mother and her children were escorted off the flight. The airline suspended its worker.

Disciplining an employee for not complying with an airline’s “values,” opening an investigation, broadcasting new procedures or announcing additional training is just crisis management public relations spin and does zero to address the root cause of the problem, which is a decades-in-the-making rotten culture. It’s not just United Airlines and American Airlines; it’s all three U.S. network carriers (Big 3). Their arrogance and distain for the customer knows no bounds. Without question, U.S. consumers are caught up in an increasingly failed market. The arrogant attitude of the Big 3 – what are you going to do about it, you no longer have meaningful competitive alternatives to us – sadly is today’s reality.

Mr. President, can you imagine the following incident at Trump International Hotel in Washington. A young mother having checked in after an exhausting international trip with her twin babies is told by your front desk attendant that she can store her stroller in the baggage storage room or in her guestroom, if there is space. Your guest heads around the front desk toward the elevator and your concierge confronts her and violently rips the stroller from her, and in doing so, hits her in the head, barely misses one of the babies and reduces her to tears. And, when a gallant guest tries to intercede on the crying mother’s behalf, your employee challenges him to a fight to the horror of other guests in your lobby. Would your company culture, ever in a million years, allow that to happen? Of course not!

Those of us who testified in Congress against the recent mega airline mergers predicted the most pernicious effects on communities and consumers from those combinations. However, no one anticipated that their newly bolstered market, economic and political powers would be used to undermine U.S. Department of Transportation consumer protections, ignore their most valued corporate customers’ concerns or demand that the U.S. Government rewrite its Open Skies policy for their exclusive benefit. Since the Big 3 secured their antitrust immunities for their global alliances, and massively consolidated the industry, their near-singular focus has not been on building customer-centric cultures and improving their products and customer service, but rather, on seeking U.S. Government protection from domestic and foreign competition.

In the aftermath of the United Airlines fiasco, I suggested to you and your senior advisors that a reversal of the grave decline in respect for airline customers would require stronger consumer protections, the restoration of the right of consumers to sue airlines for unfair and deceptive practices and increased domestic and foreign airline competition. The Big 3 neither can, want nor will change their bankrupt cultures on their own. Perhaps given that, and Big 3 demands that the U.S. Government protect them from Gulf carrier, and other airline competition, it is time to consider going big with major structural reforms to a failing marketplace. Mr. President, you are not without options.

The first option is to undo some of these airline mergers and restore at least some level of competition. However, these now combined airlines are deeply integrated and any such government policy decision would be tied up for years in court. Consumers need relief sooner rather than later. An alternative is to eliminate a 70-year old obsolete, anti-consumer policy and treat the airlines like the auto industry making them compete with foreign airlines in our domestic markets.

Allowing foreign airlines to carry passengers between U.S. cities would add sorely needed competition and would stimulate regional economies creating jobs. Just as foreign competition forced the automakers to increase efficiency, quality and innovation, so too would the airlines have to reinvent their cultures and up their performance to the benefit of customers. No more broken noses, no more flight attendant challenges to fight customers.

Mr. President, an intervention is needed; you alone can fix this.

Thank you for all that you do in support of American jobs, robust competition and the consumer.

Sincerely,

Kevin Mitchell
Founder, Business Travel Coalition
Opening U.S. skies to non-U.S. carriers would not happen overnight and would not be simple. It would likely require the renegotiation of international treaties to allow U.S. carriers similar privileges in other countries. But something clearly needs to be done, and sooner rather than later. This move is definitely something worth considering.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



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