Beyond the Headlines

By John Mazor, ALPA Senior Communications Specialist
Air Line Pilot, April 2004, p.35

Quote of the Month

Jobs and employment already are shaping up to be major issues in the 2004 U.S. election campaigns. While economists will parse the numbers any number of ways, the Bush administration gave a fascinating peek in February into where its priorities lie, with this passage:

"One facet of increased services trade is the increased use of offshore outsourcing in which a company relocates labor-intensive service industry functions to another country. For example, a U.S. firm might use a call center in India to handle customer service-related questions.

"The principal novelty of outsourcing services is the means by which foreign purchases are delivered. Whereas imported goods might arrive by ship, outsourced services are often delivered using telephone lines of the Internet.

"The basic economic forces behind the transactions are the same, however. When a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically."—Annual Report of the Council of Economic Advisors

If you need to have the dots connected for you, following are four of them:

• Last year the same administration signed into law a bill that breached a longstanding U.S. prohibition and now allows partial foreign cargo cabotage within our borders.

• The European Union is pressing U.S. trade negotiators for greater access to U.S. domestic markets, including cabotage.

• The basic economic theory behind outsourcing and foreign cabotage is the same—as are the effects on American jobs.

• The only thing standing between U.S. domestic markets and an invasion of foreign airlines is current U.S. law, which can be changed by a handful of "aye" votes and the stroke of a White House signature pen.

Musical Chairs

When Gordon Bethune steps down this year as CEO of Continental, that means that each of the top 10 passenger airlines will have reshuffled its executive suite since 2001. Good airline executive help must be really hard to find these days. Maybe we should be paying them more?

Yeah, right.

The real problem is that, like a bad penny that keeps coming back, some failed airline executives don’t go away. They just resurface at another airline, where they repeat their mistakes. Recycling may be a good thing for the environment but not necessarily for the airline industry.

Tea Leaf of the Month

Results for various economic indicators across the economy have been mixed, with some meeting expectations, some falling above or below. Air traffic and yields are improving slightly, especially for international flying.

The conventional signals still are far too mixed to predict what level of recovery the airline industry will see this year, so sometimes we turn to reading other tea leaves.

Make of it what you will, but a Washington Post story reports a pick-up in sales of travel accessories. This would be items like luggage, seat blankets, the Knee Defender (which stops the inconsiderate slob in front of you from tilting his seat back into your face). We’d like to think of it as a "leading economic indicator," much as increases in factory-tool orders herald an increase in production a few months down the road.

And this just in—another "leading indicator" tea leaf: We previously reported that the year ending September 2003 saw a record number of U.S. passports issued. Since then, passport issuances have gone up another 13 percent, definitely a good sign for international flying.

Hiring Projections Up

AIR, Inc., reports a better pilot hiring picture for 2004. After a 33 percent drop in 2003 over 2002, AIR, Inc., is forecasting as many as 6,500 new hires and 500 furlough recalls in 2004.

DOT Announces New Transportation Index

Speaking of economic indicators, Transportation Secretary Norman Y. Mineta announced the creation of the Transportation Services Index (TSI), a new economic indicator intended to measure the performance of the U.S. economy as reflected in the movement of freight and passengers.

The new index focuses on the movement of freight and passenger traffic by land, water, and air.

TSI joins the ranks of other monthly indicators in "giving us a single number to measure how much transportation means to the American economy," according to the Department of Transportation. The transportation sector accounts for 11 percent of the U.S. gross domestic product and employs more than 11 million Americans.

To publicize the event, Secretary Mineta rang the opening bell at the New York Stock Exchange on the day of the announcement. Among the dignitaries accompanying him at the ceremony was Capt. Joseph Genovese, chairman (then secretary/treasurer) of United Council 52, representing ALPA.