United CEO Blames Travel Chaos On Lack Of Government Support For Airlines. Wait, Wut?

My eyes nearly bulged out of my head reading the Business Insider headline,

United Airlines CEO says a lack of support from the government to the aviation industry is partly to blame for travel chaos, report says

Lack of government support, is he insane?

  • It started with $25 billion in direct cash to airlines and $25 billion in subsidies loans from the CARES Act
  • And there were two more rounds of direct cash injections totaling $29 billion
  • Not to mention tax relief and cash to airports and airline contractors

It turns out what he’s really saying isn’t that government didn’t give airlines cash – it did, duh! – but that government hasn’t poured enough cash into the infrastructure that supports the industry.

“Frankly, the bigger challenges are not the airlines themselves, they’re all the support infrastructure around aviation that hasn’t caught up as quickly.”

“When the FAA says you can’t land airplanes at the airport, you’re going to have delays and cancellations,”

Unlike in much of the rest of the world, airports are usually owned by governments. Security isn’t just regulated by government but usually performed by government. And air traffic control is directly provided by the government.

Of course unlike at the airlines, governments generally didn’t do furloughs during the pandemic (airlines used government cash to keep people employed to fund early retirement offers that reduced employment).

There have been staffing issues at TSA and in air traffic control, and these have made travel less pleasant. Airlines themselves code the reasons for delays and cancellations and air traffic control hasn’t been a primary driver. In fact, Scott Kirby found himself apologizing to Transportation Secretary Pete Buttigieg because his claims were baseless (and because it’s import to grovel before the Secretary of Transportation when you run a heavily regulated and subsidized airline).

While Buttigieg has blasted airlines for poor performance in media, he also hasn’t done anything about it, and has only complained about their lack of operational statistics compared to pre-pandemic – accepting the level of service airlines were providing them as somehow good enough.

Airlines let too many people go during the pandemic (over 30% at Delta!) while taking billions in taxpyeyr cash explicitly not to do so. They didn’t have the people to scale up their service when demand returned, even though the point of the subsidies was so that they would. And they lost a lot of context, culture, and knowledge of how to run an airline in the process.

But Kirby wants more taxpayer money for aviation infrastructure because that’s a subsidy to United. So much for the days just a few years ago when United Airlines, along with Delta and American, pretended to be against subsidies – when in truth they were just looking for the subsidy of protection from competition from Emirates, Etihad and Qatar – higher prices and less choice for customers.

When Scott Kirby criticizes the government what he wants is more government. And specifically, more government that benefits him and his airline. He doesn’t ask, is NavCanada a more efficient model for U.S. air traffic control?

  • The independent non-profit doesn’t just handle Canadian domestic flights, but traffic across the North Atlantic
  • It does so more efficiently and at generally lower cost
  • And more importantly isn’t subject to the annual appropriations cycle of the government for financing technology upgrades… they can borrow and make capital investments, in contrast to the U.S. which is finally ridding itself of paper flight strips.

It’s absolutely time to improve airports (my home airport in Austin shouldn’t be governed by the City Council if it has any hope to serve the growing community); air traffic control (spin off the function to better invest in technology); and airport security (we’re safer when the entity performing the security function isn’t its own regulator). But the answer to all of this isn’t more taxpayer subsidies, and the blame for airline poor performance falls on the airlines themselves.

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