The American Spectator

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p> FLY RIGHT br> Re: Michael Craig's Eat the Friendly Skies : /p> p>There are some misconceptions in Michael Craig's article about the br> bankruptcy filing by United Airlines by that I think need correcting. /p>

Mr. Craig claims that "The free market has broken down and can't fix things: the dominant players have developed an unsustainable economic model, but they are unable to change it and the profitable players are in no position to take over the market."

First, the free market has certainly not broken down; it is working as it should, forcing a poorly managed company, United Airlines, to enter bankruptcy. That is how it should be. In fact, Mr. Craig contradicts that assertion in the very next paragraph where he states "the government...wiping the slate clean so market forces can start to reshape it [airline industry]."

Secondly, as for the dominant players being unable to change their business model, this is simply not true. There is no law requiring that they operate a "hub and spoke" system where airplanes sit idle because connecting passengers can't make their flights. There is no law where employees cannot leave one airline to work for another one because they'll lose seniority, only an unspoken pact among airlines enforced through archaic and hands-tying collective bargaining agreements. Thirdly, the profitable players can fill the voids left by the failing dinosaurs: Just watch Southwest, Jet Blue and AirTran. They're doing so even today.

As to the employees who Mr. Craig states have the most to lose, he is certainly correct in that regard. But much of that is the fault of their own union leadership, especially in the case of United, where employees owned 55% of the company, and which had union leaders on the Board of Directors. The inherent conflicts of interest were a recipe for disaster from the get-go. There's nothing wrong with workers owning stock in their company, but plenty wrong when they have a controlling interest exercised by union leaders with no experience in running an airline.

Regarding employee salaries, Mr. Craig's question, "How can you overpay a pilot?" is silly. It certainly is possible to overpay a pilot, just like it's possible to overpay anyone. While safely piloting an airplane is of course a very important job, what would Mr. Craig pay? Half a million dollars a year? One million? Ten million? Surely Mr. Craig, as an investment professional, knows that market forces are the primary factor in setting wages in private industry. His argument recalls the nonsensical "comparable worth" controversy that was the rage a few years back. Besides, the evidence to the contrary is clear. Southwest, while still paying a respectable wage, pays its pilots less than the traditional carriers but has better service and a better safety record.

(This is not meant to begrudge a pilot his six-figure salary, as a Wall Street Journal column recently did. When the weather is at minimums and you're flying a coupled Category II ILS approach to get your jumbo jet into Frankfurt, Germany, with another airplane two minutes ahead and another two minutes behind, you want somebody in the cockpit who can operate under pressure. Throw in an emergency, like an engine out, and, well, you get the picture.)

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