TUESDAY DECEMBER 22, 2009

Who will fine the FAA?

I was once stranded on a plane on a runway for 5 hours.  A truly horrible experience!  So I can speak first hand on the matter of tarmac imprisonment! Yesterday, to great fanfare, the Department of Transportation announced that it will fine airlines if they strand passengers on a plane for more than 5 hours. Good for the DOT!  Fine those evil airlines. Everyone knows that airline companies purposely delay take-off for hours so they can pad their profits by selling extra peanuts and beer at exorbitant prices!  Seriously, why would the airlines want to do this?  Why would they subject their customers to such a horrible experience?  These incidents are not exactly public relations opportunities!


Perhaps there is more to the story. Anyone who regularly flies out of New York’s LaGuardia Airport knows that the number of scheduled rush hour flights exceeds the capacity of the airport. And that is before the bad weather hits! You don’t have to be a queuing model expert to understand the folly of that strategy. One might expect the greedy airlines would attempt to force as many planes full of paying passengers through the queue to maximize their profits. But who is providing the adult supervision? Who controls and schedules the “slots?” Oh, that would be the Department of Transportation’s Federal Aviation Administration. The FAA, the same outfit charged with maintaining our country's “state of the art” air traffic control system. Oh wait, it is widely know that our air traffic control system is woefully antiquated and can not handle the volume of flights at our major airports. Could it be that the FAA and its air traffic control system are part of the problem?

 

I am not defending the airlines.  Since its inception, commercial aviation has not achieved an aggregate profit. Not exactly a great long-term investment!  The industry's competitive zest for popular and profitable routes has certainly contributed to this "mutually assured destruction" of the flying experience.  But the FAA bares much responsibility for airport congestion and tarmac imprisonments?  Will the DOT fine the FAA for its contribution?

POSTED AT 1899-12-30 10:38:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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