May 11, 2015: Qatar Airways is going to add service to three more US cities and the US airlines don’t like it. That’s too bad. We’ve heard this story before.
First, it was the proposed deregulation of the US airline industry. By the late 1970s, there hadn’t been a new scheduled airline certificated by the Civil Aeronautics Board since the end of World War II other than local service carriers. Non-scheduled airlines (non-skeds for short) and charter carriers received licenses for their lines of work, but every effort to obtain a scheduled certificate was defeated by those airlines already holding one. They didn’t want the competition.
When the move toward deregulation occurred in the 1970s, only United Airlines and the original Frontier Airlines supported it. United, then the nation’s largest carrier, had been rejected by the CAB for every major route expansion while UA’s competitors received new route awards. UA thought deregulation was the only way to expand. Frontier, a local service carrier that had become a “regional” airline by then (as designations evolved), also saw expansion opportunities.
Every other trunk and local service airline opposed the idea. They saw new competition from start-ups or expansion by incumbents as a threat to survival. Braniff Inc., which notoriously over-expanded in deregulation, did so defensively, though it wasn’t apparent at the time. Harding Lawrence, the CEO, felt deregulation would soon be deemed a mistake and he wanted to position Braniff as a major carrier capable of fending off anticipated competition from United, American Airlines and other trunk carriers when deregulation was rescinded. He famously (within airline circles, anyway) noted that United was adding more seats to its Boeing 737 fleet. When it was done, it would have added more seats than currently in Braniff’s entire fleet of Boeing 727-200As.
Braniff, of course, became the first of what would turn out to be hundreds of airlines to fail under deregulation. Among those failures, incapable of adapting to new market realities: Eastern Airlines, Pan Am, TWA and even the first new airline to be certificated by the CAB in 40 years, the original Midway Airlines (which, by the way, is where I got my start in the airline business).
Critics point to these hundreds of failures and say deregulation was a bad thing. They overlook the fact that without deregulation, there wouldn’t have been the opportunities to start new airlines in the first place. They also overlook the fact that under regulation, there still were many airline failures–they just disappeared in the guise of mergers with healthy airlines.
It took decades for the survivors to adapt to deregulation, but this is, today, ancient history.
During then era of high regulation, Pan Am, TWA, British Airways and British Caledonian objected to the low fare trans-Atlantic service called SkyTrain, offered by Laker Airways. Legal obstacles, ridiculous restrictions, unfair competition and what turned out to be outright illegal activities were thrown up to block Freddie Laker from his quest to bring low fares to the traveling public.
Richard Branson ran into all kinds of obstacles in his fight to create Virgin Atlantic in competition with British Airways. Alaska Airlines filed many legal objections to Virgin America’s start-up, claiming improper foreign ownership (Branson’s).
More recently Norwegian Air Shuttle’s long-haul Boeing 787 operation was the target of US labor unions crying unfair competition.
And now the US Big Three, American, Delta and United, are crying foul over the Middle East’s Big Three. In many cases, the ME3 serve routes that the US3 do not. But having shifted business plans to emphasize lucrative international travel at the expense of the largely unprofitable US domestic service, the US3 are threatened by the very presence of new competition, be it NAS, Qatar Airways, Etihad Airways or Emirates Airlines. It matters not that the ME3 offer passenger service that is far superior to even First or Business Class service on the US3.
The US3 just doesn’t like competition. Period. Never has. Never will.
The US3 need new advertising slogans: Whining higher for Delta. Something Whining in the Air for American. And Fly the Whining Skies for United. They sure don’t do much for passengers.