Crashing for Dollars?
Blind Trust: How Deregulation Has Jeopardized Airline Safety and What You Can Do About It, by John J. Nance, New York: William Morrow, 396 pages, $17.95
Are airline safety and airline profits conflicting goals? Or, put more cynically, are there airline executives out there who think they can make money crashing airplanes? John Nance thinks so, and he's written a book about it called Blind Trust.
The argument, which seems to have been largely accepted by the media, goes something like this: Safety measures cost money. To make a profit, airlines have to control costs, thus there is constant pressure on airline managements to skimp on safety. During the era of airline regulation, airlines didn't have to worry so much about costs. But since deregulation, competition has forced ticket prices so low (remember when the argument was that regulation was necessary to protect consumers from high prices?) that airlines can no longer resist the temptation to save money by taking safety risks. The conclusion of this specious argument: Deregulated air travel isn't as safe as regulated air travel.
The kicker is that by any dispassionate measure, airline travel in the United States, both on the big airlines and on the commuters, is much safer now than it was before deregulation. According to statistics of the Federal Aviation Administration (FAA), the last five years have been safer years to fly than any other five years in aviation history—the saddening accidents of 1985 notwithstanding. Nance, of course, knows this and lawyer-like—he's an attorney as well as a pilot—argues that the statistics don't matter. ("If the facts are against you, argue the law. If the law is against you, argue the facts.") I can imagine, however, that if the statistics indicated flying to be less safe after deregulation, he and other detractors of airline deregulation would find the facts most useful.
Actually, one of the reasons flying is safer now than before deregulation is…deregulation. Airlines compete fiercely to sell tickets. The way to sell tickets is to give consumers what they want, and one of the things airline passengers want more than anything is safe travel. Successful airlines strive mightily to give consumers just that.
Airlines, especially "upstart" airlines, can't survive if they are perceived as being unsafe. Nance gives an excellent recital of the events surrounding the icy Air Florida crash into the Potomac in 1982. Air Florida never recovered from the negative publicity attendant upon the crash and was eventually merged into another carrier, the Air Florida name gone forever. No, you can't run a successful airline these days and have a reputation for being unsafe, and most airline executives are smart enough to know that.
In all, Nance examines a dozen airline tragedies. He's put muscle and blood in the telling—gripping tales of errant judgment, bull-headed wrongness, and human frailty. Great reading. But here's the kicker again. All but two of the accidents occurred before deregulation: regulated airlines, regulated markets, regulated safety—regulated accidents. Yet he offers up the conclusion that deregulation has been bad for safety. How?
Nineteen eighty-five was a bad year in terms of passenger fatalities—the worst ever in worldwide terms. In the United States, it was the second-worst year ever—the worst since 1977, the last year before deregulation. And although these accidents happened too recently to be included in Blind Trust, they are pointed to by reviewers and the media in general as convincing proof that Nance's thesis is correct—that deregulation, despite its financial success, is bad for safety.
Even the most casual look at the facts debunks this nonsense.
• The Japan Air Lines 747 that crashed in history's worst single-plane disaster was operating in Japan in a completely regulated environment—and JAL is one-third owned by and 100 percent under the aegis of the Japanese government. (The Japanese are now privatizing JAL, in part because after the crash they concluded that a privately owned, for-profit carrier would be safer.)
• The Air India jet that crashed off Ireland was operating on a completely regulated route for a state-owned airline.
• The Delta L-1011 that crashed on approach to Dallas-Fort Worth airport encountered a windshear that the unsuspecting pilot was unable to fly out of. In our system, weather forecasts and wind-shear alerts are the responsibility of the National Weather Service and the Federal Aviation Administration—government agencies. (In the past, the FAA has lagged in applying available technology to airborne collision-avoidance systems, instrument-landing systems, communications, and so on. The same is true of windshear-detection technology. What's available now won't be in place for years.)
These three accidents account for the overwhelming majority of fatalities in 1985, and not one had the least thing to do with deregulation.
Don't misunderstand. Despite a failure of thesis, Nance has written a valuable book. In a revelation that can only be called astounding, Nance reports that Sen. Henry M. ("Scoop") Jackson, often known as "the Senator from Boeing," personally pressured an accident investigator to back away from an area of inquiry that was going to prove embarrassing for Boeing. Nance also spends a lot of time throwing rocks at the FAA, and he hits his target convincingly, revealing the FAA for the awkward, backward, understaffed, overwhelmed, politically manipulated behemoth it is—one White House staffer called it the "slowest bureaucracy in the government."
Nance thus unwittingly makes a case against his own conclusion. Despite market forces that work to keep airline travel safe, some disinterested party, believes Nance, should be minding the store. Someone should be certifying that upstart carriers have the skills and management philosophy necessary to operate safely and to ensure that well-established carriers don't become lax. In our system, that someone is the FAA, but according to Nance himself, the FAA isn't doing the job. In this whole deregulation-versus-safety controversy, one brute fact stands out: safety is still regulated by the feds. If there have been carriers flying around that shouldn't be, and Nance argues convincingly that there have been (both pre- and post-deregulation), then that's the FAA's fault. And that, folks, is a failure of regulation, not of the marketplace.
John Doherty is an airline pilot who writes frequently on air-safety issues for REASON.