Human Spaceflight: History Lesson No. 1

OK, still reading through the Review of US Human Spaceflight Plans Committee report, which has come to be known as the Augustine report, after the committee chairman, Norman Augustine.

One of the things that's referred to more than once is how, back in the 1920s, the US government stimulated the development of air travel by issuing government contracts to the newly-formed airlines to carry air mail. Aviation history has always been a hobby of mine, and I think that this particular bit of history has some lessons that we need to be aware of.

Yes, the government did indeed issue airmail contracts back in the 20s. When the first bids were solicited, there were over 5,000 applicants, but only 12 were selected. The victors, in an effort to expand and make more money, soon were undercutting each other ruthelessly on their airmail contracts, trying to take each others business. In an effort to restore order, Postmaster General Walter Brown, a very well connected Republican and close associate of then-President Herbert Hoover, sought and was given authority by Congress to award postal contracts regardless of the amount bid. Brown then imposed his own will on the nascent airline industry, consolidating the field down to just four: United Aircraft and Transport (later United Airlines), Transcontinental & Western Air (later TWA), American Airways (later American Airlines), and Easter Air Transport (later Eastern Airlines).

Three years later, in 1933, Senator and later Supreme Court Justice Hugo Black decided to hold hearings on the status of the airmail contracts and learned of what then became knows as the 'spoils conference' three years earlier, when Brown awarded the Big Four airlines their airmail contracts outside a competitive bidding process. Federal agents stormed airline offices around the country, seizing evidence of the grand conspiracy, and then-President Roosevelt ordered the airmail contracts cancelled, ordering the military to carry the airmail instead.

This in and of itself turned into another fiasco, as the military, after 15 years of neglect following the end of World War I, was woefully unprepared to fly the mails. They lacked the training and equipment necessary to fly in bad weather, and in short order 12 Air Corps pilots died in crashes directly related to flying the mail. Roosevelt was forced to relent, but to save face he ordered that none of the former four big winners of the spoils conference would be awarded new contracts. This is when the big four changed their names to match what we know today: United Air & Transport became United Airlines, American Airways became American Airlines, and so on. The big four managed to regain almost all of what they had, but two upstarts managed to shove their way in: Braniff Airways and Delta Air Lines.

Congress also got into the action, mandating that all airmail contracts would go to the lowest bidder, regardless of other considerations. They also established a time limit on the contracts, so they were periodically re-opened for bidding. This led the airlines to once again agressively undercut each other. In one example, Braniff bid on an airmail route from Houston to San Antonio (a distance of about 210 miles), at a rate of $0.00001907378 per ounce per mile, which would then result in a revenue of $0.004 per ounce per flight. Eastern, in an effort to cut into Braniff's route structure, bid $0.000000000 per ounce per mile--carrying the mail for free.

With diminishing revenues, something had to give at the airlines. What gave was maintenance, new aircraft, and crew training. Inevitably, this led to accidents and crashes, several of them involving celebrities and other notables. In a bind, the 'captains of industry' that headed the airlines went to Washington, to President Roosevelt, and made the stunning plea to have their industry regulated by the federal government. Riding the wave of public sentiment after the string of crashes, Congress and President Roosevelt created the Civil Aeronautics Act of 1938, which in turn created the Civil Aeronautics Board, which then regulated the entire air transportation industry for the next 40 years. So the airlines had their routes and fares regulated by the federal government, establishing state control over the entire industry (sounds sort of communistic to me, but it worked). No airline could operate between the states without the CAB approving the route, the number of flights, the number of seats on the airplane, the fare they could charge, etc. Essentially the CAB turned the airlines into public utilities; in exchange for allowing themselves to be regulated, the airlines were guaranteed a small but reliable profit.

The airlines had proved unable to regulate themselves into providing a safe, reliable service, due to their own cutthroat competition between themselves. The aircraft manufacturers during this time were developing better, safer, and more capable airplanes, but the airlines were only barely able to buy them, due to a lack of revenue resulting from their own efforts to drive each other out of business. The CAB regulations changed all that; now that the airlines had some stability to their cash flow, and that flow was sufficient to guarantee at least a small profit, the airlines could afford the better and safer airplanes.

Despite the firm grasp of Big Brother on all aspects of their operations, the airlines grew and prospered, and created the basis of the air transportation system we have today. There were major shake-ups after deregulation of the airlines in 1978 (resulting in only three of those original 6 still being around today), but we've once again reached a point of equilibrium (albeit a relatively shaky one) with the airline industry today.

So . . . if our goal in space over the next several years is to try to encourage commercial development of space transportation by contracting governmental flights through commercial entities, we need to be very careful on what we do. We also need to have extremely close governmental scrutiny of exact what those contractors do and how they do it. Unfortunately we don't exactly have much in the way of government regulatory guidance in place to make this happen. More on that later; I still have to work for a living.