Maven: Missed Connections on Airlines

The quid pro quo that got 'open skies' approved flew by most media outlets.
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The most common complaint I hear from readers about the business media is that they should stick to reporting the facts. Which is, of course, impossible. No, The Business Press Maven is not going to give you a sophomore-year flashback and tell you that there's no such thing as fact, that the concept of objective truth is total illusion and that everything from the definition of evil to EBITDA is wide open to interpretation.

That sort of hippie-dippy nonsense makes The Business Press Maven want to drown himself in a sink, and it will lose investors gobs of money. Absolute truths exist, but, savvy investor, realize this:

It takes more than reporting facts to get there.

You have to interpret the facts correctly and, more to the point, relate one fact to the other when there exist facts that are clearly close cousins. Only then will the reporting of the facts lead you to the truth.

Look at how these three articles on the exact same issue of foreign access to American and European airspace gets -- or fails to get at -- the truth and the way the world works, and you'll see how the business media have to do more than report the facts. They have to interpret those facts. And good investors are always asking as they read, "Are these facts being interpreted and related in a way that gets at the truth?"

This week, federal officials dropped opposition to plans by Richard Branson's

Virgin Group

, a European-based company, to start Virgin America, which will fly in American skies. The move was a necessary prelude, a last-minute horse trade with the European Union, which was due to vote on opening up newly deregulated trans-Atlantic routes to American carriers.

This pair of events -- the dropping of opposition to Virgin and the European Union's vote -- were directly related. And added together, they equaled a truth: The EU was going to approve the measure, and the airline industry, in America and Europe, was going to be transformed.

But take The Business Press Maven's hand as he leads you on a tour of the good, the bad and the ugly -- or the ugly, bad and good? -- in reporting on this issue.

First, Senor Feo: An

Associated Press

story run widely, including by

Forbes

, was headlined, "

U.S. Gov't Tentatively OKs Virgin Plan

." It went into details on the facts surrounding the Virgin decision. But it

made no mention

of the EU controversy. Whoa! The facts about Virgin set apart from the facts about the EU do not reveal the truth of the matter.

Now, Senior Medio,

The Wall Street Journal

was better, even if it still came up short of the runway. "

Virgin America May Be a New Threat to U.S. Airlines

," the headline said, telling precisely half the tale. The article is then off and running on the small-ball facts involved.

A Department of Transportation ruling is "back on track," the result of a perfunctory series of concessions by Virgin America. It might have to go through a few more motions. American airlines are not happy about Virgin's entry.

Only in the 11th paragraph, way down toward the end, do we see some sense made of the facts, and only in a convoluted way: "The ruling comes as the U.S. and Europe appear more likely than ever to approve a long-sought agreement to deregulate trans-Atlantic travel." That gets close to relating the two developments to get at the larger truth: It

was

a quid quo pro. The EU will pass "open skies," thanks to the bone thrown to Virgin, and presto: Air travel will be as transformed as it was by American deregulation in the 1970s.

The

Financial Times

added it up and got it right. Never mind paragraph 11; in an article headlined "

European airlines soar on hope of open skies deal

," the FT laid it all down and made the appropriate connection in the lead:

US authorities have dropped opposition to plans by American investors and Sir Richard Branson's Virgin Group to launch Virgin America, a domestic carrier. Yesterday's move may help to calm fears that the proposed US-EU 'open skies' deal to liberalise transatlantic air services still favours the former. European airline share prices rose sharply amid market speculation on the effect of an open skies deal, which is expected to be approved tomorrow by EU member states at a meeting of transport ministries.

Finally.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;

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