Category AVIATION &ТНЕ ROLE OF GOVERNMENT

As we saw in Chapter 26, computer reservation systems were developed independently by United States airlines starting in the 1950s, beginning with American Airlines’ SABRE, followed by United Airlines’ APOLLO, TWA’s PARS, Delta Airlines’ DATAS II, and Eastern’s System One. By 1988, these same five systems were in use in the United States and were also in common use by travel agents.

These proprietary systems had preferences built into them that favored the owning airline, created competitive disadvantages for airlines that did not possess these systems, and presented distorted options to travel agents. Travel agents typically used only one CRS, usually the one owned by the largest, closest airline to the travel agent’s city, so that the travel agent naturally pre­ferred that airline’s offerings. The agent would also typically have an incentive contract with that airline. In 1984, the CAB adopted rules to insure fair competition among all airlines.

As computer reservation systems became diversified internationally, the CRS acronym yielded to the more accurate GDS, represent­ing the “global distribution system.” By the mid 1990s, U. S. airline owners had divested them­selves of ownership in the domestic GDS sys­tems, which by 2003 were dominated by SABRE (43 percent), Galileo (formerly APOLLO, 20 percent), and Worldspan (formerly PARS and DATAS II, 29 percent). These GDS compa­nies accounted for 92 percent of all U. S. airline bookings.13

While U. S. airlines continue to use GDS booking services with accompanying fees, at the same time they began creating Internet applica­tions, including their own websites, and the large airlines have also created their own travel tech­nology companies, such as Orbitz. Southwest and some of the low-cost carriers do not participate in the global distribution system and rely instead on their own websites for information distribution, reservations, and ticket sales.

a The Internet

The appearance and growth of the Internet has generally contributed to a leveling of the com­petitive playing field in airline advertising and bookings, primarily because the consumer is the active, originating participant who searches out the desired information on the Internet. This access has been facilitated by the airlines revising their company access outlets to provide user-friendly websites available to travelers on a 24/7 basis right in their own home or office.

The aftermath of September 11, 2001 and the resulting economic downturn saw a signifi­cant increase in the use of the Internet by both business and leisure travellers for making travel arrangements directly with the airlines. This also had the effect of countering some of the incumbents’ economies of scale and CRS/GDS advantages.

The Internet is also not a one-way street. It has provided consumers with a way to provide undesirable feedback, not only to the airlines, but also to the world of travelers out there. One example was the passenger who had his Tay­lor guitar trashed by some gorilla bag handlers at United in Chicago. When United apparently chose to ignore the problem, this guitar man wrote a very uncomplimentary description of the affair in a song entitled “United Breaks Guitars” and posted it on the Internet. At last count it had over 12 million hits.

4. 49 USC sec. 41714.

5. Market-Based Alternatives for Managing Congestion at New York’s LaGuardia Airport, Michael 0. Ball, University of Maryland.

6. Nextor is a consortium of government, academic, and industry representatives dedicated to the advancement of aviation research and technology and is sponsored by the FAA. The eight universities associated with Nex­tor are George Mason University, Massachusetts Insti­tute of Technology, University of California at Berkeley, University of Maryland at College Park, Virginia Poly­technic Institute and State University, Georgia Institute of Technology, Purdue University, and The Ohio State University

7. The FAA had determined that large carriers who control almost all slots at LGA are using the airport to serve their medium and large hubs, and that the average size aircraft operated into the airport has shrunk to 98 seats.

8. For a full discussion of the proposal applicable to LGA, see Congestion Management Rule for LaGuardia Airport, Docket No. FAA-2006-25709, RIN 2120-A170, April 16, 2008. The proposed rules were considered in two separate dockets, one for JFK and EWR, and one for LGA.

9. Long Beach, CA (LGB) and John Wayne Orange County (SNA) are slot-controlled under local airport authority.

10. General Accounting Office Report, Airline Competition: Higher Fares and Reduced Competition at Concentrated Airports, (GA)/RCED-90-102, July 1990.

11. The LGA perimeter rule was first established in the late 1950s under an informal arrangement between the Port Authority and the airlines. It was formalized in 1984 and unsuccessfully challenged in Western Airlines v. Port Authority of New York and New Jersey, 658 F. Supp. 952 (SDNY 1986), aff’d 817 F2d 222 (2nd Cir., 1987, cert, denied, 485 U. S. 1006 (1988).

AIR-21 in 2000 and Vision 100-Century of Aviation Reau­thorization Act in 2003.

Europe-based GDS companies, like Amadeus, are not included in the discussion of domestic airline ownership.

Airport-controlled or common-use arrangements are completely under the control of the airport authority. The airport may assign gate and facil­ity usage on a temporary, per-turn basis or for a short-term duration. These types of arrangements have been popular in Europe and other foreign regions for some time. The concept has gained popularity to the point that it has acquired the acronym C. U.T. E., or Common Use Terminal Equipment, to describe what is being increas­ingly seen as the best way for an airport to orga­nize its gates and check-in counter facilities.

The International Air Transport Association (IATA) has even issued a recommendation (No. 1797) favoring common-use systems as a means of efficient and cooperative use of available ter­minal facilities worldwide.

Various proprietary contractors have devel­oped expertise in assisting airports in setting up these common-use arrangements so that, rather than being blocked off, the available facilities can be distributed as needed to different airlines. These facilities include check-in counters, gates, holding rooms, and electronic equipment. The systems control and integrate all components necessary to the carrier, including computers, displays, and boarding pass printers and readers.

Two airports have all airport-controlled gates—Miami International with 121 gates and Phoenix Sky Harbor with 84.

■ DOT Interest in Airport

Praetices-Unfair Competition

Prior to 2001, the Department of Transporta­tion’s authority over the gate practices of com­mercial-service airports was severely limited.6 While the DOT had jurisdiction over the gate practices of airlines, constitutional principles pre­vented interference in policies and practices of state-owned airports.

With the passage of the Wendell H. Ford Aviation Investment and Reform Act for 21st Century (AIR-21) in 2001, the DOT was given authority to require certain large and medium hub airports to submit competition plans as a condi­tion of receiving federal grant monies and as a condition for authority to impose PFCs at their airports. These airports (including those at which competition among the airlines was threatened by airline domination, gate control, and other anti­competitive practices) were required to provide the DOT detailed information concerning their gate practices. The DOT has used its authority to approve or disapprove these competition plans as a means to insure that gate practices at those airports are fair. This includes insuring broader access to gates by new entrant airlines.

Airline gate practices continue to be moni­tored by the DOT to insure that airline control of gates does not unduly impede competition. This authority can compel an airline to surrender con­trol of airport gates, or prevent tying arrangements involving subleases by one airline to another, where, for example, the lease requires the use of the lessor airlines’ ground forces by the lessee airline. So too may the DOT apply its authority to situations where an airline, with market power, exercises its contractual rights under a Mil clause to block the construction of facilities for competi­tors merely to maintain its own monopoly power.

Congress passed the Homeland Security Act in November 2002, creating a new department in the executive branch at the cabinet level known as the Department of Homeland Security (DHS). The primary missions of the Department are preventing terrorist attacks in the United States, reducing the country’s vulnerability to terrorism, and minimiz­ing damage in the event such attacks occur. Specif­ically, the scope of DHS activities includes border security, intelligence collection and analysis, emer­gency preparedness and response, and detection of chemical, biological, and radiological threats.

This statute combined over 22 existing fed­eral agencies previously scattered throughout the government into one cohesive organization. DHS includes not only the TSA, but also U. S. Cus­toms and Border Protection (CBT), the Federal Emergency Management Agency (FEMA), U. S. Immigration and Customs Enforcement (ICE), the Secret Service, the U. S. National Guard, and the U. S. Coast Guard. Some agencies and depart­ments involved in national security that are not in DHS include the FBI, the CIA, and the Depart­ment of Defense.

The Act provides for the training of air car­rier pilots in the use of firearms to be carried in the cockpit. In April 2003, the first 44 airline pilots certified as Federal Flight Deck Officers were graduated from the Federal Law Enforce­ment Center in Glynco, Georgia.

Third-party liability insurance (insurance to cover airlines for losses of those airlines to third parties, such as passengers, persons on the ground, and others) ordinarily does not cover risks of damage caused by war, sabotage, civil unrest, or terrorism. After 9/11, this specific kind of war risk insurance became prohibitively expensive for airlines to obtain, causing the issu­ance of Presidential Determination No. 01-29 on September 23, 2001. This Determination, which authorizes the issuance of war risk coverage to U. S. flag air carriers for such loss or damage, and/ or the reimbursement of insurance cost increases to such carriers, was carried over into and as one of the provisions of the Homeland Security Act.

Aftermath

Still, the nation’s airlines faced many challenges after September 11. The extraordinary provi­sions of the supportive legislation passed by Congress in 2001 and 2002 certainly went far in preventing the collapse of segments of the air carrier industry, but much damage had been done. Projections made at the beginning of 2001

forecast a $3 billion loss for the airline industry for the year. As a result of 9/11, that loss quickly became more than twice that figure, $7.7 billion.

Added to this were the U. S. invasion of Afghanistan in October of 2001, the beginning of the Iraq War in March 2002, and the SARS epidemic (severe acute respiratory syndrome) in early 2003.8

The air transport industry was in for a very hard time during this turbulent period.

‘he National Airspace System (NAS) is S defined as the network of United States airspace: air navigation facilities, equipment, services, airports, aeronautical charts, rules, regu­lations, procedures, technical information, man­power, and material. The NAS is a product of the evolution of aviation, including the incorporation of technology as it evolved, the establishment of airspace classifications, the promulgation of regulations and procedures, and the development of airports and facilities, all for the purpose of transporting people and cargo as safely and effi­ciently as possible.

The National Airspace System has become inadequate to fulfill its function in air trans­portation. The technology that is used to con­trol movement within the system is basically 1950s technology, largely ground-based radars and navaids, and the ground-based equipment that uses the system is essentially worn out. Congestion and weather externalities cause substantial delays. Fuel conservation cannot be optimized even as the price of fuel surges. Environmental concerns from air transporta­tion operations are not being assuaged. There
is little coordination between airport operations and airborne operations. Further evolution of the same technology will not serve the needs of the NAS and the traveling public in the future. A new technology and a new way of doing things are needed.

3 Vision 100-Century of Aviation
Reauthorization Act of 20031

After many years of anguished discussion con­cerning the state of U. S. air traffic control, FAA equipment problems, and the burgeoning volume of air traffic following economic deregulation of the airlines, Congress passed legislation in 2003 that will, in stages, revamp the way aircraft, passengers, and cargo are moved from airport to airport, and in the process will coordinate airport functions and ground operations with air segments.

This comprehensive and far-reaching statute encompasses many areas of the air transportation system, but most importantly it authorizes the development and implementation of a new and
modernized National Airspace System. Labeled “The Next Generation Air Transportation Sys­tem,” or NextGen, it proposes to transform the air transportation system from one based on ground radars to one based on precision satellite-based navigation, with comprehensive changes in virtu­ally every aspect of movement by air. This under­taking is so vast that it is best described as an evolution of ideas and technologies that are devel­oping even as it is being put in place. The process contemplates a 20-plus year time frame for com­pletion, projected for the year 2025.

NextGen is a transformative change in how we fly. It will change the management and opera­tion of the NAS, while enhancing safety, reduc­ing delays, saving fuel, and reducing adverse environmental impacts. It will integrate satellite navigation with advanced digital communica­tions and it will incorporate the airport environ­ment into the overall planning and functionality of the National Airspace System. It will change the way weather information is provided to pilots, controllers, and airline dispatchers.

Development and implementation of NextGen is a daunting task for many reasons, including: [21] [22] [23] [24] [25]

6, It requires the building of more than 700 new ground stations and facilities around the country to implement the new technology.

?. It requires the promulgation of new rules and procedures, and the publication of new charts and approach plates to use the new system.

8, The system must be integrated on a global basis.

The development and implementation of the new system, therefore, involves every entity that is in the production chain of development and every entity that is affected or will be affected by the implementation of the system, which includes virtually everyone involved in the air transpor­tation community. Collaboration among these stakeholders is being facilitated by several orga­nizations or relationships, including:

1. The Joint Planning and Development Office (JPDO), which was authorized in the stat­ute, and which coordinates among the FAA, NASA, the Departments of Defense, Com­merce, and Homeland Security and which has laid the groundwork and plans for the future vision for NextGen.

2. RTCA, which is a private, not-for-profit corporation that functions as a Federal Advisory Committee and includes some 400 industry and academic organizations from the United States and other coun­tries. RTCA was organized in 1935 as the Radio Technical Commission for Aeronau­tics and develops consensus-based recom­mendations regarding communications, navigation, surveillance, and air traffic management.

3. The NextGen Mid-Term Implementation Task Force, which is a consortium of over 300 representatives of the aviation com­munity who provide recommendations to the FAA as it moves forward on NextGen implementation.

4, The FAA, which is collaborating with the Department of Defense and Homeland Secu­rity to facilitate the entry of unmanned air­craft systems (UAVs) into the NAS.

5, The FAA, which is collaborating with the military, NASA, and NOAA’s National Weather Service to incorporate weather data into the system.

6, The FAA, which is working through ICAO with international partners in Europe, Japan, and Australia to ensure compatibility with global standards.

In November 1944, representatives from 54 countries attended the conference, since known as the Chicago Conference, at the end of which 32 countries signed a convention, the Chicago Convention, 1944, which established the Interna­tional Civil Aviation Organization (ICAO) upon ratification of the convention by the required number of 26 countries. Ratification was accom­plished on April 4, 1947, and at the invitation of the Canadian government, headquarters were established in Montreal. Legally, ICAO became a specialized agency linked to the Economics and Social Council of the United Nations.

The stated purposes of the Convention, to be administered and facilitated by ICAO, included (1) providing for the adoption of Inter­national Standards and Recommended Practices

regulating international navigation, (2) providing recommendations for the installation of naviga­tional facilities by the Contracting States, and (3) suggesting ways for the reduction of customs and immigration formalities. These purposes were to establish the fundamental basis for the safety, efficiency, and regularity of international civil aviation in the years to come.

The EU institutions have also assumed respon­sibility for certain noneconomic issues that have direct bearing on air transport. Included in these issues are:

• Air traffic control

• Noise

• Carrier liability

• Accident investigation

Air Traffic Control

In 1961, the European Economic Community (EEC) was composed of just the original six members. Air traffic control after World War II had been the responsibility of each of their indi­vidual national governments. One of the first attempts at consolidation by the EEC was the coordination of air traffic within their severely restricted airspace. Beginning that year, the EEC created the agency known as Eurocontrol, which took charge of air traffic control over the greater part of Europe.

In 1999, almost 40 years after establishment of the EEC, the European Commission recom­mended changes to Eurocontrol that would bring about a more unified and efficient air traffic con­trol system. By 1999, the organization had grown to 15 Member States, and the EEC had become the substantial sovereign entity known as the Euro­pean Union. One of the recommended changes to the operation of Eurocontrol was the creation of the concept known as “Single European Sky.”

Later in this chapter we will review the his­torical evolution of Eurocontrol, the transition of air traffic control under the Single European Sky concept, and the proposed development of a satellite-based air traffic control system.

Noise Limitations

Reduction of noise levels on and around air­ports worldwide has received much attention. Excellent progress has been made in this area as decibel levels of operating aircraft have progres­sively been reduced and as land use management and other methods of noise reduction have been adopted. Europe’s urban concentrations have made airport noise limitation a critical issue, and the EU has been aggressive in this area. Some EU practices, however, have caused con­sternation to foreign carriers and their govern­ments. It is alleged, for instance, that the EU noise restrictions adopted by the Council have been applied in order to manage and restrict mar­ket access to foreign aircraft manufacturers, nota­bly in the United States (Boeing). The argument is made that such restrictions are actually a form of “protectionism” for Airbus Industrie. These arguments note that EU noise limitations are sig­nificantly more limiting than ICAO standards.

Air Carrier Liability

Until recently, air carrier liability was governed by the terms of the Warsaw Convention of 1929, as modified by subsequent protocols and volun­tary carrier agreements. A complete overhaul of the system was completed in 1999 (the Montreal Convention of 1999), and it entered into force as of November 4, 2003, among ratifying nations.4 In 1997, the European Council adopted regula­tions that defined carrier liability of EU operators, increasing their potential liability (100,000 SDRs). These regulations are mandatory for EU-based operators but non-EU operators may exempt themselves from their operation through tariff clauses if notice to passengers is properly given.

Accident Investigation

In 1994, the Council adopted regulations designed to harmonize accident investigations within the EU, and outside the EU in some circumstances, by providing guidelines and requirements to be observed by Member States. National govern­ments have had responsibility under the Chicago Convention for coordinating investigations of air crashes and incidents for 50 years. The action by the Council standardizes the procedures and requires reports to be filed with the Commission.

The Limited Test Ban Treaty of 1963

Escalating tensions and the growth of nuclear armaments during the 1950s had caused talks between the United States and the U. S.S. R to commence in 1955 over the issue of the test­ing of such weapons. Radiation fallout from atmospheric tests by both sides had accidentally contaminated people and areas far removed from the test sites. Apprehension over the cumulative effect of contamination of the environment and possible genetic damage to the population was shared by most civilized countries.

The United States and the Soviet Union both had actually detonated nuclear devices above the Karman line, the highest at 540 kilometers (335 miles). The effects of these explosions were varied, and their visual effects were quite spectacular, but the destruction of the electronic components of satellites in low earth orbit by electromagnetic pulses was a common result. During the Cuban missile crisis in October 1962, both the United States and the Soviet Union deto­nated several high altitude devices as a show of force. The most significant, destructive effects of nuclear detonations in space occurred during this time, on October 22, 1962, when the Soviets exploded a device at an altitude of 290 kilome­ters. Electromagnetic impulses at ground level in

Kazakhstan fused 570 km of overhead telephone line, started a fire that burned down a power plant, and shut down 1,000 km of buried power cables.

The next year, in 1963, the United States and the Soviet Union agreed to prohibit nuclear weapons tests “or any other explosion” in the atmosphere, under water, or in outer space. The inclusion of outer space in this essentially ter­restrial agreement created a benchmark for future agreement on outer space.

The General Assembly of the United Nations created the Committee on the Peace­ful Uses of Outer Space, COPUOS, in 1959. Although it was not involved in the bilateral Limited Test Ban Treaty of 1963 between the United States and the U. S.S. R., its purpose was to review the scope of international cooperation in peaceful uses of outer space. It has two sub­committees, the Scientific and Technical Sub­committee and the Legal Subcommittee.

COPUOS has been central to the develop­ment of existing international law regarding space. It has, in fact, drafted all international treaties that now exist dealing with outer space, some five in number that were adopted between 1967 and 1979. The Committee was composed of just 24 members when it was created as a permanent body in 1959, which facilitated its work since the Committee is operated on the basis of consensus (agreement), not majority vote. It is now composed of 71 mem­bers. We will now look at the five treaties that have been adopted out of COPUOS.

For many years after the launch of Sputnik, the competitive aspects of the space race between the United States and the U. S.S. R. spurred space advances and development. These were the days of setting new records over the whole spectrum of space activity. These “firsts” included the first human in space, the first woman, the longest human time-period in space, and the first “spacewalk.”

A Brief History

During these early years, the space race included the race to the moon. Both the U. S. and the U. S.S. R. successfully sent unmanned probes to
the moon, but it was the United States, as a result of the Apollo Program, that was to win the race for putting a man on the moon’s surface. Begin­ning with the launch of Apollo 8 on December 21, 1968, Americans left earth’s orbit and ven­tured out into deep space. Apollo 8 and Apollo

10 were limited to lunar orbiting missions; it was not until Apollo 11, on July 21, 1969, that Neil Armstrong became the first human to set foot on the surface of the moon.34

The Apollo Program successfully landed six missions on the surface of the moon. Apollo

11 through Apollo 17 were landing missions to the moon, but due to a life-threatening explosion of an oxygen tank aboard the command mod­ule of Apollo 13, on April 13, 1970 en route to the moon, that lunar landing mission had to be scrapped. Only through superior scientific and engineering skill, and determination by NASA personnel and the onboard crew, with a bit of luck thrown in, was the Apollo 13 crew success­fully retrieved from space to a safe landing. The details of this extraordinary feat are well worth reading.

The Soviet Lunar Program had 20 suc­cessful missions to the moon, including the first flyby, first soft landing on the moon, and the first circumlunar probe to return to earth. Although denied by the Soviet government at the time, the U. S.S. R. had two manned lunar programs in progress in competition with the United States during the 1960s and 1970s. Due to several launch vehicle failures, these programs were can­celed by 1976.

To date (circa 2013), only three coun­tries have placed humans into space utilizing their own launching systems. In addition to the United States and the U. S.S. R., in October 2003, the People’s Republic of China successfully launched its first astronaut into orbit on the Shen – zhou 5 launch vehicle. China has also announced its intention to put astronauts on the moon by 2025. All other countries’ programs, including the European Hermes and the Japanese Hope-X programs, have been canceled.

Human space flight since the Apollo mis­sions has been limited to earth orbit. The Space Shuttle program in the United States has met with both success and failure as discussed above, with two catastrophic flights in Chal­lenger (explosion of the external tank caused by booster rocket failure on launch in 1986 with complete loss of crew) and Columbia (disinte­gration of the orbiter on reentry in 2003 with complete loss of crew). Additionally, the pub­lic and Congressional enthusiasm for human space flight seemed to wane as the space pro­gram became more mundane and as costs for the program came under greater Congressional scrutiny.

Frank Lorenzo next set his sights on Continental Airlines, which had a proud history going back to 1934 as Varney Speed Lines. The airline was renamed Continental Air Lines in 1937, even before the passage of the Civil Aeronautics Act, and before Frank Lorenzo was born. Lorenzo had earlier attempted to interest Robert Six, founder and chief executive of Continental, in a merger with Texas International, to no avail. Six was among the group of original oil-stained visionar­ies who had started it all in the airline business, along with Jack Frye, Eddie Rickenbacker, and Juan Trippe, and he wanted nothing to do with the financial whiz-kid from New York. By 1980, Continental’s all-jet fleet flew routes coast to coast and over the Pacific to the Far East and Australia. But by 1980, the effects of deregula­tion and a long strike by flight attendants had produced a loss of $27 million for the year. An attempted merger with Western Airlines did not succeed, and Continental was at risk.

By 1981, A1 Feldman had replaced Robert Six as CEO. Feldman was also of the old school and was no more interested in hooking up with Lorenzo than Six had been. Before joining Con­tinental, Feldman had successfully turned around Frontier Airlines using traditional business meth­ods. Unable to secure a voluntary merger agree­ment with Feldman, Lorenzo, using the assets of Texas Air, began buying Continental stock in another hostile takeover bid.

Feldman fought the takeover energetically, combining with Continental’s labor forces to present a united front in opposition. Attempts were even made to get financing that would allow the employees to buy into the company through an employee stock ownership plan (ESOP). In spite of these frantic efforts, which included the employees giving up $180 million in projected pay raises, the ESOP failed. Lorenzo ultimately acquired enough company stock through the open market to get voting control. A1 Feldman committed suicide in his office on August 9, 1981.

When Lorenzo took over, a new board of directors was selected, which included Alfred Kahn and John Robson, both former chairmen of the CAB. Because of their roles in bringing about economic deregulation, it could be said that they were both indirectly responsible for the emergence of the voracious Frank Lorenzo as a force in the airline industry. Lorenzo brought in Stephen Wolf from Pan Am as president of Continental. Lorenzo decided to merge Texas International operations and assets with those of Continental, to jettison the Texas Interna­tional name for good, and to move forward as Continental.

As the consolidation proceeded and Loren­zo’s accounting team probed deeper into Con­tinental’s finances, it soon became clear that the company was in much worse shape than Lorenzo had been led to believe. It began to look like Lorenzo might have finally made a fatal miscalculation. If Lorenzo’s investment was to be salvaged, drastic measures were going to be called for.

Phil Bakes, still Lorenzo’s right-hand man, determined that the airline’s main expense challenge was the cost of labor. Pilots aver­aged around $90,000 per year, but flew only about a third of the month. Flight attendants drew $37,500 annually. Mechanics’ wages were $40,000 a year. If Continental was going to survive, labor would have to yield to the com­petitive market consequences of deregulation. Attempts at conciliation between the two sides proved fruitless. The machinists’ union, Inter­national Association of Machinists (IAM), went on strike at Continental in August 1983. On Sep­tember 24, 1983, Continental became the second major airline to file for Chapter 11 protection under the Bankruptcy Act.

Lorenzo turned over operation of the air­line in Chapter 11 to Phil Bakes. A recent deci­sion of the U. S. Supreme Court, National Labor Relations Board v. Bildisco,1 established that labor contracts, to the extent that their provi­sions impaired the claims of other creditors, were not enforceable against the debtor corporation (the airline). This decision opened the way for

Continental to unilaterally abrogate all wage scales and work rules, which it did immediately. In effect, Lorenzo was able to legally cancel all labor contracts that were in force at Continen­tal. He then invited back its employees to work longer hours at half the rate of pay. Those who did not agree were simply out of a job. New hires were made in all areas of the company and, despite the fact that the company was in bank­ruptcy, the pilots’ union called a strike. Through the efforts of Phil Bakes, schedules were largely maintained, additional pilots were brought into the company, fares were lowered to attract more passengers, and gradually the company took on a semblance of normalcy. Two years after Conti­nental entered Chapter 11, it became the first air­line to successfully emerge from bankruptcy and to pay its creditors close to 100 cents on the dol­lar. The restructured and reconfigured airline was now ready to cope with the deregulated world.

There were no unions for cabin attendants work­ing for the airlines prior to the early 1940s. Their roles had been defined early on by passenger ship service, and these attendants were usually males who were termed “stewards” or “pursers.” Dur­ing the 1920s, Pan American World Airways first employed male stewards on their Key West and Miami service to Havana, using 10-passenger Fokker aircraft (see Figure 15-9, p. 144).

Domestically, women came into the airline work force in 1930 when Boeing Air Transport, later United Airlines, hired Ellen Church, a reg­istered nurse. Church was enamored of aviation and had applied unsuccessfully for a pilot’s posi­tion with Boeing Air Transport. Having been rejected as a pilot, she suggested that having a registered nurse on board would help alleviate passengers’ fear of flying in those early days and that she could professionally attend to air sick­ness as well.

Church became the world’s first stewardess on May 15, 1930, in a three-month experiment that ultimately used eight registered nurses on the west coast to Chicago routes. The addition of these nurses was an unqualified success and, within a short time, most airlines in the country also began adding nurses to their flight crews. They were called “stewardesses.”

Stewardesses in the 1930s were required to be unmarried, younger than 25 years old, weigh less than 115 pounds, and be under 5’4” tall. At the time, there was some correlation between these physical requirements and the size of the interior of most passenger planes. In addition to attending to passengers, their duties included fueling the airplanes, hauling baggage, and light cabin maintenance.

In 1953, American Airlines imposed an upper age restriction for continued employment for stewardesses that called for their retirement upon reaching 32 years of age. Their union was able to limit this rule to new hires, exempting current employees. By this time, many airliners had pressurization systems that allowed flights to be conducted at higher altitudes in quite com­fortable conditions, out of most of the weather and turbulence inducing air sickness and fear of earlier times. These aspects of commercial flight were significantly enhanced with the introduction of passenger jets late in the 1950s.

By 1960, the stewardesses were represented by a division of the Air Line Pilots Association known as the Air Line Stewards and Stewardess Association (ALSSA), now an independent union known as the Association of Flight Attendants.2