The Dallas Morning News covers American Airlines’ attack on Dallas-based aviation startup JSX. American has piled on pilot union lobbying which doesn’t like that the air carrier is allowed to,
- offer a better and more convenient product
- using retired senior captains from American and Southwest, and relatively green first officers who can use JSX as a way to build up flying hours while being paid and eventually expand the pool of commercial pilots
American and Southwest, for their part, face competition in their home market. JSX is allowed to offer convenient scheduled service from private terminals, using their own security (which includes scanners, bag swabs, and ID verification), because they operate with no more than 30 seats per aircraft. American is explicit that their concern is the competitive advantage this gives to JSX:
American Airlines sent a letter asking the Department of Transportation to give clarity to the emerging business model because carriers such as JSX are “drawing on less stringent regulatory requirements to gain competitive advantage.
This is especially rich.
- While I disagree with the ruling, a federal judge literally just ruled that American Airlines violated competition laws by colluding with JetBlue to divvy up markets in the Northeast.
- American Airlines is part of a government-granted and subsidized cartel given – for free – exclusive rights to fly in and out of the nation’s busiest airports. They have slots at New York JFK and LaGuardia, and the majority of slots at close-in Washington National. Other airlines are not permitted to simply add flights and compete against them.
- American Airlines was given $10 billion in pandemic subsidies by taxpayers.
- Cronyism is nothing new to American, indeed long-time President C.R. Smith obtained government financing for the airline’s first major aircraft order from the Roosevelt administration. He had introduced FDR’s son to his second wife and was best man at their wedding. He was close to Lyndon Johnson and served as Johnson’s Secretary of Commerce, and he’s credited with lobbying the FAA to impose mandatory retirement on pilots in order to remove older more expensive labor from his payroll and replace them with cheaper workers.
Somehow they have the temerity to argue that an operator of 37 regional jets is an unfair competitor because the law allows them to offer a better customer experience and American has no desire to replicate it.
In arguing that there ought to be a single standard for pilot training and security screening, disallowing business models than benefit from pilots with fewer hours of training, senior captains over 65, and their own security screening, critics are saying that:
- Residents of small cities, which are losing air service due to a shortage of pilots, should have to make long drivers (whether to their destination or other airports) when driving itself is less safe.
- Only the wealthy deserve to skip TSA, since they don’t argue that TSA ought to staff private terminals and screen passengers on private planes.
Former Congressman Pete DeFazio (D-Airlines For America), who chaired the House Transportation Committee, retired from the House six months ago, and now lobbies on transportation issues, argued against the training requirements prevalent in Europe to become a pilot noting that “it requires almost three times as many hours to become a hairdresser in Oregon, than it did to become a co-pilot.”
Oddly he never thought that meant there was something wrong with his home state’s occupational licensing rules for barbers and cosmetologists. Only about 25% of cosmetology training is related to health or safety. In 2019 still-undeclared candidate Biden focused on the ridiculousness of state barber licensing requirements.
DeFazio, shilling for the industry he used to oversee in Congress, misrepresents JSX:
JSX has found a way around the law with their business model,” DeFazio said. “SkyWest is attempting to emulate that, for the most part. They would go through security, but they would avoid the uninterrupted rest, duty time restrictions, and they would also avoid the training requirements. It’s a real concern.
They haven’t found a way around the law they have found a way to offer a better product to consumers that fully complies with the law. And major airlines don’t like competition, especially when it means having to offer a better product.
This really feels like clickbait.
Referencing CR Smith government aircraft loans in the… 1930s… to prove an unmade point about AA cronyism…? Really?
There is a legitimate argument around why planes with 30 people require entirely different pilot training, rest arrangements, and security arrangements than a plane with 31. Is there something magical about adding a toddler on board that makes training and government-run security arrangements important?
@MaxPower what is magical is how the lobbyists work their magic to get rules like this implemented.
Not sure how AA can make this argument when JSX operates an entirely different business model. All business-class. Planes carrying 25% oft the pax AA’s smallest mainline jet can carry. Point-to-point without connections.
AA is the worst. They engage in anti-competitive business all the time and then scream bloody murder when someone has a better business model. Personally, I’m waiting for JSX to find its way to FLL and ORD/MDW.
Quit talking, yet again, about the Covid subsidies which went to airlines, and 10’s of thousands of small businesses.
These were not gifts to the airlines or to yoga studios and roofing contractors. These expenditures kept the economy from collapsing and leaving the US with a decade -long recovery as happened with Japan after the 2008 financial collapse.
Without the payroll support that covered 70% of the cost of keeping airline employees on the payroll, with airlines paying the other 30% for having the employees do nothing, there would be nothing for you to write about today because the industry would have collapsed.
Sober Doc,
To be clear… which rules do you have an issue with? Government-run/administered security checks? Pilot training requirements? Or do you just like that rules in place for passengers on a 31 seat plane are entirely thrown out the window on a 30 seat plane?
Regardless of which security or training requirements are the right ones, what’s the difference between a 30 and 31 seat plane in terms of minimum amount of training? Why is that the line? That’s really the issue. Frankly, it wouldn’t surprise me if AA did get into part 135 flying. This type of push on the actual requirements now would be a very smart move for them before investing in it. Part 135 could enable them to open more small markets and be a great pilot pipeline for their wholly owned regionals but it would be silly to invest in it while there is a rather stark difference that the government would get pressured to fix if an airline like AA got into part 135 flying.
The line between 30 and 31 seat flying and the requirements of each is pretty stark given the difference of a toddler on board dictates the type of pilot training, how old your pilot is, and whether there’s government oversight in securing an increasingly well-known means of transportation known for targeted action from extremists. Say what you will about JSX’ security screening, it’s entirely at their own discretion.
It’s the American way! Corporations are not interested in anything but making money.
Our system rewards those that have enough resources to lobby Congress. We’ve allowed this structure.
@MaxPower I don’t have a dog in this fight, so I have no issues with any of the rules. My point was that rules are often arbitrary and set based on the power and influence of lobbyists, not evidence-based information.
If I were AA I would focus more on fixing my house and less on whining about how disruptive competitors are making it hard for them to continue providing lousy service without consequence. As for the safety rules, I’ll leave those to the experts who, hopefully, are held accountable for their decisions.
@Gary.
I don’t share your opinion on minimum hours, maximum age, or security. But I would like to hear what you think.
What age would you mandate a pilot retire? Would you want any changes to medical standards?
If not a 1500-hour minimum rule, how many hours is acceptable?
Should we change the security for all passengers to what JSX is doing?
As far as AA (or any major) being in a government cartel, so is JSX. And MTG got a government handout too, so not limited to airlines.
@DA Pilit
About 15 years ago I read a study made from all the incidents & accidents. Don’t remember who did the study but it was published in the AOPA magazine.
They looked at every report involving a pilot error and looked at the hours the pilot had when it occurred.
When they drew the graph they saw that the principle of the higher the hours the safer was false.
The hours range with the lowest pilot error rate was 300 to 1000. Above that the “I have done that hundreds of times, I don’t need to xxxx” syndrome was causing more pilot mistakes.
So again, it was proven that the 1500-hour rule has nothing to do with safety. It is just a union/lobbying/political self-serving interest.
C.R. Smith is all about American Airlines at a similar stage to JSX. American Airlines got huge government boosts as it began operation.
And the point about pandemic subsidies is that the government is hardly being unfair to American. And the *second and third* payroll support program payments, representing about half of the payout, were 10x – 15x the amount that covered the payroll of employees who might have been furloughed during their covered periods. That money subsidized shareholders and creditors, not employees.
The federal government should encourage more competition and make it easier for new companies to start in the airline industry.
@Mike.
I can’t see how a 15 year old article in AOPA magazine is “proof”. I have looked and I really don’t see any unbiased study that proves anything either way. I can only go from my own experience. And for you and Gary, what is the flight time that you would suggest? Zero? 500? 750? Any number is arbitrary. I do think if the airlines have an ab initio program the number of hours can be reduced. It will still be arbitrary just as the age to drive and drink are. The FAA came up with 1500 hours in 2010 and it was effective in 2013. It’s only recently that expansion and retirement have caused a supply issue. And flight schools are busy filling those slots. The problem will correct itself.
Two decades ago, another startup challenged AA in Dallas, also offering a superior product by working just below the lower limit of plane capacity to bypass regulations that would otherwise have applied. When lawsuits failed, AA just started competing against them with the same parameters. AA just matched the service, and matched the prices. With AA’s “loyalty” advantage, within a year, Legend was out of business.
And once they were out of the way, AA promptly eliminated their own competing service.
Expect the same here.
@Gary et al. An interesting but unsurprising article. Interesting how many commentators get diverted to the minutiae.
At its core, the issue @Gary complains about is not about AA, it’s about our completely prostituted political system and hierarchy.
Why, we might ask, are recently retired House committee chairs able to lobby so soon after leaving their jobs? Don’t we give them generous pensions and retirement benefits?
So long as we as a nation put up with the outrageous antics of the political class/tribe — this is what we will have to put up with.
I say this as someone who lobbied for his company vigorously to the House and Senate. I was enamored of the time I spent on the Hill. It’s exciting. Until I realized just how jacked up the whole system is. Oh yes, and our country is run by teenagers (you have to visit Hill offices to understand that one).
I only saw one comment that nailed it. The rest all missed the point. America was built on monopolies. From the robber baron days to the Amazon’s of today, it has always been about squashing the competition – especially lobbying politicians for favorable treatment.
One thing America excels at is spin.
We kill competition all the time but spin the story so it sounds like it’s all done for your own good.
Then we get crappy service but blame it on everyone else but ourselves for voting in the same politicians that keep the monopolies going.
Monopoly…The airlines want monopoly and control of the airline industry. Dislike them. But do the middle class have a choice?
@MaxPower – the requirements are laid out. Go read FAR Part 135. There obviously has to be a line between 135 and 121. That line is 30 seats. All you are saying is that it is arbitrary. Maybe so. Would you be happier at 29 seats? 2 seats? Gary’s not making arguments about what rules are the right rules. He’s simply saying JSX plays by the rules, and rather than compete, AA wants to change the rules to outlaw JSX.
If your problem is the rules, then petition the FAA to change them. Good luck.