The Transportation Department made the
right call when it decided to offer airline rights to Virgin
America, but the government should not have insisted on the ouster
of the carrier's CEO, Fred Reid.
True enough, Reid
volunteered to step aside as a gesture of good faith to silence
critics that he was some sort of stooge for Virgin Group's
chairman, Richard Branson. He even signed an affidavit that his
loyalty was not to Sir Richard, who first selected him, but to
Virgin America's U.S. citizen-dominated board, which reappointed
That should have
Instead, the DOT
made his departure a condition of its approval, even though there
is no evidence that Reid, a former president of Delta, is anybody's
For decades, the
Federal Aviation Act required, among other things, that the
president of a U.S. airline be a U.S. citizen. A few years ago,
Congress added the requirement that the airline also be under the
"actual control" of U.S. citizens. This vague and meddling act has
led, in the case of Virgin America, to a virtual witch hunt for any
taint of foreign influence.
This is an ugly
precedent. Now any officer of a start-up airline who is a U.S.
citizen may have to prove a negative ("I'm not a foreign mole") in
order to survive attacks by organized labor and network
European Union Council of Ministers last week approved a new
aviation accord that will further open air travel between the U.S.
and Europe. The agreement also calls for further talks to
liberalize our antiquated rules on foreign investment and
That can't happen
soon enough if it will put an end to this kind of regulatory
Small ships and big airplanes are in the
news -- and it's good news. A week ago in our news pages, we
reported that there's still a viable market niche for "small"
ships. Oceania and Silversea confirmed it, both ordering new
vessels that, like the new ships ordered by Seabourn last year, are
smaller than small cities.
Within days, the
U.S. hosted demonstration flights of the next-generation flying
behemoth, the Airbus A380.
These are welcome
developments, for they prove what's good about this industry: its
dynamism and its responsiveness to consumer demand and market
Until a very short
time ago, it was the consensus among cruise people that the
economics of big-ship cruising were so good that it made no sense
to invest in small ships for 1,000 or fewer passengers. They were
right, at the time. But Seabourn proved them wrong last year,
convincing its parent, Carnival Corp., to build two 450-passenger
vessels. The tide was turning, and now there's even more new
hardware in the pipeline for the upscale, small-ship
In the air, which
is even more fickle than the sea when it comes to travel, Airbus
has created an airplane that has the potential to give passengers
what they have always craved: more space. Although it's over budget
and behind schedule, the A380 is here and it works. In time, it
will become a familiar sight at the world's great hubs.
The big question is
whether the economics of big airplanes will drive the airlines to
pack it with seats and rob it of the airy feel that Airbus has
proudly given it.
Silversea to squeeze 2,000 berths into the ship it just ordered,
but, alas, we don't have that kind of faith in the