Moderator: Welcome to Viewpoint with our guest, Michael Conway. Michael, thank you for joining us today. Since the Airline Deregulation Act became law in 1978 many new airlines have been created, but most of those have failed. Do you see a correlation?
Michael Conway: Thank you and I appreciate the opportunity to be with you today.
No, I don't see a correlation, it is more a cause and effect. The Degregulation Act created the opportunity but the marketplace and the lack of government oversight caused the failures. Some of the reasons for the failures include the following:
Insufficient initial capitalization, flawed business plans, inexperienced management and predatory actions by major carriers.
Springfield, VA: Mr. Conway,
Why all the arguments and confusion among both industry and government over how to measure on-time performance? Why not a common-sense solution: if the flight is scheduled by the airline to depart at noon and arrive at 1 p.m., it is late if the door does not close by noon and open at the destination by 1 p.m.! All the other numbers used and measured by the government and industry are just smoke and mirrors that confuse your customers. I don't care about push-back times, take off times, etc., I just want to know if the flight left ("door closed") on time, and arrived safely ("door open") on time. Blaming weather, ATC delays, etc. is another issue - but measuring on-time performance should not be hard. Thanks!
Michael Conway: There is only one way that the Department of Transportation measures on time performance and that is, whether or not a flight has arrived at the gate within 15 minutes of the scheduled arrival time. I agree that measurements as to when the plane pushes back and when the doors close are irrelevant.
Washington, DC: I traveled frequently this summer on business and more often than not had to endure delays and cancellations. Mr. Conway, to what do you attribute this and what is your recommendation for a solution?
Michael Conway: The number of flights by U.S. carriers is growing at more than 5 percent per year, however, the airport infrastructure with respect to additional airports and runways is not keeping pace. In addition, the air traffic control system is badly needing modernization. Accordingly, until such time as more airports and runways are built and a more effective means is developed to monitor the flow of aircraft, I'm sorry to say that the delays most passengers currently experience will only get worse.
McLean, Virginia: ARE the skies too crowded? Thanks for your thoughts.
Michael Conway: Yes, from the standpoint of trying to complete the current number of flights scheduled.
Montebello, CA: The government should get involved. Deregulation was a bad idea. Everything should go through government intervention.
Michael Conway: While I agree that the government should get more involved, it should not be in the area of trying to regulate service quality. In this regard, the government has little experience and certainly no track record in doing so effectively.
Where government can be more involved is in providing more effective oversight with respect to illlegal and predatory practices by the largest airlines. In my opinion, such lack of oversight has created an environment that stifles competition, reduces consumer choice, and therefore, provides little incentive for dominating carriers to provide better service.
Arlington, VA: If Congress does not act, what steps do you think the industry should take to make sure that air travelers are treated in a fair and consistent manner? Secondly, what do you think the odds are that Congress will do something.
Michael Conway: If Congress does act and if history is a precedent, they are likely to do so in a hastily developed manner, the results of which are unlikely to achieve the desired results. While there is no question that all airlines can do a better job on service, particularly in the area of how passengers are treated, until we have more airports and a vastly improved air traffic control system any steps taken by Congress short of that will be like placing a bandaid on a gaping wound.
The odds of Congress doing anything substantive and effective to calm the building passenger rage, I believe, are very high against it. From what I've seen thus far re: the so-called, "passenger bill of rights", if implemented, I believe would further deteriorate an already sub-standard airline product.
Pearl River, NY: What do you think can be done to improve airline services? Are you doing anything unusual or innovative at National?
Michael Conway: I believe a significant part of the solution to better airline service rests with the airline passenger. A majority of most airlines revenues comes from a relatively small category of passengers, i.e., the frequent business travelers. Until this group of consumers becomes more concerned with the quality of the service they are receiving versus their frequent flyer points, airlines will have little incentive to provide better service.
At National, we have implemented several superior customer amenities as follows:
1) From day one all of our aircraft were configured with more leg room and overhead storage space than any other U.S. major airline, and that will continue to be true even after American Airlines completes their much-publicized initiative of adding more leg room in coach.
2) On all of our long haul flights we offer hot meals with a choice in both first class and coach, and all meals are served on china.
3) For passengers traveling from one side of our Las Vegas hub to the other we offer unlimited free stopovers in Las Vegas with no penalty.
4) There are several more and I would indulge you to check out our Web site nationalairlines.com for further information.
Bethesda, MD: How is it that some of the big Airlines can charge $1,400 to fly out of one of D.C. airports to the West and $400 to fly to the same city out of BWI just 40 miles down the road?
Michael Conway: This is a great question and is symptomatic of a number of problems. Washington National Airport is a slot controlled airport that is dominated by the high cost U.S. major airlines who clearly take advantage of the traveling public and literally gouge them. BWI is not slot controlled, has ready access to new carriers, and as a result provides better choices and lower fares.
St. Louis, MO: I'd be interested in learning about the relationship between higher oil prices and airline fares. Do you feel the industry passes the cost along to the consumer in a fair or unfair manner?
Michael Conway: Fuel prices are one of the most significant components of any airline's operating costs. Airlines by tradition and unlike most industries, price their product to "demand" not their cost components. Efforts by airlines to pass along higher fuel costs have largely failed and while fares have increased since oil prices have escalated, the higher fares are covering only a small fraction of the higher fuel costs. Most of the fare increases have been aimed toward the business travelers, while the advance purchase highly discounted leisure fares have remained unchanged.
Potomac, Maryland: I'm not familiar with National Airlines. How long has National been in business? Another question: What does a new airline have to do to obtain routes? Must it demonstrate sevice and safety?
Michael Conway: National began service in May of 1999 and we operate an all Boeing 757 fleet serving cities coast to coast with non-stop service to and from our Las Vegas hub. We have already carried more than two million passengers and were recently ranked by Conde Nast Traveler magazine as the second best U.S. carrier (Midwest Express was ranked #1) ahead of every major U.S. airlines.
All new airlines must complete a very rigorous certification process by the FAA and Department of Transportation. National Airlines successfully completed this process after several months of intense scrutiny by these federal agencies.
Please refer to our Web site nationalairlines.com for more information.
Philadelphia, PA: The big airlines often match the low prices of new carriers such as yours. How do you expect to compete with them, if prices are equal, and they offer more flights? We need more competition, such as your airline.
Michael Conway: In the case of National we clearly offer a superior product at an affordable price. Here, it is the consumer who has the choice. We do our best to remind passengers that the lower fares, which are being matched by the larger major carriers, were introduced by National and accordingly National was responsible for not only improved service but more affordable service.
The reason we are able to offer lower fares is that we are more efficient, fly more modern aircraft, and we are not encumbered by the labor strife that plagues so many of our larger competitors.
Crofton, Maryland: I would like to know if you require your employees and executives to fly occasionally, just to see what getting around the system is like today. And I'm not talking first-class either - I mean in the cattle hold with all the other peons, so that they also can experience the joys of limited leg room, narrow seats, overworked flight attendants, long waits on the tarmac, and everything else that awaits today's air traveler. How about it?
Michael Conway: We have a very comprehensive program that does in fact expose our management and other employees to the services, or lack thereof, at other carriers. In addition, we do frequent onboard surveys among our passengers to determine the extent to which we are meeting the high expectation service levels we have promised.
Vienna, VA: A couple years ago there was a lot of hoopla over the deteriorating air traffic control system. Now, we hardly hear anything. What is the state of the system today?
Michael Conway: I think the hoopla is just as profound today, and the system continues to be badly in need of more modern applications to keep pace with the increasing demand for air travel.
Chevy Chase, MD: What exactly does the proposed passenger bill of rights entail? Are you for or against it?
Michael Conway: The proposed bill essentially entails a series of "quick fixes" in response to the very legitimate and increasing number of passenger complaints. For example, lost luggage, denied boardings, late flights, lengthy refund delays, etc.
I am certainly in favor of airline passengers getting a better "deal" than they are currently receiving. At National we have taken steps to do just that, so much so that it is clearly apparent to anyone that has flown us compared to what they have likely experienced on other airlines.
As I stated earlier, I do not believe the federal government has the wherewithall to legislate service; the only group I believe that can bring a better airline product into being is the consumer. If passengers begin to steer their business to the carriers who are providing a better service that is all the incentive that is needed for the sub-standard airlines to improve their product.
Alexandria, VA: This past weekend, I flew to Florida from Dulles, which involved a stop-over in Atlanta on both legs of the trip. Not only were all flights on time, but three were early! The staff both at the gate and on the plane were friendly and helpful, and yes, the seats were cramped, but I paid a pittance ($150) for a round-trip fare. People, when they complain, should compare what they are getting with air travel to what they would spend in time and money (gas, hotels, etc.) if they were to drive. The only problems I have ever experienced with air travel are when there were major thunderstorms last summer. Frankly, I am happy the airlines didn't want to risk my life to fly in that weather. Anyway, I think the airline industry is doing as good a job as any other major industry and think that is a pretty good job. (No, I don't work for an airline, nor do I know anyone who does. This is just an honest compliment!)
Michael Conway: Thank you for your comment, especially since it is rare these days that the industry is the subject of any kind of praise. Notwithstanding service issues which have been elaborated on to a fair degree today, the safety record of U.S. airlines is something to be proud of. I, for one, believe that record obviously is the most important statistic and will continue to be case with respect to U.S. commerical aviation.
New York City: My understanding from what I've read about airline safety is that dangers exist mostly on runways - planes crossing paths. Is this true?
Michael Conway: Dangerous is a relative term and you are probably correct in that it is on the taxiways that you have the most movement and congestion in a relatively confined area. However, while the odds of a mishap in this regard might be greater I do not believe it is a cause for concern because of the very extensive ground control procedures and traffic tower oversight and monitoring that is applied.
Washington: The second part of the title for this chat is the future of aviation. What do you see it as?
Michael Conway: I believe the future of U.S. aviation is bright, albeit not without its challenges. Air transportation is a way of life that is not going to change and I believe that the consumer will decide who the survivors will be and those that will be rewarded in the process. However, I believe it will be a major step backwards in the event the government allows a further consolidation of airlines. For example, I see no evidence that indicates that approving a merger between United and USAirways - two airlines with significant service level deficiencies - will be a better airline for the consumer.
Both of these carriers have had a well-publicized history of labor strife which I believe will only exacerbated if they were to combine, not to mention, the further consolidation this would then cause among the remaining eight major U.S. airlines.
Washington, DC: In keeping with the quality of service thought process, why has purchasing a ticket become such an intense scavengers hunt for the 'best price'? At any point in time, I can easily retrieve a handful of 'best prices' for a single flight from the same source. Ticket 'brokers' appear to be abusing faults within the industry's system in an attempt to provide the best deal for the customer (lining their own pockets at the same time). Of course, is it any wonder that such companies have cropped up with all of the restrictions and deadlines that are so commonplace with ticket purchases?
How is the industry working to reduce this pain associated with scheduling one's vacation or business travel?
Michael Conway: There is no question that the search for the "best fare" is indeed a treasure hunt, and the process is becoming more and more cumbersome. And while the travel agent industry has been much maligned, I would encourage passengers to use them and stick with them when they provide a good result.
Like anything else where a "deal" is offered by an intermediary, i.e., a ticket broker, that sounds too good to be true extreme care should be used with respect to the fine print.
As far as how the industry is addressing this problem, I think it is more on a case-by-case basis with respect to each airline. At National we have developed a user-friendly Web site for our customers and travel agents, and in addition have also developed various specialty services such as National Airlines Vacations to satisfy both the air and hotel needs for those who wish a prepackaged, all inclusive trip.
Michael Conway: It was a pleasure to share with you our views at National on the airline industry, and I very much appreciate everyone who participated.
We're very excited about all the things we're doing at National and would like to thank washingtonpost.com for providing National with this opportunity. Lastly, I would be remiss if I failed to mention that this Thursday we begin non-stop service from Las Vegas to Reagan National Airport.
Thank you.
Moderator: Our thanks to Michael Conway, National Airlines and all who participated.
It's no secret that the quality of air transportation has significantly declined over the past two decades. So much so that several attempts by Congress have been made to place guidelines on airlines and the service they provide. Should the government intervene? Are we headed back to a regulated industry? Are the skies too crowded? What can be done to improve the quality of airline service, and yet maintain reasonable prices and keep intact the industry's stellar safety record? Michael J. Conway, President and CEO of National Airlines, answered questions about these topics and more. 
