Book Review published in Transportation Journal, Winter 2015.
The Next Crash: How Short-Term Profit Seeking Trumps Airline Safety
Amy L. Fraher
Cornell University Press
512 East State St
Ithaca, NY 14850
2014, 224 pp.
Conventional wisdom holds that travel on passenger airlines has never been safer than it is today. Amy L. Fraher, author of “The Next Crash: How Short Term Profit Seeking Trumps Airline Safety”, disagrees. Fraher is a former US Navy and United Airlines pilot who lectures in Organizational Studies. Her book takes a critical theory approach to the accepted wisdom of airline safety and, especially, the failures of management in the industry post 9/11.
The author begins by comparing current airline financial and risk management practices with those of the financial industry prior to the crisis of 2008. The book consists of seven concisely written chapters, supported by ample statistics and graphs.
The readers’ attention is captured in the first chapter with examples of how the industry is being systematically dismantled and airlines taken into bankruptcy in order to shed labor contracts. Indeed, according to Fraher, bankruptcy is the preferred strategy of CEO’s who are handsomely rewarded following Chapter 11. She believes that the industry used the downturn after 9/11 as an excuse to revamp the entire air transportation system in the US.
The next three chapters provide a good history of the airline industry both before and after de-regulation. The current regulatory environment is examined and found wanting. The author contends that the government has been reluctant to impose regulations until disaster strikes. The preference of policy makers has been to let the market sort out economics, safety, training, and economic development. Since de-regulation the FAA has been charged with both promoting and regulating airlines. Fraher provides evidence that the FAA is more active in promoting air travel than in regulating safety. We now know that de-regulation did reduce fares and increase the ability of average people to fly. Over time, however, the industry has consolidated and is now made up of a few legacy carriers, several low cost carriers, and regional “feeder” lines. Airline de-regulation was followed by the same in trucking, finance, and communications.
Chapter 5 is an interesting study of risk management, finance, and cost cutting. As airlines consolidated they have attempted to build market share through hub and spoke operations, frequent flyer programs, and by starting commuter airlines to feed the hubs. Regional airlines provide the “spoke” flights with little FAA oversight and much lower operating costs. The description of low paid, inexperienced, and sleep deprived commuter pilots is chilling, especially because regional airlines carry approximately 50% of US air passengers. Fraher is highly critical of managers who are rewarded for employee layoffs and for managing risk as a cost of doing business.
Chapter 6, “Strapped In for the Ride”, summarizes post 9/11 airline economics and the low cost model. One result has been a pilot shortage due to low pay, greater military retention, and outsourcing of airline operations. Several recent fatal accidents are described in detail. In each case the National Transportation Safety Board cited lack of pilot and/or mechanics professionalism and failure to adhere to established procedures. In fact, the NTSB criticizes the FAA for lax oversight and inadequate regulations.
In Chapter 7, “Airlines Today”, Fraher continues her strong indictment of management by describing divide and conquer policies which pit groups of employees against each other. The key to fostering friction between employees is the structure of airline labor contracts in which different unions represent various professional groups.
The Epilogue is an excellent summary of the issues along with the author’s recommendations to improve the industry. These common sense solutions include increased government investment in infrastructure, more effective regulation, restricting the ability to declare Chapter 11, and more emphasis on airline safety before accidents occur. Adopting these measures would mean a small surcharge on every ticket sold, taxing airline ancillary fees, and eliminating subsidized flights through the outdated Essential Air Service program. Finally, Fraher says that the FAA’s dual mandate to promote and regulate aviation should be divided into separate agencies.
Though clearly biased in favor of pilots and airline employees vs. management, Amy Fraher has written an informative and thought provoking book.
Mitch Kostoulakos, CTL
Southern New Hampshire University