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FAA Skipped More Than 100 Safety Reviews

    
The Wall Street Journal

May 6, 2008

FAA Skipped More Than 100 Safety Reviews
By CHRISTOPHER CONKEY and ANDY PASZTOR
May 6, 2008; Page A3

WASHINGTON -- The Federal Aviation Administration has failed to perform more than 100 recommended safety reviews at major airlines in recent years, according to a recent assessment by the agency.

The reviews in question are top-to-bottom examinations of dozens of different airline safety systems -- ranging from flight-crew training to deicing programs -- that are supposed to be completed at least once every five years. The goal is to ensure that airlines have the right systems in place to identify potential hazards and deal appropriately with any they find.

The importance of those examinations became clear earlier this year amid revelations that FAA managers allowed Southwest Airlines Co. to fly planes that hadn't undergone mandatory structural-safety inspections. The FAA hadn't reviewed Southwest's system for complying with agency safety directives since 1999, a fact the Transportation Department's inspector general and other critics have pointed to as a missed opportunity to prevent the inspection lapse.

At a Senate hearing in April, Acting FAA Administrator Robert Sturgell was asked by Sen. Patty Murray (D., Wash.), chairwoman of the Senate subcommittee overseeing FAA funding, whether other airlines were overdue for any five-year reviews. Mr. Sturgell said he wasn't aware of any at the time, but he promised to conduct an internal survey and get back to her.

A few days later, Mr. Sturgell responded in a letter, a copy of which was reviewed by The Wall Street Journal. He indicated that in addition to Southwest, the agency hasn't performed dozens of five-year reviews at seven other major carriers, including AMR Corp.'s American Airlines, which is sparring with the agency over a recent regulatory decision that resulted in the cancellation of thousands of flights.

In the letter, Mr. Sturgell said "inadequate resources" may have played a role.

FAA inspectors and many lawmakers say the FAA has given the industry too much control over safety regulation. Under its Air Transportation Oversight System, a data-driven effort to pinpoint budding safety problems before they lead to accidents, the agency relies on day-to-day information provided primarily by airlines, along with the now-mandatory five-year reviews, to determine safety risks.

"One of the lessons from the Southwest debacle is that these system inspections matter," said Sen. Murray, in a statement. "They are one of the best indicators of whether an airline has its act together when it comes to maintenance and safety compliance. Clearly, the FAA needs to bring more focus and leadership to meeting its own self-imposed deadlines."

The reviews, some overdue by nine years, don't suggest imminent safety hazards are being overlooked. The focus is on whether carriers properly collect, analyze and act on operational safety data aimed at preventing accidents.

Among them are overdue examinations of advanced engine monitoring, pilot training and extended operations over water at US Airways Group Inc., all essential to ensuring safe operations.

"The inspectors by and large met the recommendation" to conduct five-year reviews, said Peggy Gilligan, deputy associate administrator for aviation safety at the FAA. "There were some that were not completed."

Ms. Gilligan stressed that five-year reviews were recommendations until 2007, when they were made mandatory. Going forward, she said the agency has developed a new tool that will alert senior officials when five-year reviews are overdue.

Andrea Rader, a US Airways spokesperson, said the FAA "has been looking over our shoulder" and expressed confidence the agency will conduct the proper reviews. "An airline does not have an interest in cutting corners."

The lagging reviews come as critics and many lawmakers are questioning the robustness of ATOS, which was conceived a decade ago following a spate of deadly crashes.

"Rather than use ATOS as a tool to enhance its inspectors' ability to perform industry oversight, the FAA has instead allowed ATOS to be used as a way to shift the burden of oversight from the agency to the industry itself," said Tom Brantley, president of the union representing most FAA inspectors.

Write to Christopher Conkey at christopher.conkey@wsj.com1 and Andy Pasztor at andy.pasztor@wsj.com2

Tip Of The Iceberg

As reported today in the Pioneer Press: Imagine being able to go online to check the safety record of the airplane on which you're booking a seat. That's one idea that's occurred to Kevin Mitchell as he's watched the latest round of stepped-up airplane inspections by federal regulators. "You'd know where your aircraft was last inspected and repaired," said Mitchell, chairman of the Business Travel Coalition, an advocacy group for business travelers.

BTC ANALYSIS

The highly effective AA and DL inspections of MD-80s this week represent a FAA/airline oversight and inspection process that passengers perceive is always going on in the background. However, such pro-activity, unfortunately, is not the norm. Give credit to House T&I Chair Jim Oberstar who launched a months-long investigation, and scheduled hearings, including the much-anticipated one next week, that prompted the FAA to impose a record face-saving $10.2M fine on Southwest Airlines (this fine will likely be negotiated way down if public attention subsides). Pressure is on the FAA, and growing.

TIP OF THE ICEBERG

Once focus is shifted away from these recent domestic inspections to FAA airworthiness directives that have been implemented at foreign repair facilities, then flawed current aircraft maintenance outsourcing practices and an outdated FAA oversight model will likely generate headlines on a daily basis. Imagine the concern corporate travel managers and passengers will have when they learn that critical maintenance is being performed in third-world countries by untrained, unlicensed workers who cannot read the English-language maintenance manuals and who did not have criminal background checks performed on them while they work on planes in non-secured areas.

LET THE MARKET DECIDE

Airlines often justify their policies by reciting the mantra of “the market is driving our decisions.” Airline passengers would no doubt drive airline maintenance outsourcing decisions if they possessed complete and accurate information with respect to where their aircraft was last maintained.

Consider these hypothetical passenger choices while booking a flight between Chicago and London.

Option A: Book a flight on an aircraft that was overhauled in Indonesia (a suspected al Qaeda stronghold) by workers with no training in a non-secured facility that rarely, if ever (in the case of non FAA-certificated repair facilities), was inspected by FAA.

Option B: Book a flight on an aircraft that was maintained in the U.S. by licensed mechanics, with an average of 18 years experience, supervised by licensed airline inspectors in a FAA-certificated repair facility where there are sufficient FAA inspectors to oversee the program.

I hope Jim Oberstar’s Committee considers mandating this kind of disclosure, and then the market will truly drive airline maintenance decisions. The concern over this issue is widespread and growing.

WHO IS CONCERNED ABOUT FAA OVERSIGHT PROBLEMS?

Corporate travel managers, passengers, airline mechanics, current FAA inspectors, current and past and present NTSB Board members, former NTSB accident investigators, former DOT IGs, former airline CEOs, GAO officials, investigative reporters and senior Congressional staff and Members who have been keen FAA and TSA observers over time.

EDITOR Note: A growing crisis in U.S. regulatory oversight of airlines’ maintenance programs and practices has emerged as recent developments and press stories have established. (See reports and analysis here.) To support a Signatory Letter to House Transportation Committee Chairman James Oberstar, please provide your approval HERE by COB Monday, March 31.

AA Grounds MD-8os; A Vivid Oversight Contrast

The Associated Press today broke a story regarding American Airlines cancelling some 200 flights at ORD and DFW to ensure wiring bundles on its MD-80s were installed and secured according to an airworthiness directive. It is not known if the wiring results left American out of compliance.

This joint FAA / American exercise is how the oversight system is supposed to work. Consider two examples: the March 20 grounding of United’s 747s and today’s grounding of American’s MD-80s.

UNITED AIRLINES

The FAA and the carrier had relatively little access to the Ameco maintenance facility in Korea until after the problem was discovered.

AMERICAN AIRLINES

American was able to efficiently dispatch teams to review and or fix the harnessing to ensure compliance. Importantly, because American’s maintenance is performed at its U.S. maintenance bases, FAA personnel had ongoing access to American’s line staff, supervisors, aircraft, log books, mechanic’s Task Cards, maintenance manuals, engineers and maintenance control, i.e. where the planes are sent for inspection and modification. What’s more, there are ample FAA inspectors to immediately engage the issue.

The upshot of this vivid contrast is that airlines that are unwilling to have this kind of FAA scrutiny have no incentive to maintain their fleets in the U.S. It’s cheaper and there is less oversight by an order of magnitude when maintenance is performed overseas, sometimes even in non FAA-certificated repair stations that the FAA does not even know exist.

BTC believes that at this time an independent and expert top-down review of the FAA should be undertaken to review its mission, organizational structure, funding, culture and systemic problems. We encourage Congress to consider a directive to the National Academy of Sciences, Transportation Research Board, to perform such a thorough review of the FAA. 

EDITOR’S Note: A growing crisis in U.S. regulatory oversight of airlines’ maintenance programs and practices has emerged as recent developments and press stories have established. (See reports and analysis here.) To support a Signatory Letter to House Transportation Committee Chairman James Oberstar, please provide your approval HERE by COB Monday, March 31.

United Airlines Grounds 747s

The Dallas Morning News broke a story this morning regarding a Congressional inquiry into the FAA’s handling of a Continental Airlines’ mishap. The paper writes: “A congressional committee is investigating regulators' decision to grant immunity to Continental Airlines pilots for mistakes that led to an El Paso mechanic being sucked into a jet engine in 2006… The FAA granted amnesty over the objections of a veteran safety inspector, Phil Thrash, who reported his concerns to the FAA's administrator and the U.S. Department of Transportation's inspector general… They washed their hands of the whole matter," Mr. Thrash said of FAA managers. "It was a cover-up.”

Late this afternoon, the Wall Street Journal reported that United Airlines today has grounded up to 6 Boeing 747 jumbo jets because of faulty work performed by a foreign aircraft maintenance facility in Korea. On the heels of the unfolding Southwest Airlines / FAA debacle, this is more evidence that Congress must act with a sense of urgency to pass the FAA Reauthorization bill, which includes measures to address a growing threat to passenger safety and homeland security. 

“There are multiple standards for aircraft maintenance regulations, FAA oversight and TSA security regulations,” stated Kevin Mitchell, Chairman of the Business Travel Coalition. “Inexcusably, the Reauthorization bill is stalled in the Senate over a $25.00 landing fee, to balance out the financing of the system, while a vividly clear and present danger to passengers and our homeland increases daily. If this Senate impasse is not resolved in coming weeks, there will be no Reauthorization bill for at least another year.

Mitchell continued, “This failure of leadership on such a strategically important issue to this country is regrettable. There is simply no problem in commercial air transportation today of greater consequence facing the government, industry and consumer. BTC calls on Senate leadership to help resolve this gridlock and move the Reauthorization bill forward. Importantly, Congress should add to the bill a directive to the National Academy of Sciences, Transportation Research Board, to perform a top-down review of the FAA.”

For additional background on this issue visit BTC's Aircraft Maintenance Outsourcing Issue Center.

Business Travel Coalition Poll

Today in Chicago a group of corporate travel managers, TMC executives and other concerned industry participants will meet to discuss the Air Canada Tango controversy. I will report on the gathering in tomorrow’s blog. One subject we will most certainly discuss are the results of a recent Poll regarding steps individual travel agents and travel managers are taking in the marketplace to communicate their displeasure with Air Canada’s actions. Those results follow.

Between June 25 and June 30, 2006 the Business Travel Coalition conducted a poll of travel agents and travel managers to determine what steps are being taken in the marketplace to communicate to Air Canada the industry’s dissatisfaction with the airline’s removal of its Tango fares from the GDSs. Twenty-one corporate travel managers and twenty-four travel agents participated in the poll.

Poll Results

I. I have taken the following independent steps to register my dissatisfaction with treatment by Air Canada: (all that apply)

31 (22%)  Investigated alternative airlines.                                                            
31 (31%)  Stopped using / selling AC whenever alternatives exist.                         
18 (13%)  Voiced concerns to my AC representative.       
24 (17%)  Asked my industry Association to defend my company’s interest.                      
23 (16%)  Was a Signatory to an industry letter to AC.                                                      
  9   (6%)  Attended / listened over the Internet to the ACTA / BTC Toronto conference.       
3    (2%)  Contacted elected officials / regulators.                                                            
1    (1%)  Wrote a letter to my local newspaper. 

COMMENTS

• I will only book AC only when it is absolutely necessary; I book United as they have almost the same choice.

• WestJet loves Travel Agents!

• I would love to tell my AC representative, if I ever saw him/her!

• As far as I can see the sooner we can do without AC the better. They continually cause disruption and controversy. My clients do not want to use them if there is any other option.

• Dealing with the staff as they are so miserable to both clients and agents is terrible; the less I have to do with them the better. When we do call it is like we are interrupting them and they have no concern regarding the clients or the agents. They cannot be bothered. This has come through loud and clear. Until I see an attitude adjustment I will do whatever I can to encourage my clients and everyone else to not use AC. So put the fares back or not I am done with them. I am tired of being abused by them and dealing with the unhappy clients that have the misfortune to have to fly with them.

• We do not do volunteer work for any airline; only if there is no alternative do we sell zero-commission services.

II. Since May 3, my organization independently moved business away from AC in the approximate amount of:

28 (80%)  $1,000 to $100,000 (Canadian dollars)
  5 (15%)  $101,000 to $200,000
  2   (6%)  $201,000 to $300,000            

COMMENTS

• We reduced our domestic traffic on Air Canada by 42%.

• I am not sure of amount, but AC is almost becoming irrelevant in my office.

• We are a small agency but if you look at percentage, and not dollars, you can see I have moved as much as possible away from them.

III. Other steps my organization has taken:

COMMENTS

• Weekly conversations with my TMC regarding fragmentation costs.

• Increased the use of web meetings because our strict internal company policy requires that employees book their travel through a designated agency so we can locate them in the event of an emergency. We have reiterated to all travelers that they are not to use the AC Website directly.

• We now must allow travelers to bypass the newly installed self-booking tool and this increases the transaction cost to our company because they now secure travel arrangements with our preferred agency.

• To offset some of these increased expenses caused by the Air Canada action, we have cut back on some travel.

• Opted with lower fares with competitors such as WestJet in Canada and on trans border routes.

• Investigated web scraping for on-line reservations; encouraged Agency to participate/communicate on our behalf.

• I try not to sell AC in other markets as well, e.g., international destinations.

• Held a conference call for all clients. Prepared a template of a letter for our clients to send AC directly.

• Encouraged use of online tool that can search ac.com. Encouraged agency partner to offer online search capability through their process.

• Posted a sign regretfully informing our customers that we have been banned from the least expensive fares by Air Canada and that they will have to book AC themselves. (Very regretfully since many clients have no access to the web or do not have a credit card.)

• I book WestJet, CanJet, United, US Airways; anybody but AC when possible.

• Other than reducing our sales to AC to show our dissatisfaction we as an organization have no other option.

• We do not offer Tango fares to customers, ever.

• We have been telling clients what Air Canada did and what the effect may be on them.

• I am not selling them so I need no other steps.

Air Tight in the Windy City or Defining Full Content Once and For All

In my last couple of posts I've talked about the need for air-tight commitments from the airlines to full content and protection from discrimination.  Corporations provide too much high-yield business to airlines to be given anything less than an air-tight commitment to full content.  And corporations shouldn't be discriminated against for the GDS they choose; it should be your choice, particularly because of the value you bring the airlines.  (As one corporate travel manager said yesterday here at the NBTA Convention in Chicago, "It's a lot easier to switch airlines than GDSs.")

I was drafted onto a panel today in the “Nobody’s Content With Content” session to represent corporate travel departments when a panelist could not attend. It was lively and all the threshold questions came up. The “F” word, fragmentation, and concerns about it, was raised by members of the audience and the panel alike. It was clear travel managers want serious commitments to full content through their GDS.

But what do we mean when we say "air-tight commitments to full content" and "no discrimination?"

Full content means exactly that: everything.  It's all fares made available for purchase by the general public at any reservations outlet:

• Published fares -- from any channel that are broadly available/published

• Web fares -- whether the airlines or an online agency

• Promotional fares

• Private fares

We've heard about airlines wanting to keep the right to send promotional offers to "targeted groups" of their travelers.  If it's not well-defined, a "targeted group" could mean "only their frequent flyers," which of course is tens of millions of people, and probably a great percentage of your travelers.  (See my previous posting about what happens to your travel program when airlines are allowed to make offers you can't make to your travelers.)

Then there's non-discriminatory access.  You shouldn't be discriminated against because of the GDS you use. You should have non-discriminatory
access to all private/unpublished fares including:                                 

--bulk fares
--consolidator fares
--corporate negotiated discounts
--group fares
--meeting and convention fares
--net fares

It's important that we get this right.  Everyone should be asking their
GDS and their airlines about this.  Will you get access to truly full
content, or will there be holes in the promise?  Will you be
discriminated against because of who you do business with?

The answers should be unequivocal.

Air Canada Needs to Restore Tango Fares to GDSs

Republished with permission from The Beat.

By: Christiane Théberge, Vice-President, Public Affairs, Association of Canadian Travel Agencies; Lyell Farquharson, Spokesperson, Canadian Corporate Travel Association; Kevin Mitchell, Chairman, Business Travel Coalition

Reacting to the outcry against its heavy-handed, surprise decision to withdraw access to its Tango fares, Air Canada has taken a step back to restore a connection with professional travel agents who sell 70% of its tickets.  Air Canada has announced the return of Tango fares to the Air Canada agency web portal with a credulity-straining proclamation that the airline’s “concern has always been the agencies’ access to content in an environment they can work in.”   We’re glad Air Canada is finally talking, but travel professionals are right to maintain their skepticism of the nation's dominant airline. The real opportunity for Air Canada to achieve alignment with its air travel distribution partners, and corporate customers, is to return Tango fares to the Global Distribution Systems (GDSs) without delay.   

An airline serious about developing a good working environment for travel agents would in fact do well to talk to travel agents. Travel agents are still waiting for the phone to ring. This leads us to ask if consultation is a long-term priority for Air Canada. Most Canadian travel agents would tell Air Canada that the web portal is a woefully inadequate place to do business, just as it is for agents in the U.S. and elsewhere in the world. Yes, we’re glad that Tango fares are available through this relatively inefficient channel, but if Air Canada’s leaders are expecting hearts and roses from the agency and corporate travel manager communities, they should be seated while they’re waiting. 

Travel professionals do not want to be forced to navigate unique supplier websites in order to serve their customers when a far more welcoming and efficient distribution platform exists – namely, the GDS. In the U.S., the National Commission to Ensure Consumer Information and Choice in the Airline Industry in 2002 studied this issue in depth and concluded in its final report to the President and Congress that web portals, among other things, do not allow agents to control the passenger record, to serve as a value-added travel manager, to work quickly and efficiently, to consolidate financial records and to keep all passenger profiles in one place. The report concluded that “the lack of integrated information imposes costs on agents, both for separate search equipment and in the extra time required to perform the searches. These costs will ultimately be reflected in service charges to consumers.”

Marc Rosenberg, Air Canada’s distribution head, tells us that Canadian agents have a different model than those who work in the U.S. He says that Canadian agents who are used to booking low cost carriers have been programmed differently to embrace and accept the Internet where their American cousins have resisted. He says that Canadian agents looking for data in one single source have been able to accomplish that by acquisition of third-party software. Here’s the truth Mr. Rosenberg: from a travel agency perspective, web portals just don’t cut it, including Air Canada’s. They create the need for expensive and inefficient workarounds. They distract travel agents from giving their customers optimal service.   

The history of travel distribution boils down to three essential, related themes: competition, content and control. Dominant airlines like Air Canada appear to believe that if they can withhold access to fare content from distributors, they can seize control of passengers by forcing them into the company store. To this we say: “Air Canada, many customers resent this treatment.” Business and leisure travelers alike say “no thanks” to being deprived of personalized, streamlined, value-added service that facilitates travel shopping and buying – the sort that comes from a travel agent automated by a GDS. Air Canada should back up its rhetoric about concern for travel agents’ working environment with good faith action – instead of a small step, it should take all the necessary steps to restore Tango fares to the GDS so that we can all focus on what’s important: serving our end-customers the best way we know how.

In the Eye of the Storm?

As I attended today’s “Perfect Storm” panel discussion here at the NBTA convention, I couldn’t help but think about how appropriate that title was.  While many people here are saying that the recent airline and GDS announcements signal eventual calm waters ahead (even if they are costlier calm waters), I fear that the calm some are feeling is only the eye of the storm.

In fact, I’ve become even more convinced in the last 24 hours – talking with people here – that American clearly has demanded loopholes in its GDS contracts.  This makes the yet-to-be-completed negotiations between American and Sabre all the more critical. And it means that corporate travel managers must act to ensure they don’t find themselves in the storm of a fragmented marketplace once again. Questions and comments from the floor of the “Perfect Storm” session underscored the disbelief travel buyers feel that their airline partners would knowingly heap extra fragmentation, complexity and costs upon them.

Why is fragmentation a bad thing for corporate travel managers?  It comes down to the three C’s: Credibility, Control and Costs.

If airlines are able to offer fares and send special promotions to travelers – including your corporate travelers – and those offers aren’t available through the corporate travel program, the program loses its Credibility.  The recent action by Air Canada, pulling its lowest fares out of GDSs, is hurting corporate travel programs north of the border.  It’s this kind of action that I trust Sabre is trying to fend off in its negotiations with American.

With your program’s Credibility eroding, travelers feel justified in – in fact they feel good about – “saving their company money” by using other means to secure lower fares.  That cuts into your ability to Control a corporate travel program.  What was an integrated program – with clear insight into what suppliers are doing and where travelers are going – is now fragmented and unmanageable.  You no longer know all of your travelers who are in a location when terror strikes or a tunnel implodes.

And ironically, those travelers trying to “save the company money” by using outside channels are now driving higher Costs.  They have hurt your ability to negotiate with suppliers.  You have less leverage because the travel spend through your program is less.  And now the airlines can extract exactly what they want: higher prices – in the form of reduced discounts.

Alternatively, if you try to build work-arounds and other tools to bring these offers into your system, or capture these out-of-system bookings, you’ve also increased your Costs.

We need to avoid this storm.  We need to take advantage of our access to airlines and GDSs this week to make absolutely sure they know where we stand.  We won’t stand for another fragmented marketplace, with no Credibility, no Control and higher Costs.   We expect that full content means full content…that protection from discrimination means real protection.

Reading Between the Lines

As we head into NBTA’s 2006 Convention, the news seems to be coming fast and furious at all of us. 

Last week alone, American announced its “Source Premium Policy.” Next came Galileo’s “Content Continuity Program,” followed by United’s “Distribution Channel Policy.” Worldspan said it will announce its “Optional Product 1” late this week. All of this comes on the heels of Sabre’s announcement of its Efficient Access Solution in June.

What do we make of all of this? What should we be concerned about?

Obviously, it looks like there is no way around cost increases. That’s bad news. But it actually could be worse…the cost increases could actually come without the full content you are paying for. And fragmentation of content would undermine corporate travel programs and raise costs further.

With all the secrecy in the airline-GDS agreements, I’m concerned about fragmentation for two reasons:

1) Airlines’ actions during the past three years tell us that they sign agreements and then try to go around them. Air Canada is the most recent example. So how can we be sure that “full content” really means full content?

2) From what Sabre said in a note to agencies last week, its breakdown in negotiations with American centers on getting air-tight commitments to content protections for agencies. If Sabre – the GDS through which the largest number of American’s bookings flow – can’t get the protections it thinks it needs from American, then we have to wonder whether anyone has secured air tight content protection from American yet.   

Galileo’s note to agencies seemed to indicate that it would rely on Sabre to secure all content, saying that its full content would be “equal to or better than any other GDS system.” That’s code for a most-favored-nation clause, which tells us – given Sabre’s stated concerns about American – that it must not have full protections (yet) written into its contracts with airlines.

Without true full content, things could unravel quickly for corporate travel programs. Travelers could find content on airline Web sites and ignore travel policies, undermining the integrity of the travel program. Then there are security problems: Tracking travelers in Mumbai, Madrid, London or Lower Manhattan would become a nightmare. 

Doing workarounds to include content somehow not included in “full content” could be costly. All of this puts the corporate travel program in jeopardy.

Without a strong corporate travel program managing airline pricing, costs go up. But then again, that seems to be what airlines want…fragmentation, leading to less control by corporations, leading to higher fares.

It’s bad news that costs will go up on the front end. It would be devastating news if costs went up because of fragmentation. 

This week, every travel manager should be pressing their GDS and the airlines at NBTA to ensure that all risks of fragmentation are completely off the table.

BTC Questions for Air Canada

Stakeholder collaboration is the straight-path to commercial success

The Business Travel Coalition today published questions regarding the Air Canada (AC) Tango controversy. BTC believes that AC took a good first step in reinstating Tango airfares in its travel agent portal, but it needs to take customers out of the crosshairs in its dispute with GDSs. The questions are designed to help AC better analyze the long-term impacts of its actions that might seem rational to it at the firm level, but that at the industry level causes significant collateral damage for all participants in the distribution chain. BTC encourages AC to consider these questions and to reinstate Tango fares in the GDSs straightaway.

QUESTIONS FOR AC’s CONSIDERATION

Customers

1. What are AC’s responses to concerns raised by agents and corporate travel managers regarding content fragmentation that is leading to: a) additional cost burdens of searching the AC travel agent portal, or implementing expensive workarounds; b) higher prices paid due to less visibility to fare options; c) compromised traveler security when travelers go to ac.com; d) automated booking strategies being frustrated; e) compromised data gathering; and f) eroding corporate travel program credibility.

2. Does AC have concern for the additional service fees consumers are paying due to agent inefficiencies created by forced-use of the sub-optimal AC agent portal?

3. Does AC believe that consumers will not vote-with-their-wallets when they realize an apparent objective is to reduce competitive choices by driving consumers to ac.com where comparison shopping is not a functionality currently offered to customers?

4. Why are AC’s agreements with the GDSs not forward-looking with respect to a process for enhanced functionality for new products, and absent such a plan, why would AC think it acceptable to hold its best customers hostage as it negotiates a resolution with GDSs?

Competitors

1. Why does AC believe that it can succeed with a content fragmentation strategy when such strategies failed outright in the U.S. early this decade?

2. Is AC concerned that its actions could drive customers into the open arms of LCC segment airlines just as network airlines did in the in past years with various flawed policies?

3. If AC’s Tango action represents the first phase of a fundamentally new distribution strategy, then what does the unprecedented negative reaction of the industry portend for the acceptance of this new strategy going forward?

Government

1. Is AC reading the stories of a growing number of Canadian consumer business press who are suggesting that AC does not “give a damn about its customers” and that a possible sea change in thinking about AC is at hand among AC’s various publics that will harm the airline over the long term?

2. Is AC concerned that the Canadian government’s evolving analysis might just be that AC seems to possess market power sufficient to override the serious concerns of its major customers who spend millions of dollars annually with AC?

3. If major customers are being mistreated, what does that suggest with respect to the average consumer?

4. Is AC concerned that the expanding coalition of industry and consumer organizations responding on behalf of constituencies negatively impacted by AC’s actions will support potential legislation to remedy AC’s market power and provide consumers with some measure of buyer protection?

AC Shareholders

1. How has AC’s revenue been impacted by the pulling of Tango fares out of the GDSs, by GDS’ responses and by the shifting of cargo business by some major corporate customers?

2. How great of a financial hit has AC taken; how long is AC willing to absorb this kind of marketplace response?

3. How could a policy that drives all other industry participants’ costs up, creates so many other problems and institutionalizes displeasure with the airline, be beneficial to AC in the long run?

4. Should AC shareholders be concerned about self-inflicted damage to AC’s brand name and public image?