Regulation Is Good For Incumbent Airlines

A Public Interest Comment on Public Charter Operations

American Airlines and Southwest Airlines are lobbying the federal government to put their Dallas-based competitor JSX out of business. They want the federal government to change regulations to make their business model that lets them fly 30 seat planes out of private terminals illegal. And the FAA is considering this request.

American and Southwest have joined forces with the major pilot union, that wants to stop an expansion of use of the same rules by SkyWest Charter (and potentially others in the future) since those rules allow them to hire recently-retired senior captains from major airlines (the most experienced in the skies) and also co-pilots with fewer than 1,500 hours.

Nobody in a serious position believes that the 1,500 hour rule for co-pilots is key to safety (as opposed to motivated reasoning), and certainly not for short flights on regional jets.

  • No other country has followed the U.S. with this. Europe, without a similar rule, has just as strong a safety record. (U.S. improvements in safety are the result of other changes, including pilot rest rules.)
  • Airlines operating under this regulatory model have a strong safety record.
  • The 1,500 hour rule itself promotes bad habits and doesn’t train pilots for commercial operation. They takeoff and land in clear air from the same airports, open and over. The rule even allows them to rack up many of their hours in a hot air balloon. That balloon can even be tethered.
  • The Air Line Pilots Association is fighting allowing some of those hours from being flown in real simulators and in real commercial flying scenarios, when hours can be racked up in a balloon. The goal is to keep it costly to train real pilots.

The model of having senior pilots with tens of thousands of hours in the left seat and more junior pilots in the right seat is a best practice for safety and training. ALPA and the airlines who are piggy backing on their safety arguments say they want to promote ‘one level of safety’ but that is not true. They want to impose the same formulaic rules rather than promoting actual safety.

  • A regional jet operating short flights doesn’t have the exact same requirements as a long haul flight with inflight rest requirements.

  • Imposing high costs and barriers to entry to becoming a pilot is why there’s a pilot shortage. And it means less air service, and many cities losing air service. That means more people drive (either to their destination or a farther away airport) and that is less safe. On net more people die in car accidents as a result.

This is like putting scrubbers on coal plants. There’s dirty coal from West Virginia, and cleaner coal in the Mountain West. The only way West Virginia Senators (at the time, Robert Byrd) would sign off on scrubbers for coal plants is if they had to be used on clean coal plants where they weren’t needed because West Virginia coal couldn’t be disadvantaged. So coal plants got one level of cleaning rules.

Legendary Silicon Valley investor Bill Gurley (GrubHub, Nextdoor, Open Table, Stitch Fix, Zillow, Nordstrom.com, The Knot and Uber, and played by Kyle Chandler in Showtime’s Super Pumped) gave a talk recently about regulatory capture – that government regulation almost always benefits incumbent businesses. It’s a great talk in its own right, but also perfectly encapsulates what’s happening to upstarts like JSX.

It’s the regulatory capture here that bothers me most, and Stephen Jonesyoung and I submitted a comment to the regulatory docket.

The FAA is considering expanding the scope of some regulations that currently apply to only large commercial airlines to include public charter services. They suggest that the growth of these services justifies the change, but looking at the actual data it doesn’t appear there’s been an increase in public charter travel since relevant rules were first adopted! (Growth in this area is actually meant to be encouraged in any case.)

Changing these rules wouldn’t create a discernable safety benefit, while there are real costs to small communities, to Indian tribes, and to the consumers who value these services who would effectively be put out of business. It’s also not clear that the FAA has the statutory authority to make the changes that they’re contemplating.

We can only conclude from this regulatory history that the FAA’s intent from the commuter rule was not to apply Part 121 rules to public charter operators, because the FAA iden3fied the 1995
text as mistaken.

From the FAA’s descrip3on, it sounds like the FAA concluded that the safety issues present for commuter carriers were not similarly present for public charter carriers and/or that the FAA did not have the legal authority to alter the regula3ons to public charters under the proposed rule. We elaborate on why the FAA may not have had the legal authority to do so…

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Where did you get your information that nobody in a serious position (whatever that is) agrees with the 1500 hour rule? I think the issue here is should JSX be able to operate differently than other carriers. If 1500 hours is changed, it should be for all carriers. Same for security. Shouldn’t every airline follow the same security protocols?
    I think the 1500 hour rule is a good one. But I only have 30,000+ hours and 50 years of pilot experience all over the world. The industry is so much safer than it was in years past, but people still want to lower standards. Now that I only ride as a passenger, I vote no.

  2. @DA Pilit – I am glad you acknowledge the 1500 hour rule isn’t needed, you just think it is unfair it is applied to Part 121 airlines.

    There is a logical reason not to apply it to small jets flying short hops. But agreed it should be repealed since it no other country has followed yet still achieves equally high degrees of safety.

  3. @Gary- You misconstrue what I said. You want the 1500 hours reduced. But to what? Any number is arbitrary and doesn’t fit everyone. But there has to be a number, just like age 65 or 67 retirement.
    And I have no idea why the stage length would matter. You also don’t seem to understand that getting trained in other countries is completely different than the US. Any number needs to be applied to all airlines since they fly in the same airspace. If they change it to 1400 or 1600 it needs to be across the board. Even then someone will slip through the cracks. As someone who rides in the back of commercial airplanes a lot, I can’t understand why you are in favor of fewer safety regulations. Should we also get rid of the TSA? Since I now fly the same way as you do, I’m not in favor of any reductions. IMO, 1500 hours is not a lot of time and it can be reduced to 750 hours with the right type of flying.

  4. @DA Pilit – hours-based training, running up hours, misses the point. Touch and gos in clear air from the same airports teaches nothing about flying in commercial operation. That’s why simulator-based training, which ALPA is blocking, would be *better* than the hours being racked up today.

  5. @Gary- You claim the 1500 hour rule is wrong. So should it be zero hours? And if it’s a number, how did you determine that? I (and the FAA) agree that not all hours are equal, and because of that can be adjusted down to as low as 750 hours. And simulator based training can be valuable to useless. This would have to be structured and monitored.
    If the FAA changes the 1500 hour rule should they go to EASA type of training curriculum since you think that way is better?

  6. Regulation turns out to be better for incumbent airlines than de novo players because the powerful, concentrated interests dominate the regulatory process through effective lobbying and regulatory capture and have greater means to absorb the costs from it while also seeing it used as a hammer to manage competition from those who don’t seem as inclined to follow the signals sent by the industry cartel kingpins.

  7. @DA Pilit – we agree on structured training, monitored in a simulator would be better than the idiotic hours-chasing we have now. And with structured training it’s not clear that a “number of hours as the goal” makes any sense, though there would be a minimum number of hours in which training could be completing. Setting the number of hours out first is the opposite of best way to go, but 750 for all would be better than 1500, a rollback of the hours to pre-2010 levels was fine (the post-Colgan Air crash changes were good in part – fatigue is a real issue – and those changes should be maintained).

  8. It was a typo from Tim Dunn.

    I’ve been making more of those as of late too, so I’ll be forgiving if it’s just a typographical error. 😀

    What’s coming with the DOT/FAA’s examination of self-piloting mini air taxis? Are they more or less open to such capability coming online than they were a few years back?

  9. holy cow, Gary
    you clearly are a highly impulsive person on a good day but when GU picks up a typo by reading a second post which is a correction, you highlight your own weakness.
    On a normal day, you don’t even bother to correct your errors

    you do realize that I congratulated you for your efforts, don’t you?

  10. @Tim Dunn i’m genuinely not sure what you’re talking about but if you meant the opposite of what you wrote then you’d make a lot more sense!

    Edit: now I see. You corrected an error in your comment in a second comment. I did not see that, because I read comments through a different tool than what appears on the web.

  11. then may I suggest that either you use the same tool as the rest of us or read through all comments before replying? Whatever tool you use surely shows that there are remaining comments.

    and, once again, even AFTER admitting you didn’t bother to read all comments, you still don’t acknowledge that someone was offering a high five to you. So very Gary

  12. @Tim Dunn – I replied to your comment that stated a false position saying it was false.

    I did not see your comment saying you had erred, and I now understand you acknowledge your comment was mistaken. That’s great!

    There are days, like my annual board meeting at work, where I do not moderate comments in real time. And there are days where I’m hanging out with my daughter on the weekend where I don’t. So I go through as quickly as possible and to get comments stuck in the moderation queue cleared.

  13. Regulation is always good for the people already in the business, whatever business it is. It is the incumbents companies that universally call for regulation, not the customers. Why? To keep competitors out.

  14. What on earth are you talking about? Avelo and Breeze recently started following the rules. JetBlue, Virgin America did too.

    There’s no evidence that competition is diminished. JSX should be stopped.

    And there’s zero evidence that pilots with less experienced are just as safe as those with 1,500 hours.

  15. @Jake – “there’s zero evidence that pilots with less experienced are just as safe as those with 1,500 hours.”

    1,500 hours doesn’t mean ‘more experience’ in fact the FAA expressly allows many pilots with fewer than 1,500 hours such as military pilots (750 hours) or anyone with a BA in aviation (1000 hours) or AA in aviation (1250 hours).

    500 hours in a tethered hot air balloon? ok, sure, that is great for safety. how, exactly?

    European co-pilots fly inside the U.S. every single day with fewer than 1,500 hours without safety issues.

    And JSX has 30,000 hour captains in the left seat, on 90 minute hops that don’t even require the right seat taking over.

    “no evidence that competition is diminished” by banning competitors, ok sure

  16. Oh and the FAA itself says 1500 hours has no demonstrable safety benefit https://www.regulations.gov/document/FAA-2010-0100-1925

    “The FAA was unable to find a quantifiable relationship between the 1,500-hour requirement and airplane accidents and hence no benefit from the requirement. For most accidents reviewed by the FAA, both pilots had more than 1,500 hours of flight time and for those SICs that did not, there were other causal factors identified by the NTSB.”

  17. @Gary-
    This “study” was done in 2013 and is an economic analysis. You read into this document what you want to read. While it says they can’t find a correlation, they admit it’s because most of the data had both pilots over 1500 hours. And on page 60 it says “As a result of the rule’s requirements and the ATP CTP in particular, the FAA expects that the rule will reduce the number of future accidents.”

    You have said more than once that the 1500 hours are “junk” hours. Yet you think they should be reduced? You never really have said what you propose, but if you want to advocate for a reduced amount of hours based on complex aircraft, turbine, multi-engine, or IFR I might agree with you. But I suspect that would actually slow down the pilot pipeline. And I do not agree with your “junk” assessment, but I will say all hours are not equal. This is why you can actually already reduce the requirement to 750 hours.

    You state that JSX has 30,000 hour Captains in the left seat. I seriously doubt the majority have that much flight time and it’s also possible that a 2500 hour Captain is paired with a 1500 hour FO. JSX hiring criteria is for ATP with 1000 hours PIC Turbine, not 30,000 hours. And since you state that flight time does not equal safety, why do you even mention that JSX Captain’s may have more flight time? What would that matter, unless you really do understand that flight time is one way to measure safety?

    We also have a doctor shortage in the US, but I am not in favor of reducing requirements to solve this even though I don’t know much about that field.

  18. @DA Pilit a dozen years later there is still zero evidence that junk hours promote safety. airlines have to train the bad habits out of pilots they pick up in their quest for these hours. who followed the us lead on this? is europe safer? are european airlines operating in the u.s. unsafe? are u.s. airlines flying within europe unsafe?

    fatigue rules matter. the substance of training matters not just running up hours. the only reason for the hours requirement is to make it costly and time consuming to become a pilot, to limit the supply of pilots in order to benefit ALPA. today’s training requirements bear little to no relation to actual commercial flying.

    JSX captains average of 8000 hours, their first officers average over 3000 hours. But a first officer on a one hour RJ flight is not the same thing as a first officer on a 14 hour 777 flight. the roles are different and so the training should be too.

    “We also have a doctor shortage in the US, but I am not in favor of reducing requirements to solve this even though I don’t know much about that field.”

    There are plenty of things that nurses and pharmacists should be permitted to do rather than doctors…

  19. @Gary-
    What a change.
    Yesterday: “And JSX has 30,000 hour captains in the left seat”
    Today: “JSX captains average of 8000 hours, their first officers average over 3000 hours.”
    So crunching the numbers and assuming they are correct, would indicate that very few of their pilots have 30,000 hours.
    If JSX averages 3,000 hour FO’s, I think they are attracting pilots just fine.
    On the flip side of your argument, you have no data to show that pilots are just a s safe under 750/1500 hours. Your “study” you posted was an economic analysis.
    Your thought that since the flights are short the Captain will do all the flying would be completely different than anything I’ve ever done and if that happened, those FO hours would also be “junk”.
    The idea that the airlines have to re-train everyone is also not valid. It certainly happens, but most pilots don’t need extensive training and if they do they are not retained.

    As a senior and someone who is a caregiver for an almost 90-year-old, seeing a doctor is difficult. PA’s already do most of the work and it’s not getting better. Sometimes, we need a little more experience and it’s difficult to come by.

  20. @Gary-
    But misleading. JSX can’t have very many 30,000 hour Captain’s if the average is 8,000 hours. Your earlier post says it ok to have low time FO’s because JSX has 30,000 hour Captain’s in the left seat. Very few, not the norm.

    And you continue to try and say it’s ok to have inexperienced pilots because we will have experienced pilots. Then you say experience doesn’t matter.

    I would like to hear from actual pilots that have over 1,000 hours flight time. Do any of you think this is a good idea?

  21. Hours isn’t the end all ,be all judge of safety. The 1500hr requirement is just a blunt HR tool, in as much to judge the “quality” of a pilot with 30,000 hours. Quality of training, operational history, company and racial culture, personal attitude all play a bigger part. Hours are just a very rough gauge of a pilot’s real ability. To me it doesn’t matter if the pilot has 300 or 30,000 hours, It matters more if the airline has the correct safety and training culture.

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