THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, July 31, 1994 TAG: 9407270334
SECTION: COMMENTARY PAGE: J3 EDITION: FINAL
TYPE: Book Review
SOURCE: BY STEPHANIE MEHTA
LENGTH: Medium: 75 lines
RAPID DESCENT
Deregulation and the Shakeout in the Airlines
BARBARA STURKEN PETERSON AND JAMES GLAB
Simon & Schuster. 352 pp. $25.
RAPID DESCENT, Barbara Sturken Peterson and James Glab's indictment of the airline industry, opens promisingly. In late 1974, Massachusetts Sen. Edward Kennedy woos a Harvard professor to Washington to preside over his subcommittee on administrative practices and procedures. The academic's real mission is to help Kennedy - then a presidential hopeful - make a case for airline deregulation.
As the professor starts looking into the alphabet soup of federal agencies that monitor the airlines - the FAA, the CAB - he is amazed by the airlines' inflexible operating practices and childlike reliance on government subsidies. He also discovers that agencies like the Civil Aeronautics Board are all too happy to accommodate the major airlines' whims.
It's a great device. The reader's disbelief mirrors the enterprising academic's. The professor goes on to draft a key plan for deregulation of the airline industry; he returns to Harvard and years later becomes a federal appellate judge and a nominee for the U.S. Supreme Court. The authors, however, argue that Stephen Breyer never received appropriate recognition for his role in deregulation.
He probably doesn't want it.
The deregulation law, passed in 1978, made air travel accessible to everyone for the first time in the 50-year history of commercial travel. It gave way to lower fares and increased routes.
While deregulation fostered the creation of airlines like People's Express, the proletarian media darling that redefined no-frills travel, many airlines companies were far from frill-free. The companies, like much of corporate America in the 1980s, were laden with excess: excessive spending, excessive intra-industry warring, and fortunately for readers of Rapid Descent, excessive personalities.
From Robert Crandall, the chain-smoking, temper-prone chief of American Airlines, to TWA's Carl Icahn, a perpetual industry outsider seeking acceptance, the companies were led by an elite college. Crandall was the undisputed dean. They even had a fraternity - Conquistadores del Cielo - that met annually for a wilderness retreat.
The authors do little to mask their disdain for the private-sector Conquistadores. They save some venom, though, for the public sector. Under the Reagan administration, deregulation was interpreted as laissez-faire. The near-absolute separation of business and government facilitated executive Frank Lorenzo's buying spree of smaller airlines. ``The Reagan administration never met a merger it didn't like,'' quipped Alfred Kahn, then-chairman of the Civil Aeronautics Board.
The party did not last for very long. The airlines could not continue to bleed red ink. But consumers had become accustomed to low fares. So instead of raising rates, they went after jobs that had wages. Lorenzo became a symbol of the job-cutting, union-fighting airline executive.
The authors, free-lance travel writers, have a good sense of pace. They quickly summarize the early days of commuter travel, then jump right into the meaty stuff. They avoid bureaucrat-speak, and they season each chapter with measured doses of examples and anecdotes.
To be sure, the book sheds no new light on the airlines and their problems. Rather, the authors stitch all the pieces together in consistent, albeit workmanlike, prose.
And while the book does offer a glimpse of what's to come, it does not offer many real solutions to the post-deregulation mess. In short, the regular reader of the business press probably won't find Rapid Descent enlightening. MEMO: Stephanie Mehta, a former staff writer, is a reporter with The Wall
Street Journal. by CNB