Political lobbying, connections may help airlines profits take off

While lobbying efforts may pay dividends for the entire industry, political connections can often lead to competitive advantages for individual companies. UNIVERSITY PARK, Pa. Government lobbying and political connections may add lift to the air transportation industry's profitability, but they could also cause a crash in talented transportation administrators, according to a Penn State Harrisburg researcher. In a study of 46 companies in the airline transportation industry over the past 15 years, Richard S. Brown , assistant professor of management , found after controlling for other factors, that political lobbying was related to a company's profitability. "As a society, I think we assume this is how the world works," said Brown. "Corporations use their lobbying efforts to gain political favor and those political favors at some point flow to a benefit, and, in this case, I look at that benefit as profitability." According to Brown, in one model, when a company increases its lobbying efforts by 1 percent, the company's profits - earnings before interest and taxes - increase by about $195,000. Companies use political lobbying in several ways, he added.