US troubled airlines facing governmental action
The federal government is increasingly getting involved in the nation’s troubled airlines. For example:
• For the third time in 16 years the federal government is forming a blue-ribbon panel to try to save the troubled airline industry, which has racked up $58.5 billion in losses and shed 158,000 jobs this decade.
• Airline executives are increasingly urging Congress to eliminate or at least raise the limit on foreign investment in US airlines.
• US Sen. Charles Schumer has entered the arena by calling for a federal review of complaints by consumers that they are losing millions of frequent flier miles without notice in confusing agreements.
Transportation Secretary Ray LaHood, who has ordered up the panel to study saving the industry, vows it won’t be "just another advisory committee."
"I am not commissioning some report to fill space on my bookshelf," he wrote on his official blog on the department’s website.
"This committee will make a difference. Without a financially strong aviation industry we will be unable to compete in domestic and international commerce."
But a $20 billion price tag for fixing the industry’s biggest problems and a failure to implement most of the suggestions from two previous commissions have many analysts and former government officials questioning whether anything will come from this latest effort, says the AP.
Carlos Bonilla, a transportation adviser to former president George W. Bush, says the old reasons given for limiting foreign ownership of US carriers don’t stand up anymore. There are, he says, easy solutions to the concern that foreign ownership makes it difficult for the Defense Department to commandeer commercial fleets in a time of war. And carriers based in the US would still be regulated by the federal government regardless of who owns them, he says.
Sen. Schumer wants to establish industry rules for frequent flier programs that are billed as a free benefit to help attract and retain customers. There are few restrictions now on how airlines can manage and redeem the miles.
The senator says he suspects consumers are actually paying for frequent flyer programs through air fare and fees. If so, he said rules are needed to protect consumers. He’s asking the Department of Transportation to review the complaints.
By David Wilkening
David
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