Category AVIATION &ТНЕ ROLE OF GOVERNMENT

Computer Reservation Systems

Lorenzo was by no means through acquiring airlines. In 1985, just prior to Continental’s com­ing out of reorganization, Lorenzo made a play for TWA. Some said this was because he needed its computer reservation system to manage the traffic in his growing conglomerate of airline companies. Nobody had yet heard of the Internet. Computer reservation systems were proprietary with each of the Big Four, and it was realized that these systems gave huge advantages to those airlines by increasing their passenger market share, to the detriment of the smaller lines.

Travel reservations, the process of match­ing an available seat with a named passenger to occupy it, had always been a complex undertak­ing. Even with the railroads, where it was largely a matter of recognizing where passengers on the line of road were getting on and getting off, keeping up with the availability of seats was a daunting task. In the early airlines, as with the railroads, reservations were tracked manually, usually at a central location. Entries represent­ing reservations were made in pencil so that they could be erased if the reservation was cancelled.

When traffic picked up in the 1930s, ledgers became even more impractical, and the system was expanded to chalkboard displays in large rooms, also at a central location, on which entries and cancellations were noted. Clerks who took the reservation request from passengers handed off the information to runners who relayed the details to writers at the chalkboards. In time chalkboards were replaced by electric light displays, also in large rooms, and despite the advanced technology of electricity, the process was still manual, cumbersome, and inaccurate. Increased service to multiple cities in random directions, even on one airline, exponentially increased the difficulties of keeping track of res­ervations manually. Booking seats on multiple airlines made the job even harder.

By the 1940s, efforts were being made to automate the process. Makers of computational equipment, like adding machines, were the logi­cal choice to assist in solving these mathemati­cal complexities, but in turn these companies advised that they could not handle the number of variables presented in the problem.

C. R. Smith of American Airlines, himself an accountant and numbers man, was preoc­cupied with the reservations dilemma. Unable to secure assistance outside of the company, he authorized American’s technical people to come up with a solution. The result was a mas­sive mechanical monstrosity consisting of verti­cal cylinders, each one representing a different flight on a given day, which was filled with marbles representing available seats. When a seat was booked, an agent activated a switch that released one marble from the cylinder. A reciprocal arrangement at the top of the cylinder released a marble back into the cylinder for each reservation that was cancelled.

This arrangement was an improvement, but it was no match for the growing problem of reservations as traffic increased. With the beginning of the jet age in commercial air traffic, once again the problem was made exponentially more difficult. The process was not only marginally inaccurate, but also very costly for the company as personnel and terminals had to be added to the system.

IBM, through its primitive computer technol­ogy, during the 1950s was out front in developing solutions for the federal government related to the problems of monitoring the potential for incoming ballistic missiles. The acronym for the IBM pro­gram was SAGE, Semi-Automatic Ground Envi­ronment. SAGE was the first computer game in real time as strategic and tactical planners engaged each other in simulations of nuclear warfare.

Under contract with American, IBM began applying its SAGE technology to the reserva­tions problem, and for almost 10 years its best minds labored away. The project was originally known as SABER, Semi-Automatic Business Environment Research, and later as SABRE, and the first commercial activation of the system did not occur until 1962. At that time computer technology was truly rudimentary, and almost all commercial computers were engaged in solv­ing mathematical equations, or in streamlining the problems of accounting in corporate Amer­ica, like payrolls. And these applications were applied to dealing with numbers in a historical context, not real-time. With SABRE, real-time computing in business applications was born.

With this development American Airlines had a real commercial advantage over its compet­itors. In the 1960s, the Civil Aeronautics Board was still in control of all meaningful decisions related to the running of an airline, so SABRE’s function was expanded to not only solve Ameri­can’s reservations problems, and to assure con­sistent and accurate reservations for the very first time, but also to track every passenger’s name, address, personal information, and most details of that passenger’s travel preferences, such as hotel usage. Not only could SABRE track cus­tomer information, but the technology was soon expanded to begin to solve the company’s day – to-day operational problems. But management at American was slow to realize the full potential of the advantage given them by the computer sys­tem they had developed.

The other airlines began their own experi­mentations with computers, particularly as applied to the reservations system. The technol­ogy was still relatively primitive, and the cost was enormous. In 1966, TWA committed $75 million to solving the problem, hiring Burroughs Corporation to come up with a proprietary com­puter reservations system (CRS). By 1970, no workable system had been achieved, although in time TWA would perfect a system known as PARS. United began its own program, called APOLLO, and made reasonable progress. At the same time at American, SABRE was losing its advantage as management failed to upgrade equipment, and as uninstalled computers sat in storage, allowing its competitors to catch up. Still, all computer reservation systems at the time were considered works in progress.

In 1970, in spite of their individual efforts up to that time, the major airlines realized that, from a cost-effectiveness standpoint, it made a lot more sense to pool their resources to develop the ultimate computer reservations system than for each to go it alone, thereby duplicating effort and wasting untold sums of money. When pre­sented with the airlines’ plan, the Justice Depart­ment announced that it would consider such a combination between the major carriers to be a violation of the Sherman Antitrust Act, and would prosecute the airlines criminally if they proceeded. Many considered this an extreme example of government abuse of power, but there was little the airlines could do. The opportunity was thus lost to have a single, unbiased reserva­tions program developed for the benefit of all of the airlines and the public at large. The only course left for the airlines was for each of them to develop their own, proprietary system. Few in 1970 realized the commercial potential of the computer, or the great benefits that would inure to the owners of these proprietary systems. The joint plan proposed by the airlines would have allowed the unbiased computer reservations sys­tem to be used by all travel agents in servicing the flying public. Now the public would have to wait, as would the travel agents.

Around 1975, the travel agents got together to announce that they were planning to develop their own CRS. United had its APOLLO up and running, and by 1974 it was generally considered to be the best in the industry, having surpassed SABRE. It was, however, still in development. No one at the major airlines believed that it was in their interest to lose control of CRS, and be faced with a giant travel agent computer network where all flights of all airlines would be available to all travel agents everywhere. It was feared that such a system would require the airlines to pay a transaction fee for every reservation, in addition to the commission that they paid.

Another effort was made by the airlines to convince the government of the desirability of the joint approach. The CAB this time gave the airlines antitrust immunity, but only to permit the airlines to explore the possibilities of such a system—to talk, but not to proceed, with build­ing the program. It was at this stage, in July 1975, that United unilaterally declared that it would no longer participate in seeking government approval for the joint effort, and that it would go it alone. United, as the biggest bear in the woods, believed that it had a competitive advantage over the other airlines in its CRS, and it began to appreciate what favorable nuances could be incorporated into the program to heighten that advantage. United’s plan was to gain control of the travel agent business by supplying travel agents with its APOLLO program which would, of course, have built into it biases in favor of United.

The world of travel agents at the time was one of telephones and paper transactions. The Official Airline Guide (OAG) was a periodical publication containing all the world’s airline departures and arrivals, displayed in a city pair format. The procedure was for the travel agent, upon receiving a request from a traveler for flight information preparatory to booking a reservation, to go to the OAG, discern the flight information and the airline that most closely matched the traveler’s request, and then secure authority from the traveler to book the flight. The travel agent would then telephone the airline, confirm the res­ervation, secure the airline’s authority, and then telephone the traveler back with the confirmation. The agent would then write the ticket and ulti­mately transmit it to the traveler, usually by mail. The travel agent was paid a commission by the airline.

The United plan would simplify this proce­dure greatly. The plan was to install computer terminals in the travel agents’ offices for a fee, and then provide the agents with all of the flight information available in the OAG on an inter­active, real-time basis so that the travel agent would be able to confirm the reservation while the traveler was still on the phone, then the com­puter would issue the ticket. Unstated, but appre­ciated by some of United’s competitors like Bob Crandall at American, was the fact that APOLLO would contain preferences for United through outright biased presentations that would likely cause the travel agent to favor a United flight over any other.

Typical of the types of bias that the com­puter could generate was the positioning of the flight information on the computer screen. Amer­ican had conducted research that showed that 50 percent of the time, travel agents selected the flight that appeared on the first line of the computer screen. Ninety percent of the time, the travel agent picked a flight that appeared on the first page of a multi-page computer display. If the proprietary CRS program were configured to offer its own flights on the first line, or at least in a favorable position on the first page, there was an advantage to that airline. Various algorithms were developed to accomplish these ends.

Dick Ferris of United and Bob Crandall of American, with their companies in a nip and tuck race to lead the industry in the middle 1970s, were head-to-head competitors. Crandall resolved to bring SABRE back up to a com­petitive level, and to pitch SABRE to the travel agents as the best system for them. Crandall did his homework, made presentations at national travel agent conventions, conducted mail-out campaigns, and before long, American was out in front again.

The agents who signed up with American were provided with terminals, computers, moni­tors, and the essentials for using the system in their business, and they were charged a fee. Only the largest “commercial” agencies could afford to par­ticipate, but the hardware was getting cheaper by
the month. Then United struck back by providing some of the agencies with the equipment without a fee, and allegedly gave rebates (kickbacks) to the agencies for using United’s CRS.

By 1983, the proprietary computer reserva­tion systems included American’s SABRE, Unit­ed’s APOLLO, TWA’s PARS, Delta’s DATAS II, and Eastern’s SODA. All of these systems began as in-house reservation systems, but their databases were expanded and their access sys­tems were configured to allow distribution to travel agents under either lease or outright sale. The airlines’ mainframe computers were oper­ated by the airlines, telecommunications equip­ment connected the airlines’ computers with the travel agents, and the travel agents equipped their offices with computer terminals and printers.

Eastern was losing money in 1983, so much so that insolvency appeared to Frank Borman, the first American astronaut to orbit the earth and Eastern’s CEO, to be a distinct possibility. The rigors of deregulation, along with the serious eco­nomic situation that existed in the early 1980s, were taking a toll. Borman, like others in the industry, went to the rank and file with pleas for help in the form of “givebacks,” or voluntary wage cuts, in order to meet the emergency. Reluctantly, the pilots and the flight attendants cooperated, but the machinists did not. In fact, they demanded and got a 32 percent wage increase on threats of a strike, which created a rather incongruous situation among the respective crafts. The pilots were not happy, nor were the flight attendants, and morale plummeted. And Eastern continued to lose money.

In 1985, Eastern’s debt approached $2.5 billion and income was dwindling. But East­ern had a computer reservations system. Texas Air was still flush with cash but Lorenzo still did not have his own CRS. Lorenzo offered to supply the needed cash to Eastern through a straight buyout. Because of Lorenzo’s reputa­tion, neither management nor the employees favored this idea. Borman desperately sought ways to right the ship, appealing to the work­ing crafts for even more concessions, but it was clear that without the support of Charlie Bryan and the machinists, there was little hope. With all options exhausted, Borman and the Eastern board of directors, at a midnight meeting, reluctantly agreed to the sale to Texas Air. While awaiting government approval for the Eastern purchase, Lorenzo turned his attention to People Express.

The Civil Rights Act of 1964-Title VII

Title VII of the Civil Rights Act barred employ­ers from discriminating against both employ­ees and job applicants on the basis of sex, race, national origin, or religion.3 The statute contained an exception known as the “bona fide occupa­tion qualification” (BFOQ), which recognized that there are “certain instances where religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enter­prise.” This exception provided a “gray area” that allowed an argument for the airlines to continue current employment policies, but it also provided a “wedge” issue to the unions to seek the com­plete elimination of discrimination against stew­ardesses in employment.

The agency charged with administering Title VII of the Civil Rights Act is the Equal Employment Opportunity Commission (EEOC). Stewardesses wasted no time in filing charges of sex discrimination against the airlines, citing age ceilings and marriage bans. The “no-mar­riage” rule was the first to fall when a grievance filed against Braniff, alleging discrimination under its work rules, resulted in September 1965 in a ruling favorable to the union, citing Title VII. This was followed later the same month by the EEOC issuing its general guidelines on sex discrimination, finding that the firing of

female employees for marriage was discrimina­tory when the policy was not also applied to male employees.

Agency rulings are often only way stations to the ultimate resolution of the issue(s) under consideration. And so it was with the major issues being contested by stewardesses, which included limitations on marriage, age, weight, height, and appearance. The contest between the airlines and female cabin employees or their unions gyrated around the filing of grievance procedures under the Railway Labor Act, filing civil actions in the federal courts based on federal statutes and the BFOQ exception, providing testi­mony in hearings before Congressional commit­tees, and appearances in hearings before various state agencies.

These efforts continued with mixed results as to the particular limitation at issue, until the case of Diaz v. Pan Am4 was brought in the fed­eral court in Florida in 1971. The sole issue in this case was whether or not sex was a bona fide occupational qualification for the flight attendant occupation. Efforts by men to enter this class of airline employment had been resisted by the air­lines ever since the advent of Title VII, and in the Diaz case the plaintiff was a man.

The federal trial judge ruled with the airline, basically saying that the BFOQ exception requir­ing females as cabin attendants was valid in the airlines for cabin service. You will recall that, in these pre-deregulation days, most air travel was by businessmen, and as long as the airline could show that having females in the cabin for service was better for business than having men, then the BFOQ exception was deemed valid. The trial court specifically found that the performance of female attendants was better in that they were superior to men in “providing reassurance to anx­ious passengers, giving courteous personalized service and, in general, making fights as pleasur­able as possible within the limitations imposed by aircraft operations.”

This case was reversed on appeal5 by the Fifth Circuit Court of Appeals in 1971. The court noted that the preference of passengers was not sufficient to justify the exclusion of males in cabin service, given the statutory language requir­ing “necessity” in order to support exclusion. The court also noted that Pan Am, at the time this case was brought against it, already had 283 male stewards employed on some of its foreign flights.

Stewardesses would become flight atten­dants as a result of this case.

Still to come were the battles over weight and appearance limitations of female cabin atten­dants, and on the further polarizing limitation regarding pregnancy. In 1978, Congress passed the Pregnancy Discrimination Act as an amend­ment to Title VII. Henceforth, pregnancy had to be treated on the same basis as other temporary worker disabilities.

The Sherman Antitrust Act-Price Fixing and Trusts

Shortly after the appearance of large corporations in the late 19th century, particularly the railroads, it was deemed to be in the public interest to pre­vent concentrations of power that interfered with trade or reduced levels of economic competition. The Sherman Antitrust Act (1890) essentially prohibits any activity that:

1. Fixes prices

2. Limits industrial output

3. Allocates or shares markets

4. Excludes competition

This activity can be in the form of combina­tions of cartels, or agreements between corpora­tions or individuals to accomplish any of these purposes. These combinations are often referred to as trusts. The second essential prohibition of the Act is to make illegal any attempt to monopo­lize any part of trade or commerce by any indi­vidual or corporation.

There is no “bright line” test as to what activity constitutes a violation of the Act, and it generally requires a court test and a judicial decision to settle the question of whether or not a specific activity is a violation of the Act. Per­ceived violations of the Act are enforceable by the Department of Justice through litigation in the federal courts.

■ The Clayton Antitrust Act-Mergers, Acquisitions, and Predation

In 1914, Congress supplemented the Sherman Act by passing the Clayton Antitrust Act, which prohibits:

1. Companies within the same field from hav­ing interlocking boards of directors (thus, essentially the same management)

2. Forms of price cutting (predatory pricing) or other pricing discrimination

3. Acquisition of stock or assets of one com­pany by another if the acquisition tends to lessen competition or to create a monopoly

Enforcement is carried out jointly by the Department of Justice, Antitrust Division, and the Federal Trade Commission.

fll The Civil Aeronautics Act and the Department of Justice

When the airline companies first appeared during the 1920s and 1930s, it was rightly presumed that they were subject to the same antitrust laws as everybody else. The Department of Commerce had jurisdiction over the railroads and regulated that industry through its agency known as the Interstate Commerce Commission (ICC). When commercial aviation began, what little regulation there was of the airlines was also administered in the Department of Commerce, first by the Aero­nautics Branch and then by the Bureau of Com­merce and finally by the ICC.

In 1938, as commercial aviation expanded and became more important to the nation, the airlines came under the special legislation of the Civil Aeronautics Act, applicable only to the air­lines, and that law was administered by the Civil Aeronautics Board (CAB). Although the Sherman and Clayton Acts did not specifically address the antitrust aspects of airline operation, the Federal Aviation Act of 1958 gave the CAB authority to approve all airline mergers and consolidations1 and granted certain exceptions from the Sherman Act and other antitrust laws.2 The broader question of whether, or to what extent, the airlines were sub­ject to the Sherman and Clayton Acts was an open one until finally settled in 1963.

The Justice Department had long maintained that it had antitrust enforcement authority over the airlines, and the DOJ brought suit against Pan American and W. R. Grace & Co., as well as their jointly owned subsidiary, Pan American – Grace Airways (Panagra). In defense, the airlines contended that the Civil Aeronautics Board had exclusive authority over airlines, including anti­trust matters, and that the Justice Department had no authority to bring the action. The lower federal court sided with the Justice Department, holding that Pan Am had violated the Sherman Act by combining with its subsidiary, Panagra, in agree­ing not to parallel each other’s South American routes, effectively agreeing not to compete. In Pan American World Airways, Inc. v. United States,3 the Supreme Court reversed the lower court holding and established that the CAB had primary jurisdiction over the airlines in matters of “unfair practices” and “unfair methods of compe­tition,” as well as to consolidations, mergers, and acquisitions. This became established law and remained so until the CAB was legislated out of existence effective January 1, 1985, by the provi­sions of the Airline Deregulation Act of 1978.

Before deregulation, mergers of airlines were rare. The largest was United Airlines and Capital Airlines in 1961. The norm was repre­sented by Delta’s acquisition of Northeast in 1972 based on the “failing airlines” doctrine of the CAB. Simply stated, the “failing airlines” doctrine described the CAB practice that pre­vented any airline bankruptcies during regulation by “allowing, encouraging, and arranging” for stronger carriers to absorb weaker ones.

Air Traffic Control

The commercialization of air traffic control is a much more difficult subject to broach than is the privatization of airports. The world leader in private aviation is the United States, and the

United States remains the chief training venue in the world for both U. S. and foreign civilian pilots, with its training facilities, cheaper avia­tion fuel, good weather, and vast territory. The very large civilian private pilot population of the United States and its chief lobbying representa­tive, the Aircraft Owners and Pilots Associa­tion, along with general aviation business aircraft operators and their organization, the National Business Aircraft Association, are dedicated to keeping the skies over America basically free from government-based user charges (other than aviation fuel taxes and landing fees at some air­ports). The airlines are on the other side of this issue, advocating the inclusion of general avia­tion aircraft in a regimen based on usage. A sys­tem of user charges has historically been utilized in any commercialization of АТС services. The question of commercialization of АТС services, therefore, becomes a very real political issue.

The fact remains that in the United States the FAA, like airports, is a governmental-funded undertaking. The FAA budget in the United States for the fiscal year 2011 was somewhere around $16.4 billion. Of that total, $9.7 million went to “operations,” which includes $7.6 billion for air traffic control operations, $1.3 billion for safety regulation and certification, $3.3 billion for capital investments in АТС facilities, equip­ment, and research (which presumably includes NextGen expenditures) and the rest for grants to state and local governments for airport investments.

According to the Government Accounting Office consistently over the years, the FAA has also been criticized as not being set up to effec­tively manage the development of large projects, resulting in delays and cost overruns on major technology developments and their implementa­tion. The Advanced Automation System project, for instance, was begun in the early 1980s at a projected cost of $2.5 million to be completed in 1996. By 1994, project costs were estimated to be $7.6 billion and the project was seven years behind schedule. A study by the DOT’S Office of Inspector General in 2005 reviewed 16 other major АТС projects and found that the combined costs had gone from $8.9 billion to $14.5 billion.9 Many of the same concerns are heard about FAA management acumen and pro­cedures as the NextGen overhaul proceeds. The question occurs whether private enterprise could do the job better.

While there is no doubt that commercializa­tion of АТС services is a global trend, the ques­tion remains whether it is the right answer for the United States. The commercialization of АТС services has been an expanding phenomenon elsewhere in the world since 1972. By 2005, at least 40 countries had fundamentally restructured their АТС systems. All of these countries have shifted from a tax-funded base to direct user fees. In a 2009 article based on a study compar­ing 10 commercialized АТС systems with the FAA АТС system,10 the author concludes that the commercialized systems improved service qual­ity, modernized workplace technologies, main­tained or improved safety, and reduced costs. The study also concludes that other risks of com­mercialization, such as erosion of accountability to government, deterioration of labor relations, or worsened relationships between civil and mili­tary air traffic controllers, did not materialize.

The study includes analyses of air navigation systems of Australia, Canada, France, Germany, Ireland, the Netherlands, New Zealand, South Africa, Switzerland, and the United Kingdom, contrasting those with the FAA system in the United States. Among the advantages of reform­ing their air navigation systems as compared to the FAA system were the still lingering problems in the FAA of failing to take advantage of off-the – shelf solutions to problems, overdevelopment, duplicate procurement systems, political interfer­ence that resulted in building unneeded facili­ties, inability to apply business principles, overly bureaucratic and inefficient approval processes, and little client input to help establish priorities.

The labor record at the FAA has also been a problem impacting costs. From the period of the 1960s, some degree of labor unrest has been seen. In 1969, members of the controllers’ PATCO union began the strategy of isolated “sick ins,” and in 1970 some 3000 controllers took part in an organized “sick in” causing extensive disruption in the nation’s air traffic system. These strategies con­tinued through the 1970s, and culminated with the PATCO strike in 1981, discussed in Chapter 29.

Today, FAA employees involved in opera­tions number some 43,000, who are paid a total of $6.5 billion in wages and benefits, or about $151,000 per employee. Controllers, as a group, have compensation packages of about $166,000 each, per year. Labor accounts for two-thirds of the cost of FAA operations.11

Fleet

Airlines reduced the number of aircraft in their fleets by retirement, sale, or simply parking the airplanes. Especially targeted were less fuel – efficient and maintenance-intensive aircraft. The overall U. S. fleet was over 5,600 airplanes in 2000, but by 2003 there were only 4,479, a 20 percent reduction. Orders on new aircraft were reduced, down by over 100 airplanes at the end of 2002 as compared with the end of the second quarter of 2001. (See Figures 35-15 through 35-16 and Table 35-2.) At the end of 2006, the fleet still comprised only 4,339 aircraft.

Restructuring

At the end of 2002, only two major airlines ended up in the black. Southwest reported
profits of $241 million, and JetBlue reported $55 million. The remainder of all major U. S. air­lines reported substantial losses: American, $3.5 billion; United, $3.33 billion; Delta, $1.3 billion; Northwest, $766 million; Continental, $451 mil­lion; U. S. Airways, $1.66 billion. The combined losses of the industry exceeded $10 billion. It was no coincidence that the profitable airlines were the “no frills” low-cost carriers, and the unprofitable ones were the legacy airlines.

Traditionally, the legacy airlines’ largest cost of doing business has been wages and benefits of the rank and file employee, almost all of whom are represented by labor unions. The terms of union contracts control both wages and work rules, nei­ther of which can be unilaterally changed by air­line management. Yet, these were exactly what the airlines needed to change before any significant or long-lasting recovery could be expected. This was especially true since the cost of fuel, which has traditionally been the airlines’ second highest cost of doing business, continued to spiral upward.10

Beginning in 2002, the legacy airlines again resorted to the Bankruptcy Code as their last hope of survival. As the decade progressed, some critics said that Chapter 11 was becoming a man­agement tool, but the fact is that restructuring

Fleet

6/30/01

12/31/01

6/30/02

12/31/02

Change

B727

480

333

259

224

(256)

MD80

631

573

561

554

(77)

DC10

133

111

96

72

(61)

DC9

311

274

272

268

(43)

DC8

118

80

78

77

(41)

F100

114

96

74

74

(40)

B717

28

43

13

13

(15)

L1011

20

15

13

13

(7)

B747

174

174

170

168

(6)

B737

1,296

1,277

1,303

1,294

(2)

A330

9

9

9

9

MD90

16

16

16

16

A310

41

43

46

45

4

A321

19

23

28

28

9

MD10

12

12

16

22

10

MD11

51

53

56

62

11

A300

89

94

101

104

15

B777

110

119

129

129

19

B767

333

344

359

363

30

B757

579

600

615

623

44

A319

158

177

196

210

52

A320

228

251

267

284

56

TOTAL

4,950

4,717

4,677

4,652

(298)

FIGURE 35-15 Airline fleet by type.

of the type that had to be done could only be accomplished in reorganization in a bankruptcy court. Before it was over, every legacy airline would enter Chapter 11 bankruptcy.

The air carrier industry briefly returned to profitability in 2006. By then airline employment

had declined to 544,540, down from a high of

680,0 in the year 2000. Airline capacity, mea­sured in available seat miles, had been reduced by more than 25 percent by aircraft retirements. But profitability since then has been elusive. Next we will take a look at the airlines in bankruptcy,

etc

and how mergers have shaped the industry. But to put things in perspective, we need to briefly review how the airlines got to this point.

TIS-B and FIS-B

The FAA ground station receiving the airborne data rebroadcasts back to the sky once every second. This data broadcast is called TIS-B. The ground station also broadcasts additional flight information such a graphical weather display and NOTAMS. This data is called FIS-B.

There are three distinct benefits of ADS-B over radar:

1, GPS reported positions are more accurate than radar and more frequently reported. Unlike radar, ADS-B accuracy does not seriously degrade with range, atmospheric conditions, or target altitude. Update inter­vals do not depend on the rotation speed or reliability of mechanical antennas. This means that closer spacing can be used than presently, and this provides much needed capacity improvements in congested airspace.

2, ADS-B is less expensive to deploy than ground radars. ADS-B can also be deployed in areas where there was previously no cov­erage by radar, for instance, ocean routes and the Gulf of Mexico, where only proce­dural separation could be employed. These areas can now receive air traffic control separation and free up needed airspace.

3, Other aircraft with ADS-B In equipage can receive the ADS-B broadcast to facilitate aircraft avoidance.

The totality of NextGen benefits will depend on the successful development of FAA ground – based systems, space-based systems, alterna­tive fuels, engine and airframe improvements, advanced avionics capabilities, and airport infrastructure.

Implementation Process

The FAA published its Roadmap for Perfor­mance-Based-Navigation in order to detail three periods of implementation: Near Term (2005­2010); Mid Term (2011-2015); and Far Term (2016-2025).

By 2012, most of the Near Term objec­tives for implementation had been achieved. The ADS-B ground-based infrastructure had more than 400 ground stations operational. These sta­tions were providing satellite-based surveillance coverage for the east, west, and Gulf Coasts and most of the area near the U. S.-Canadian border (see Figure 36-1). АТС is already using this foundation NextGen technology to sepa­rate equipped aircraft at several areas, including Uouisville, Kentucky; Juneau, Alaska; Flouston; and Philadelphia. The total complement of 700 ground-based stations is expected to be opera­tional by 2014 and will allow controllers to use the airspace more efficiently.

A significant volume of PBN arrival and departure procedures for commercial airports, as well as high and low altitude en route charts, have been published. Access to general aviation airports has been improved through the publica­tion of PBN approach procedures using Area Navigation Wide Area Augmentation System (WAAS) Uocalizer Performance with Vertical Guidance (LPV) charts. LPVs are operationally equivalent to Instrument Uanding System (ILS) approaches but require no costly infrastructure or maintenance. As of February 2011, there were 2,772 LPVs at 1,400 airports nationwide.

Convention for the Suppression of Unlaw­ful Acts against the Safety of Civil Aviation (Montreal Convention-1971)

This Convention is concerned with unlawful acts other than those relating to the seizure of aircraft. The treaty defines a variety of acts deemed to constitute prohibited acts and makes those acts punishable by severe penalties. By a supplemen­tary Protocol in Montreal in 1988, the enumera­tion of prohibited acts was expanded to include specific acts committed at airports serving inter­national civil aviation.

Plastic Explosives Convention (Convention on the Marking of Plastic Explosives for the Purpose of Detection-1991)

The aim of this Convention is the prevention of unlawful acts involving the use of plastic explo­sives. Signatory nations are required to adopt measures to ensure the marking of plastic explo­sives that will assist in detecting such explosives. Specifically, the manufacture of plastic explo­sives is to be regulated to prevent the distribution of unmarked explosives, to provide for control of

the transfer of marked explosives, and for their destruction under time limitations. The Conven­tion contains specific descriptions of the con­cerned explosives, the detection agents to be used in marking them, and it creates an International Explosives Technical Commission to keep track of developments in the manufacture, marking, and detection of the explosives.

The Cape Town Convention on international Interests in Mobile Equipment and Related Aircraft Protocol-2001

This treaty relates to the financial transactions involving certain aircraft, airframes, engines, and helicopters and provides for a registration sys­tem that tracks ownership and security interests in such mobile equipment on an international basis. The FAA registry is concerned with United States aircraft and registry, while the Cape Town Convention and the International Registry it cre­ated effectively deal with the problems related to the international movement, sale, leasing, and recordation of such interests. The law created by these international instruments coexists with the law of the United States regarding these interests.

Beijing Convention-2010 (Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation)

European Aviation Safety Agency (EASA)

EASA became operational in 2003 under Euro­pean Parliament and Council authority. It is an independent EU body accountable to the Member States and the EU institutions. Its responsibil­ity is aviation safety and aviation’s impact on the environment. It reached full functionality in 2008 when the functions of the former JAA were incorporated into EASA.

While EASA has taken over the respon­sibilities previously performed by JAA, there are differences. EASA has regulatory authority from the European Commission, the Council, and the Parliament, while JAA’s operations were conducted under coordinated laws of the several Member States of the EU. EASA regulations have the direct force of law.

EASA’s main tasks include:

• Rule-making, that is, drafting safety legisla­tion for the European Commission

• Standardization programs and inspections to insure uniform implementation of EU avia­tion safety legislation in all Member States

• Type certification of aircraft, engines, and parts

* Data collection, analysis, and research to improve aviation safety

* Licensing of crews within the EU, certifica­tion of non-member States’ airlines, as well as playing a key role in the safety regulation of airports

* The agency is also developing close work­ing relationships with safety organizations in other countries (like the FAA) and with ICAO with the goal of harmonizing safety standards and procedures.

■ European Air Traffic Control

European air traffic control after World War II was similar to jurisdiction of everything else in Europe, a matter of the sovereign control of each separate government, with interaction between nations being dictated by treaty. The same impediments to unification seen elsewhere pre­vailed in attempts to create a system of air traffic control for the European continent. Movement of aircraft across borders involved air traffic control of both countries, with no central flow system.

Centralization of air traffic control was the beneficiary of advances made in other sectors of the growth of the EEC, which ultimately culmi­nated in the formation of the European Union. As advances were made in those other sectors, an infrastructure for air traffic control was also being built. Navaids were installed, routes were created, rules and regulations for flight and con­trol authority were established. The separate States relied on past treaties (Paris Treaty of 1919), the First Convention Relating to the Regu­lation of Aerial Navigation (signed by 27 States in 1919), the International Civil Aviation Confer­ence, and then NATO to coordinate military use of the airspace.

In 1958, seven States8 set up the Technical Working Group “Eurocontrol” composed of civil and military representatives. Basically filling a vacuum due to the absence of any orchestrated plan between the States of Europe, Eurocontrol grew, receiving authority to establish centers, facil­ities, data processing, establishing communica­tions networks between States and their governing authorities, and generally building other necessary infrastructure to handle air traffic management over and beyond the borders of Europe.

Harmonization and integration was facili­tated under the auspices of ECAC during the 1980s and by the creation of the Central Flow Management Unit (CFMU). That system under Eurocontrol became responsible for all traffic control flow management for the entire continent in 1996.

In 1999, the European Commission announced the creation of the “Single European Sky” (SES), requiring a developmental approach involving Eurocontrol interim cooperation and assistance and the preparation for the assumption of a primary role in the “Single European Sky” concept. Traffic handling was still very much a national, sovereign affair, and Eurocontrol opera­tion was separated among five regional flow management centers, all operated by their own national administrations.

SES is an ambitious initiative to reform the architecture of European air traffic control and to meet future capacity and safety needs.

In 2004, the Council and the European Parlia­ment endorsed the Single European Sky legisla­tion that will integrate all European air traffic control in the European Community. A package of four regulations is included in this enabling legislation.

1. The framework regulation: This sets out the overall objectives for the Single European Sky initiative—“to enhance current safety standards and overall efficiency for general air traffic in Europe, to optimize capacity meeting the requirements of all airspace users and to minimize delays.”

2. The airspace regulation: This concerns the use and organization of airspace, both for the civil and military requirements of Mem­ber States.

3. The service provision regulation: This mandates that common standards are to be applied for all navigation services provided.

4. The interoperability regulation: This looks to insure the integration of all systems from whatever source. The systems include eight areas: airspace management, air traffic flow management, air traffic services, communi­cations, navigation, surveillance, aeronauti­cal information services, and meteorological information.

This is a work in progress. The final prod­uct will include the standardization of air traffic systems across Europe, the common licensing of air traffic controllers, and the reconfiguration of European airspace into functional blocks irre­spective of national borders. The original concept of SES has been reformed (amended) in a com­munication known as Single European Sky II (2008), which more clearly defines the goals of SES to be based on four pillars:

1. Performance, to include reductions in delays and shortening of routes, creation of func­tional airspace blocks (FABS) designed to meet these performance objectives, slot allo­cation and deployment of the SESAR (like NextGen performance-based navigation).

2. Safety, to extend EASA authority to aero­dromes, air traffic management, and air nav­igation services.

3. New technologies, or the implementing of SESAR and its benefits.

4. Managing capacity on the ground to insure airports’ capacities comport to ATM capacity.

The intent is to perform an internal reform of Eurocontrol to align it with the government structures of Single European Sky. Assuming this can be done, Eurocontrol will proceed to implement these policies.

Excerpts from the Address of Dr. Alexander Graham Bell in Presenting the Langley Medal to Mr. Gustave Eiffel and to Mr. Glenn Curtiss in 1913

4 n the sixth of May 1896 a steam engine provided with wings made a successful flight in the air over the Potomac River at Quan – tico, Virginia about sixty miles from Washing­ton, D. C. There was no man in the machine, yet it pursued its way steadily through the air, continually rising until its power gave out, when its propeller stopped and it descended so gently to the water that it was immediately ready for another flight.

The second flight was equally success­ful, and though the total distance was not great, barely exceeding one half mile, it succeeded in demonstrating to the world the practicability of mechanical flight by machines heavier than the air and driven by their own motive power.

The production of this machine was really the culminating point of the researches of the late Secretary of the Smithsonian Institution, Dr. Samuel Pierpoint Langley, and the Smithson­ian Institution very properly celebrates the sixth of May as “Langley Day.”

For many years before 1896 Professor Langley, being assured in his own mind of the practicability of mechanical flight had devoted
himself to scientific experiments with aero­planes, that is, with flat surfaces or planes driven edgeways through the air, at varying angles of incidence to the horizon. In his usage the aero­planes, while applicable to the wings of a fly­ing machine, was not applicable to the machine itself. The machine as a whole he called an aero­drome, from the Greek work aerodromos, “tra­versing the air.” In the terminology employed by him aerodromics is the art of traversing the air— the art of aerial locomotion; and an aerodrome was a machine for traversing the air.

The knowledge that so eminent a man as the Secretary of the Smithsonian Institution, believed in the possibility of mechanical flight and was carrying on scientific experiments to attain that end, proved a great stimulus and encouragement to many less eminent men who were working along the same lines under the discouragement and ridicule from the incredulous world… I was the only witness of this remarkable flight outside of the workmen employed. I may perhaps be pardoned for saying a few words about it. Profes­sor Langley had met with so many failures that, though hopeful, he was somewhat doubtful of the
result, and he invited me to witness the experi­ment on the condition that I was the only man he knew whom he could bear to be a witness of a failure.

I found a houseboat containing all his appa­ratus anchored in the little Bay of Quantico and, on the roof, his machine was arranged ready to be shot off by a huge catapult. It was a huge model, thirteen feet from tip to tip, . . . and six­teen feet from head to tail, the whole propelled by a wonderfully light steam engine of Professor Langley’s own design.

I had a boy row me out on the bay where I thought I could get a good snapshot of the machine when it leaped into the air, while Pro­fessor Langley, too nervous to be close to the scene of operations, retreated to the shore, and I saw him standing lonely on the end of a little pier with the wooded shore behind him.

Then the whirr of the propellers was heard and the catapult was released causing the machine to shoot out into the air almost hori­zontally. Then came the critical moment. Would it fall into the water? Would it strike against the trees that surrounded the bay? Or would it ascend and clear them? The queries were soon answered. For the huge bird-like machine gracefully soared from twenty to thirty feet above the tops of the trees, turning slightly as it rose, and made a beautiful flight of over half-a-mile, when the steam was exhausted the propellers stopped and it began to come down.

The descent was as fascinating as the ascent, and it glided gracefully to the surface of the water. The workmen employed hailed the suc­cess of the experiment with loud cheers, in which I joined. It was picked up and found to be practi­cally uninjured except for a wetting. The experi­ment was then repeated with even greater success than before.

The prophecy received its fulfillment but not until the beginning of the twentieth century. In 1898 the Board of Ordinance & Fortification, after carefully studying the flight of 1896, appropriated $50,000 to enable Langley to experiment with a full sized aerodrome carrying a man. This was not completed until 1903, and on August 8 of that year a quarter-sized model of it propelled by a gasoline engine made a beautiful public flight.

On September 7, 1903, the full-sized aero­drome, carrying Mr. F. W. Manley, as aviator, was tried on the Potomac, but when the cata­pult was released, the aerodrome sped along the track on the top of the houseboat attaining suf­ficient headway for normal flight; but at the end of the rails it was jerked violently down at the front, and plunged headlong into the river. It was subsequently discovered that the guy post that strengthened the front pair of wings had caught in the launching ways, and bent so much that those wings lost all support.

A second launching was attempted on the Potomac River near Washington, on December 8, 1903. This time the rear guy post was injured, crip­pling the rear wings, so that the aerodrome pitched up in front and plunged over backwards into the water. Fortunately the aviator, Mr. Manly, received no injury in either case.

It will thus be seen that Langley’s aero­drome was never successfully launched, so that it had no opportunity of showing what it could do in the air. The defect lay in the launching mecha­nism employed and not in the machine itself, which is recognized by all experts as a perfectly good flying machine, excellently constructed and made long before the appearance of other machines.

Langley’s efforts at aviation were received with public ridicule, and he found it impossible to obtain the necessary funds to try the experi­ment again. Professor Langley was of a very sen­sitive nature and the public ridicule with which his efforts were received had a good deal to do with the illness which caused his death. Not very long after the accident he received a paralytic stroke, and after partially recovering from this, another stroke ended his life in 1906. . . .

The second and last trial of Langley’s aerodrome occurred December 8, 1903, and on December 17 of that same year, the Wright brothers made their first flight in their gliding machine provided with a 16 HP engine and two screw propellers. Little or nothing was known of this flight by the general public. The Wright brothers removed their machine to Dayton, Ohio. During 1904 and 1905 numerous flights were made in Dayton, Ohio, culminating in a flight of eleven miles on September 26, 1905. These were all in secret. After this, field practice with them ceased for more than two years to enable them to preserve the secrecy which they had hitherto maintained.

A few statements concerning their success leaked out into the public press, but were gener­ally received with incredulity and unbelief.

A competent scientific investigator was sent from France to Dayton, Ohio to investi­gate the truth of the rumors that had appeared in the newspapers of success that had found their way into the press. He was unable to obtain any definite information concerning the trials that had been made, but by interviewing the neighboring farmers he was able to satisfy himself that flights had actually been made, and so reported to his principals in France, and it was from France that America received the first authentic news that the Wright brothers had actually flown.

Then M. Archdeacon stirred up the patri­otic spirit of the French, not to be beaten by America, and offered his prize… of FF3000 to be awarded to the first person who should sail or fly twenty-five meters, under certain conditions.

The whole art of aerial locomotion origi­nated in France. In 1783, the Montgolfiers produced the balloon, their hot air balloon, and in the same year M. Charles and the Brothers Roberts gave us the hydrogen balloon. After the lapse of 100 years, Nadar issued his cel­ebrated manifesto in which he advocated the heavier than air flying machine, rather than the balloon, and started the controversy between the lighter-than-air and the heavier-than-air camps, which has lasted to our day, and is not settled yet. . . .

On August 22, 1906, M. Santos-Dumont made a tentative flight in his new “aeromobile,” and on October 23, 1906 he ran this strange machine swiftly over the ground and glided boldly into the air, flying above the excited spec­tators at a speed of twenty-five miles an hour, and covering a distance of two hundred feet, thus gaining the Archdeacon Cup.

This was the first public flight in the world, made without any certain knowledge of the pre­vious secret flights made by the Wright brothers in America.

From this time the French have been fever­ishly active in the field of aviation. In October 1907 the Aerial Experiment Association was organized with the object of constructing a prac­tical aerodrome, driven through the air by its own motive power, and carrying a man. This was a mere experimental association, financed by my wife, and consisting of the late Lt. Selfridge, Mr. F. W. Baldwin, Mr. Glenn H. Curtiss, Mr. J. A. D. McCurdy and myself. On March 12, 1908, the Association succeeded in raising its first aerodrome, the Red Wing, into the air from the ice on Lake Keuka, near Hammondsport, N. Y. Mr. F. W. Baldwin was the aviator on this occasion, which constituted the first public flight of an aerodrome in America. The Wright broth­ers, of course, had previously flown, but nothing was known with certainty at that time concerning their achievements. Then in that same year, 1908, the Wright brothers for the first time appeared publicly in flight. Wilbur Wright in Europe, and Orville Wright in America, startled the world with their achievements, and proved themselves to be the master of their art. . . .