NEIL CAVUTO, HOST: Is it time to let the weaker airlines (search) fall by the wayside so we can make room for the stronger ones? Yes, says Congressman John Mica, he’s the chairman of the House Aviation Subcommittee (search).
Congressman, why do you say that?
REP. JOHN MICA, R-FLA., HOUSE AVIATION SUBCMTE. CHMN.: Well, I think it’s sort of a natural business evolution in a free enterprise system. You can’t sustain, as I have said in the past, dinosaurs. You have got to evolve or you will vanish from the Earth.
CAVUTO: All right. But let’s say you get rid of the weaker ones, Congressman, and you’re left with two or three super carriers, then they’re free to gouge folks, aren’t they?
MICA: Well, that’s not happening at all, Neil. You have many low-cost carriers (search). I have five low-cost carriers that made a billion dollars in the last year. We have five majors that lost 2 billion. Now that’s somewhat good news because the first year after September 11th they lost $10 billion. So their losses are down, but they’re going to have do what Delta did today. They’re going to have to make some painful adjustments to labor and operational costs.
CAVUTO: But would you fly those airlines that are undergoing those cutbacks? I know I sound very Oliver Stone-ish here, but I get very leery when I hop on an airline whose pilots or machinists have just made these huge wage concessions, they’re not happy campers.
MICA: Well, again, we have a very good inspection system. Actually flying in an aircraft -- passenger aircraft in the United States is probably the safest thing you could do. For the past two years we haven’t had a commercial -- major airline crash.
CAVUTO: Congressman, you’re right, you’re right. But how do you know in cases there that some safety isn’t compromised in airlines that are under tremendous duress?
MICA: Well, the airlines don’t do all the inspections. That’s what we have FAA for. So we’re monitoring them carefully and those under financial duress do get some extra scrutiny.
CAVUTO: All right. So let’s say Delta doesn’t get its act together and these cutbacks don’t do it and it goes out. US Air, that seems to be on the brink. So you’re left with maybe a couple super guys, Continental, possibly American, although that’s no sure bet, and then all these regional guys. Is that going to be enough to cut it for all our demand?
MICA: Well, if you just look at what has happened in the last few months, Independence Air has started a whole new network on the East Coast, Virgin America is coming online next year, will service markets across the country. These low-cost carriers are going to be the way of the future. It’s happened in Europe, it’s happening in the United States and we’re not going to change it any more than we’re going to eliminate Wal-Mart or Staples or Home Depot.
We have seen corner hardware stores go by the wayside and that’s tough, it’s difficult. We have seen five and dime stores being replaced. Again, it’s difficult. But that’s the nature of our society and our economy. You can’t have government underwriting losing operations, it just won’t work.
CAVUTO: Even though they do that in Europe, right?
MICA: They do, but you can see the same thing, Air Italia, it’s much more difficult because they’ve subsidized to an even greater extent, so it’s more painful. You know what the largest carrier in Europe is? It’s Ryanair. People in the United States haven’t even heard of it. They have probably a dozen low-cost carriers that are capturing that market and doing a good job.
CAVUTO: Congressman, all valid points, worth considering, John Mica, the Republican from Florida. Congressman, thank you.
MICA: Thank you.
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