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Archive for March, 2009

Here’s the White House press release announcing the nomination of Randy Babbitt as the next administrator of the FAA.

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Back from Arizona

I’m back in Washington after a good couple of days in Phoenix. Thanks to US Airways for hosting this media event — and especially for inviting bloggers and other social media folks and recognizing the increasingly important role we play in the media universe. The US Airways corporate communications office put on a great program.

It was also a pleasure to meet and see folks from the aviation media community — Richard Velotta from the Las Vegas Sun, Victoria Day from ATA, Lori Ranson from Flight, Bill Swelbar of the Swelblog, Holly Hegeman of Plane Business, and Joshua Freed of AP.

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I couldn’t resist sharing this gem of a video from The Onion:

Prague’s Franz Kafka International Named World’s Most Alienating Airport

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TEMPE — On most policy issues at the national level, airlines work through their trade association, ATA. Yesterday, I asked C. A. Howlett, US Airways senior VP for public affairs, about what issues he works on that the ATA does not get very involved in. “The biggest issue that is US Airways-specific is the Reagan National Airport perimeter rule.” National is one of US Airways’ key focus cities. He said that although the airline favors reducing barriers wherever they exist, “a more practical political solution is to create more exemptions to beyond-perimeter flying.” This would add to the twenty-four (in practice, twelve round-trip) exemptions, which include US Airways’ routes to Phoenix (one of which I am about to take back to Washington).

The key, Howlett said, is to make these changes in the pending FAA reauthorization bill, because the perimeter at National is congressionally mandated. US Airways is also interested in increasing beyond-perimeter exemptions at LaGuardia Airport, where it has a focus city operation. At LaGuardia, however, the perimeter is a locally adopted rule which does not require federal action.

One of the obstacles to perimeter exemptions is the objections of communities within the perimeter that fear losing service to big West Coast markets.  “Our approach would protect small and medium markets within the perimeter,” Howlett said. “We would say that an airline could use up to some percentage of its existing slots to fly beyond the perimeter, provided that those flights were taken from large or medium hubs. . . . What we’re doing is trying to protect the city that has maybe two flights to DCA. . . . We’re building in protections so that communities don’t lose service.” Howlett offered the example of, say, Delta taking one flight out of the Atlanta market, which would not make much of a difference, to add a flight to Salt Lake City. Besides, he said, there is just not that much demand for nonstop travel from National to the West Coast. A few more exemptions should meet that demand. (more…)

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TEMPE — Echoing Doug Parker’s plea for the government to “do no harm” to the airline industry, C. A. Howlett, US Airways’ top government affairs officer, outlined the challenges the industry — and US Airways in particular — face in the policy environment. His primary focus was the pending FAA reauthorization bill. Put off since 2007, the bill has been passed by the House but no action has been taken in the Senate. “We will maybe get this in calendar year 2009 but no one is betting anything heavy on that particular forecast,” he quipped.

Howlett is in no rush to get the House bill passed, because it has several provisions that give US Airways and other airlines pause. The bill increases the Passenger Facility Charge (PFC) from $4.50 to $7.00. PFCs are used to fund airport improvements but are levied by airlines when passengers buy tickets. This, Howlett said, would add $2 billion to the airline industry’s costs. “Airports have the ability to raise revenues by raising our landing fees and charges,” he added. “Not all airports are the same. . . . [Raising landing fees is]a better way to finance projects.” Besides, he said, airports got $1.1 billion in the stimulus bill, plus $1 billion for security improvements.

Also of concern in the House’s FAA bill are labor issues regarding collective bargaining procedures, the passenger’s bill of rights provisions, and limitations on foreign repair stations. Howlett said that there is a provision inserted at the behest of the firefighters’ union that would cost US Airways alone $15 million per year at their hubs. (more…)

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TEMPE — US Airways chairman and CEO Doug Parker opened the airline’s annual media day with remarks on the state of the airline industry, pointing out financial, political, and labor-related challenges in the year ahead and calling on airline managers to change the way they think about industry competition.

Parker has long been an apostle of consolidation in the industry, leading America West to take over US Airways in 2005 and attempting to take over Delta in 2006-07. He pointed out today that no single airline has more than a 25 percent share of the U.S. airline market. “In a network business, that’s a lot of fragmentation. It’s a fragmentation that makes it hard to produce returns for shareholders,” he continued. “More [integration] will produce even more value.” He said that US’s hostile takeover of Delta attempt spurred the Delta-Northwest merger, and he added that whether US Airways is in mergers or not,  the airline will benefit: “Where the real value occurs is the reduction of fragmentation.”

As for government affairs, Parker said that “this is a business that is overtaxed, that is in many ways overregulated.” In what I interpreted as a veiled reference to House transportation chairman Jim Oberstar (D-Minn.), who has declared war on airline consolidation and networking, he said: “We have many in congress who view aviation as a public good.” Airlines have to focus on little issues like service to individual congressional districts. Congress, he said, wants to harness the industry to serve its own interests. [Not unlike most other industries, these days –ed.]  The regulatory picture looks bleak, he said. “This one is probably not going to get better. . . . The best we can do on this one is hold the line. . . . Our message through 2009 is ‘do no harm.’ Let us compete, leave us alone.” (more…)

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TEMPE — Just heard from one of the other bloggers here that former Air Line Pilots Association head Randy Babbitt has been picked to lead the Federal Aviation Administration. Here’s the news as reported in the Wall Street Journal.

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