As much as Republicans like to talk about the inherent evil of 'big government' under the Democrats, they are missing an important point: during the Clinton administration, the federal government has indulged in an historic bout of downsizing.

In aviation matters, the public focus of the budget cuts has been on the DOT's Federal Aviation Administration. But now, a band of aviation consultants and airport interest groups has begun to complain that Department of Transport ation budget cuts are affecting the information-gathering processes that have for years produced detailed airline financial and operating data, including the quarterly Form 41 financial and operating report, T100 origin-and-destination traffic information, and the Immigration and Naturalisation Service (INS) survey of international travel.

The INS survey, which documents traffic makeup and growth in air travel between the US and other countries, has already had experience with budget cuts: three years ago, it went offline for a year-and-a-half. Now, the other reports are falling behind - the O&D is currently more than a month off schedule - and the quality of the information is lessening, critics say.

Why? All fingers point to the DOT's Research and Special Programs Administration (RSPA), which has been collecting the data since the old Civil Aeronautics Board, which oversaw the US airline industry prior to deregulation in 1978, was phased out in the early 1980s. When that occurred, many staff positions were cut, including 'field auditors' who ensured airlines were not bamboozling the government with funny numbers.

Since the CAB's sunset, RSPA administrators have given decidedly low priority to aviation. There have been no new hires in the aviation analysis unit, and the 'institutional knowledge' of aviation there has been declining as experts retire. This process has picked up significantly since October 1993, when RSPA began an early retirement scheme.

The experts number fewer than 20 now, resulting in information with 'more holes.' A DOT source says 'there is a lack of quality people' administering RSPA. Shockingly to consultancies like Global Aviation Associates, Kurth & Co and SH&E, RSPA is now giving collection and dissemination of the airline reports over to clerical staff. The concerns have prompted nine aviation consultancies, along with the Airports Council International and airport interest group USA-Bias, to join forces in a campaign for better data.

The biggest problem, say the information experts, is that these cuts are occurring as the airline industry is evolving quickly into new, and as-yet unquantifiable, realms - specifically, codesharing and ticketless travel. With codesharing, where two carriers share passengers via on-line connections, the sampling methodology currently in place does not account for a passenger who buys a ticket on a US airline (Delta, for example) but actually flies with a non-US carrier (say Delta partner Swissair). This is because the 10 per cent O&D sample is pulled from tickets used on US carriers. With ticketless travel, which uses computer reservations with no ticket stubs, there is no paper trail that can be relied upon to sample the data. 'We would have to rely on the veracity of the airlines,' says Douglas Abbey of AvStat.

The Air Transport Association says airlines can be trusted since they cull the reported numbers from internal sampling systems that they themselves rely upon. Unfortunately, this may be a 'disconnect.' Like that buzzword - Washington's latest favourite - reported numbers can seemingly make sense but may actually be meaningless. Many aviation statisticians fully understand that DOT reporting data is almost never audited and is often flawed. 'If you add up all the traffic data, it's probably okay,' says one DOT official. 'But specific city pairs can be pretty inaccurate.'

There are plenty of examples where airlines have given DOT late or incorrect data for public filing requirements, the most renowned being Chicago's old Midway Airlines when it tried to sell itself to Northwest Airlines in 1991. Northwest was told by the failing carrier to rely on its DOT reports, which included passenger revenues over-reported by 21 per cent and a resulting overestimate of revenues that Northwest later claimed to approach $100 million annually. Sources say that several airlines in the 'startup' category of the last three years - including ones that are numbered among the low-cost, low-fare catalysts of the current cost-cutting trend at US majors - are doing exactly the same thing as Midway.

Still, even flawed or late data is better than no data. Be sides, several data-processing firms, like Back Information Services, have been 'cleaning' the information themselves with complex cross-referencing techniques. Access to the current studies is important, says Earl Doolin at Data Base Products. 'The data could be better. Why not take this opportunity in the transition of this staff to move on? It is a matter of stricter enforcement of the regulations.'

DOT secretary Federico Peña appears to agree. As part of a recently announced international aviation policy statement, Peña noted that he supported the creation of a new economic analysis unit for aviation - a message many interpreted as an awareness of the current problem. And sources at DOT say that a full-scale review is planned, with every possible solution to the problem on the table. This could include privatisation of the collection process.

Airlines have yet to express an opinion. ATA has sent out letters to its members, with the simply phrased question: 'Should we support more funding or less reporting?' One ATA official asks: 'Why does the government need such detailed market information? Our industry is one of the most over-reported in the country.'

The answer is that the data, used by airlines and policy makers, furthers competition. But its collection needs to catch up with the rapidly changing industry. 'Information is good,' he says. 'But only if it is good information.'

The answer is that the data, used by airlines and policy makers, furthers competition. But its collection needs to catch up with the rapidly changing industry. 'Information is good,' he says. 'But only if it is good information.'

Source: Airline Business