SO I WAS OUT HAVING DINNER this evening when, through no fault of my own, I accidentally took notice of "The O'Reilly Factor" on a television in the restaurant's bar. Normally, exposure to the No Spin Zone sends me spinning with a bad case of ennui, but during this instant the show had asked its viewers to respond to a snap poll over a Major Issue Facing Americans Today. Namely, which is worse -- the oil companies or the airlines?
This type of question does not bode well for the launch of the Fox Business Network. Still, as I savored my filet mignon this evening, this silly and foxtastic question got me to thinking for a few minutes. The answer, at least to my mind, is obvious. It's the airlines, of course. Here's why:
Oil companies and their associated refining operations produce scarce goods (oil, gasoline, diesel and other various distillates) that are universally needed. Airlines, for their part, provide a universally-needed service to their customers. In each industry there are limited suppliers and extremely high demand; both industries operate under significant Government regulation and restrictions on their activities; and both industries would have trouble sponsoring an event honoring motherhood and apple pie, much less their own core business activities.
But there are significant differences between these two industries. Although oil companies' products are expensive, their products are universally available to purchase if one has the money, and the products do what they're supposed to do: run engines. After all, when was the last time you went to the gas station and you couldn't get any gas for love or money? For young people like me, that would be never. You might not want to pay upwards of $3 per gallon for gasoline, but the stuff's there when you need it. Plus, here's another good thing about oil companies -- they make money for their shareholders, which last time I checked was why companies were in business.
Contrast this state of affairs to the airline industry, where mismanagement and incompetence has been raised to an art form par excellence. Air travelers whose flights are on time and whose luggage arrives intact don't simply expect that as par for the course. These days, they consider it lucky, and on some airlines, miraculous. While the oil industry gives you oil and gas for your money, airlines give you travel -- but with nothing near the reliability and friendliness you get at your local gas station. Every air traveler has had awful experiences: the unexplained cancellations, the overbooked flights, the frustrating waits on standby. Hell, things are so bad these days the Dalai Lama would have trouble keeping a cool head, especially if he was flying Northwest.
Plus, when was the last time you heard about an airline's stockholders making out like bandits? (I mean, aside from Southwest). Over the decades, the airline industry has blown through untold billions of investors' dollars trying to keep the large carriers afloat, and it will undoubtedly spend billions more in the future. It would be one thing if they were making money hand over fist, but they're having enough trouble keeping the lights on.
Even on style points, I have to give the oil companies the edge. After all, no one was griping and moaning about their plight back in the late Nineties, when the stuff sold for $10 a barrel and gasoline could be found for 79 cents a gallon. Now that oil's more than $70 a barrel, suddenly the oil companies are the greatest threat to the American way of life since disco music. I am sorry, but I don't buy it. As unlikely as it may seem today, the price of oil may very well crash again far off in the future -- but you'll still be able to procure the goods without any trouble whatsoever. I long for the day when the same can be said for my flight out of Detroit.Posted by Benjamin Kepple at July 11, 2007 10:20 PM | TrackBack