Great December 2011 article from The Atlantic, Tech Has Saved the Postal Service for 200 Years — Today, It Won’t.
The American post office has been in place for 200 years of continual growth and change. Look at the various evolutions – horse and carriage, railroad, exploding suburbs and road systems, universal delivery six days a week, and competition from the telegraph, the telephone, radio, television, UPS/Fedex, fax machines, email, and Skype.
For 200 years, the Post Office has succeeded by adapting new technology to the task at hand, and paid for that new technology by spreading the investment costs across a continually growing volume of mail traffic.
Today’s mail service, while much maligned, is a marvel; unlimited access, universal delivery service, and continual technological improvement. People could pop into an open post office and ask for any service they wanted, on the spot, no corporate account necessary; the package would be delivered to absolutely any address in the United States.
This marvel of continually improving technology was paid for by continually increasing volumes – until the volume peaked in 2006, and it’s been decreasing ever since.
This is very bad news for the USPS. Their basic economic model is predicated on increasing volume. Maintaining unlimited access and universal delivery in the face of decreasing volume is fiscally unsustainable and will not permit any new technological investments.
Decreasing volume is the primary challenge to the American postal service today. Technology will not help it to continue operations while maintaining unlimited access and universal delivery.
Of course, that’s the Post Office. What does that have to do with aviation, except of course that the economics of American aviation really came out of the post office?
Today we see this article from Reuters, Flights by U.S. airlines hit 10-year low:
WASHINGTON (Reuters) – U.S. airlines in 2011 operated the fewest number of flights since the hijack attacks on New York and Washington depressed air travel and accelerated the industry’s worst-ever financial downturn, government figures on Tuesday showed.
The Transportation Department said major airlines, their chief low-cost competitors and the biggest regional carriers, recorded 6.08 million departures last year. Takeoffs were not that low since 2002, when they totaled 5.27 million.
The overall number of flights by U.S. airlines have steadily declined since 2008 when the recession dampened travel demand. Most recently, stubbornly high fuel prices have prompted airlines to further cut capacity to reduce costs and maintain higher fares.
Some analysts believe the American bankruptcy is preparation for more consolidation and flight reduction.
If the post office cannot invest in new technology and maintain unlimited access and universal service in the face of decreasing volume, how can aviation?