Lorenzo Departs

Frank Lorenzo was obviously not cut from the same airline cloth as were the early aviation chieftains like Jack Frye, Eddie Rickenbacker, and Juan Trippe, people who loved to build things and loved to fly. Lorenzo was first and foremost a financial guy, the quintessential MBA focused on finance, with little thought or care for tradition, history, or national concept. Whereas the airlines had been built by men who expected to make money from their efforts, not every deci­sion they made was a financial one; not every action taken was with a view toward the bottom line. Empire building in the early days was done one step at a time, not in one fell swoop like the hostile takeovers, leveraged buyouts, and unre­strained mergers that became the modus operandi of the deregulated 1980s. Lorenzo had turned the venerable airline industry on its head: Continen­tal had absorbed People Express (and Frontier) and New York Air. Texas Air, in turn, owned Continental, and had then acquired Eastern Air Lines. By 1987, Texas Air controlled 20 percent of the domestic airline market, and it had only 20 employees.

By the late 1980s, Lorenzo and his business methods were wearing thin in most quarters, including labor, the banks, other airlines, and the agencies of the federal government. His reputa­tion was preceding him. It was said that the Ber­lin wall, before it began to come down in 1989, bore Lorenzo’s name in red with a slash through it, signifying the negative. The ultimate indus­try rejection came from the bankruptcy order of Judge Burton Lifland, in his termination of Lorenzo’s status as debtor in possession of East­ern. Judge Lifland noted that Lorenzo was “not competent to reorganize” the company. Lorenzo himself seems to have tired of the game. Pickets from Eastern regularly appeared outside of his home and there was some concern for his safety and that of his family.

Jan Carlzon had built SAS (Scandinavian Airlines System) into a niche airline operation within the continent of Europe, competing with the large state-owned airlines. His vision was to beat his European competition to the markets of America now opening due to deregulation. Thus, he began overtures in the middle 1980s to estab­lish a relationship with a United States carrier. After negotiating unsuccessfully first with East­ern, then TWA, he approached Lorenzo with a proposition for a partnership arrangement with Continental, based out of Newark. This led to an agreement in October 1988 for SAS to purchase a minority interest in Texas Air for $50 million, to be followed the next year with another pay­ment of $40 million. Texas Air, in the late 1980s, was suffering hefty losses, and the experience with Eastern after its purchase by Texas Air was draining.

Lorenzo’s reputation had made its way to Europe, where labor interests looked askance at the prospect of the Texas Air-SAS alliance. One European tabloid ran a cartoon depicting Carlzon and Lorenzo in bed together with the caption “It’s fine if you go to bed just don’t go to sleep.” Even Lorenzo had to acknowledge that his repu­tation detracted from the ongoing success and potential of Texas Air holdings. In 1990, Texas Air was reorganized into Continental Air Hold­ings, and in the summer of that year Lorenzo struck a deal with SAS for the sale of his entire personal stake in the company for $50 million.

Seemingly always at the top of his game, and a master of timing, Lorenzo sold out just before Iraq invaded Kuwait in August 1990. The invasion and resulting worldwide reaction spurred fuel costs and depressed airline travel. Continental was unable to meet the financial strain imposed, and filed for Chapter 11 protec­tion again in December 1990, prompting some wags to suggest that Continental was now in “Chapter 22.”

Lorenzo made one last appearance on the airline scene in 1993. His idea was to inaugu­rate a new carrier called “Friendship Airlines.” He made application to the DOT, as required by law, for a Certificate of Public Convenience and Necessity. Since deregulation, this procedure has been used to determine the “fitness” of an appli­cant to conduct an interstate air carrier operation. The DOT denied the application. Lorenzo was finally gone. [14] [15]

How Proposed Mergers and Acquisitions Are Reviewed

American —————————————————— AMERICAN

Air Cal —————————————————————— 1

TWA (London routes) ————————————————

Eastern (Latin American routes)———————————–

United ———————————————————- UNITED

Pan Am (Transpacific, Latin American, & ————- 1

London Routes)

Air Wisconsin

Delta________________________ DELTA


Pan Am______________________

(European routes and N. Y. shuttle)

Northwest ____________________

North Central _________ Republic

Southern________________ і

Hughes Airwest

Texas International_____________


New York Air __________________

Frontier______________ People Express_______

Britt___________________ і


Braniff (Latin America) __ Eastern _______________

Rocky Mountain_______________________________

USAIR ______________________________ US AIRWAYS

PSA_________________________________ I

Empire_________________ Piedmont________

Henson__________________ I

Midway __________________________________

(Philadelphia gates and Canadian routes)

TWA________________________________ TWA**

Ozark_________________________________ I

Pan Am_____________________________ PAN AM

National________________________________ |


‘Renamed Continental Airline Holdings "Merged with American 2001

FIGURE 32-1 Historical major air carrier mergers, acquisitions, purchases, and consolidations through 2001. Please refer to Chapter 35 for an update of mergers and acquisitions.


Carriers proposing to merge are required to provide notice to the DOJ and to the Federal Trade Commission (FTC). The DOJ reviews the

proposed merger plan, usually within a period of 30 days, and if no competitive issues are discerned by the DOJ, the parties are free to proceed. In some cases, the DOJ may issue its request for additional information, which pre­vents further action toward merger by the carriers for another 20 days. Often, concerns of the DOJ are addressed in this manner and any issues are resolved without formal action. Other times, liti­gation is required to resolve the issues.

The DOJ normally applies the provisions of Section 7 of the Clayton Antitrust Act, which prohibits the acquisition of stock or assets “where in any line of commerce or in any activ­ity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” The statute provides the means for the proposed action to be prevented or delayed while the objections of the government are heard. The procedure reflects the fact that, once a merger process has begun or has been completed, it is very difficult to undo. Delay or prevention of the proposed merger activity is accomplished by the filing of a complaint in federal court and the seeking of a temporary restraining order or injunction to prohibit the air­lines from proceeding with the proposed action.

The authority of the DOJ extends to instances involving the acquisition of relatively minor assets of one carrier by another, as in the case of gates or slots at airports. In 1989, for example, the DOJ moved to block Eastern’s pro­posal to sell gates to US Air at Philadelphia Inter­national Airport, and again in 1991 when Eastern sought to sell slots and gates to United at Reagan Washington National Airport.

Finally, the DOJ has authority, jointly with the DOT, over airline acquisition of international route authority and mergers between domestic and foreign carriers. The DOT, in turn, works with the Department of State, which has final authority in dealing with foreign governments. The DOJ may challenge these proposals in the same manner as in domestic acquisitions.

United Airlines

After 9/11, then the sixth largest airline in the country, United applied for a government-guaran­teed loan from the Air Transportation Stabilization Board. In December 2002, the Board voted to deny the application in spite of concessions previ­ously given by its flight attendants and its pilots. The Board believed that United’s labor burden was still too bloated to allow it to compete in the exist­ing business environment. United filed for bank­ruptcy protection on December 9, 2002. In 2003, in bankruptcy court, United cut pilots’ wages 30 percent. Pilots pay then ranged between $33,000 for new hires to a high of $195,000. It also termi­nated its employee pension plan, the second airline to do so. Both of these pension plans were trans­ferred to the Pension Benefit Guaranty Corpora­tion, a federal agency set up to protect, at tax payer expense, employees’ pensions.12

Delta Airlines

After 9/11, Delta Airlines continued its downward spiral, losing $10 billion between 2001 and 2005. The third largest carrier in the United States, Delta entered Chapter 11 on September 14, 2005. Although Delta had been in financial straits for some time, its pilots pay ranged from $48,000 for beginning pilots to $275,000 for Boeing 777 captains. Delta froze its employee pension plan (which allowed Delta to forego any further contributions to the plan) by agreement with its unions. In September 2006, the Bankruptcy Court approved termination of Delta’s pilot pension plan. Delta has preserved ground and flight atten­dants’ pension plans based on the passage of the Pension Protection Act by Congress in 2006. This statute gives Delta (and Northwest) a period of 17 years to fund the employee plans.

Northwest Airlines

Northwest, the fourth largest U. S. carrier, entered Chapter 11 on the same day as Delta, September 14, 2005. Precipitating the filing, Northwest had been unable to win necessary wage concessions from its unions. In fact, Northwest had been operating for almost a month prior to filing with its unionized mechanics on strike. Like Delta, Northwest froze its employee pension plan in bankruptcy. Unlike other airlines in bankruptcy, Northwest preserved all of its pension plans.

As of September 14, 2005, four of the top seven carriers in the United States were in bankruptcy. They were all legacy airlines. See Figure 35-21.

ATA Airlines

AT A was a new entrant airline, receiving its air carrier certificate in 1981, post deregula­tion. As the country’s 10th largest air carrier, it filed for protection on October 22, 2004, citing fuel prices, competition, and lease payments on aircraft. This was necessary in spite of receiv­ing an ATSB loan guarantee in the amount of $168 million in 2002. As part of its restructur­ing under bankruptcy protection, ATA agreed to sell its hub operation at Chicago Midway to AirTran, one of its major competitors. It also sold its slots at LaGuardia and Reagan National to AirTran.

The International Civil Aviation Organization (ICAO)

ICAO officially came into being in 1947 as a result of the Chicago Convention, upon ratifica­tion by the requisite number of states. According to the mission statement of the organization, its aims and objectives are to develop the principles and techniques of international air navigation and to foster the planning and development of inter­national air transport, so as to meet the needs of the international civil aviation community. The organization emphasizes its commitment, among other things, to facilitate:

1. The safe and orderly growth of civil air transportation

2. Aircraft design and operation for peaceful purposes

3. The development of airports, airways, and air navigation facilities for international civil aviation

Specifically, ICAO undertook to:

1. Establish international standards for aircraft airworthiness certification, flight crew certi­fication, communications, and radio aids to navigation

2, Establish principles and procedures for the economic regulation of international routes, fares, frequency, and capacity

The use of English as the required language for communication between aircraft and air traffic control authorities in international civil aviation all over the world is an example of ICAO work.

ICAO adopts and publishes technical stan­dards referred to as Standards and Recommended Practices (SARPs) that govern the interac­tion of civil air transportation the world over. These international standards are incorporated into 18 technical annexes to provide uniformity and consistency that contribute to the safety and smooth operation of international civil aviation. ICAO proposes amendments and additions to SARPs as technology advances and conditions change. ICAO is essential in the coordination of the United States’ NextGen program and the European Union’s complementary SESAR innovations, and with the spreading of com­patible technology throughout worldwide civil aviation. The human element component of the equation is addressed through its TRAINAIR PLUS program, which is aimed at improving the quality and efficiency of aviation training, and the Human Factors program, which is directed toward reducing the impact of human perfor­mance limitations.

Other programs and efforts of the orga­nization relate to education, the environment, including noise issues and emissions affecting the ozone layer, problems involving multiple taxation, airport and route facility management, statistics, economic analysis, legal matters including treaty drafting and interpretation of law, and security.

Security has been a subject of ICAO action since the early 1970s as a result of the hijacking of aircraft beginning in the 1960s. In 1974, ICAO adopted its Standards and Recommended Prac­tices (SARPs) on Security, designated as Annex 17. The Annex is under constant review, and it has been amended multiple times in order to respond to changing needs. The progression of emphasis in Annex 17 has been from hijacking, to sabotage, to baggage reconciliation with pas­sengers, to screening of passengers and baggage and carry-on luggage, and the prevention and suppression of unlawful acts generally against civil aviation worldwide. The latest revision was effective on July 1, 2011.

Another example of ICAO commitment to global civil aviation relates to aviation safety in underdeveloped nations and regions. Due to the disproportionately high aviation accident rate in Africa, beginning in 2008, ICAO began adopt­ing a “new approach” toward carrying out its mandate to improve worldwide aviation safety as it relates to that region. Designated the Com­prehensive Regional Implementation Plan for Aviation Safety in Africa (AFI Plan), ICAO developed a work program to enhance the avia­tion safety culture of African aviation service providers, to enable African countries to estab­lish and maintain a safety oversight system, and to assist them in identifying and resolving defi­ciencies in a reasonable manner.


It was only in 1958 that studies and tests con­ducted by government and industry indicated the feasibility of manned space flight. America’s first manned space flight program was named Mercury on October 7, 1958 with the objectives of placing a manned spacecraft in orbital flight around the earth, to investigate man’s capabilities and ability to function in space, and to recover the man and spacecraft safely from space.

The American space program, like that of the U. S.S. R., had to begin from a standing start. This meant that all aspects of the program had to be originated, tested, and approved, including the selection of the launch vehicle, the space­craft, and the selection of the men who were to participate in the program. After the completion of a pervasive and exhausting testing regimen and selection process, seven military pilots were chosen as the original participants in the pro­gram and were introduced to the Congress as astronauts on May 28, 1959. They were quickly accepted as a new kind of hero.

The initial flights for the Mercury mission were conducted on Redstone rockets (subor­bital flights of Shepherd and Grissom in 1961). A modified Atlas rocket carried John Glenn to America’s first manned orbit on February 29, 1962 and to the following orbital missions of the program, ending with Gordon Cooper’s 34-hour,

19- minute final Mercury mission on May 16, 1963.

The project was terminated in 1963.


Gemini was the second manned space program, begun in 1962. Its name derived from the third constellation of the Zodiac (the Twins), since the capsule was designed to carry two astronauts into space. Its mission included launching men and equipment for up to two weeks in low earth orbit, to rendezvous and dock, and to refine a system for maneuvering the docked combination by using the target vehicle’s propulsion system. The program’s launch vehicle was the Titan II rocket. The project successfully flew 10 manned missions, achieved the first extra vehicular activ­ity in space (EVA) and a record altitude of 739.2 miles. This project was canceled in 1964.


The Apollo Program was designed for lunar exploration using a three-man spacecraft and lunar orbiter and a serially developed Saturn rocket.

The Apollo Program consisted of 33 flights, of which 11 were manned. The 22 unmanned flights were conducted to qualify the launch vehicle and spacecraft for manned space flight. Four of the manned flights were also conducted to man-rate the overall vehicle for lunar explo­ration. The final 7 flights were conducted to explore the lunar environment and lunar surface. During the program, no launch failure occurred to prevent a mission and only one in-flight fail­ure (Apollo 13) occurred to prevent the intended mission from being accomplished.

Testing Phase: The original launch vehicle for the Apollo program was the Saturn I mis­sile, first tested in October 1961 in a suborbital trajectory. The first orbital mission (unmanned) occurred on January 29, 1964 on the Saturn’s fifth launch. Testing progressed using the Sat­urn IB launch vehicle and an unmanned Apollo spacecraft. November 9, 1967 marked the first flight of the Saturn V three-stage rocket, which was to be used for lunar missions.

Manned Phase: On January 27, 1967, a flash fire occurred in the Apollo spacecraft (denomi­nated command module 012) while positioned on the launch vehicle and during a launch pad test of the vehicle for the first manned flight, kill­ing three astronauts. Dead were Lt. Col. Virgil I. Grissom, one of the original seven and a veteran of flights in the Mercury and Gemini programs; Lt. Col. Edward H. White, the first astronaut to conduct an EVA (Gemini Program); and Roger B. Chaffee, who was prepping for his first space flight. As a result of a comprehensive investiga­tion, which caused an 18-month delay in the first manned mission, significant design and engineer­ing modifications were made to the spacecraft.

The first manned mission, known as Apollo 7, flew on October 11, 1968 and began the series of missions that would land men on the moon. Apollo 8 was the first mission designed to leave earth orbit and to circle the moon, and the first manned flight to be launched using the three – stage Saturn V rocket. Aboard this flight were

Frank Borman, Commander; James A. Lovell, Command Module Pilot; and William A. Anders, Lunar Module Pilot.

The mission of Apollo 11 was to land Neil A. Armstrong and Edwin E. Aldrin, Jr. on the surface of the moon, have them exit the lunar module and perform certain minimum tasks, and return safely to the command module for the return to earth. Ed Collins remained in lunar orbit in the command module. The lunar module successfully landed on the lunar surface on July 20, 1969 and six hours later, at 0256 UTC on July 21, Neil Armstrong became the first human to set foot on the moon, followed by Ed Aldrin. Together they spent over 21 hours on the moon’s surface and collected over 47 pounds of lunar material for return to earth. Most of their activi­ties were seen by a live television feed broadcast to a world-wide audience. All three astronauts returned to earth on July 24, 1969.

Subsequent missions in the program, with the exception of Apollo 13, were carried to successful conclusion, ending in the mis­sion of Apollo 17 (launched on December 7, 1972). Apollo 17 brought to a close one of the most ambitious and successful endeavors ever attempted by man.24

Airline Union Characteristics

From a historical point of view, the machinists’ union, IAM, can be considered to remain the most intransigent in labor negotiations. IAM is a cen­tralized union with bargaining units outside of the airline industry. As a union with strong, central leadership that generally controls ultimate deci­sion making in negotiations and concessions, there is a more consistent negotiating position through­out the union, and much less fragmentation due to local union authority. Mechanics are also less affected by either work stoppages or the fear of long-term unemployment due to bankruptcies of their employers since they are readily employable at other carriers or outside of the airline industry. One drawback to IAM is the fact that it represents significant numbers of much less skilled, or even unskilled, workers both within and outside of the industry. Aircraft cleaners and other ground employees, in some locations, are able to control the union. It is apparent that the interests of these disparate groups are not identical.

Pilots, 90 percent of whom are represented by ALPA, are all employed with the airline industry, and their mobility within the industry is seriously constrained by the seniority system employed on all airlines. They are also much more impacted by work stoppages or by car­rier bankruptcies since they have no comparable opportunities outside of the industry, or even within the industry due to the seniority rosters. Finally, local ALPA chapters have had much more autonomy than IAM and have been more amenable to concession bargaining on an indi­vidual carrier basis.

Flight attendants traditionally have had less bargaining power than pilots and mechanics. They were organized much later than the other two crafts, and they have been less unified. In the early 1980s, there were 11 bargaining units representing flight attendants. Their training is much less extensive than pilots or mechanics and, before 2004, there was no FAA certifica­tion requirement for flight attendants. In the fall of 2003, Congress established a flight attendant certification requirement under the Vision 100— Century of Aviation Reauthorization Act. The Act requires that after December 11, 2004, no person may serve as a flight attendant aboard an aircraft of an air carrier unless that person holds a Cer­tificate of Demonstrated Proficiency (certificate) issued by the FAA.

Airport-ControiOed or Common-Use Arrangements

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.

Something New Under the Sun: Next Generation Air Transportation System (NextGen), the National Airspace System, and Unmanned Air Vehicles

‘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.

Noneconomic Issues

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.

Confusing Vision for Space Exploration-А Statement of National Purpose?

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.