Archive for the ‘Evan’s News and Quick Takes’ Category

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 — 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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TEMPE — US Airways’ media day program is about to begin, but I wanted to share this non-US related interview by Loren Steffy from the Houston Chronicle:

Larry Kellner served me a cup of coffee with the aplomb of a veteran flight attendant, and then, a few moments later, served up a stunning comment about the airline industry.

“If the government wanted to re-regulate the business, I wouldn’t be opposed to it,” he said.

While he didn’t mean the wholesale regulation of yesteryear, it’s still a surprise coming from the chief executive of Continental Airlines, the nation’s fourth-largest carrier by traffic.

Thirty years ago, airline executives battled fiercely to preserve government control of routes and pricing. Former American Airlines chairman Bob Crandall, then a rising executive, declared profanely that deregulation would ruin the business.

Fast-forward to today, and Kellner, agrees, at least up to a point.

“What we’ve got today doesn’t work,” he said in an exclusive meeting with me and several Chronicle colleagues. “It isn’t creating a stable industry.”

Kellner isn’t calling for a return to the good old days when fares were so high most people took the bus. Airline deregulation has always been about price, and in that sense, it’s been a roaring success.

Where it has failed, though, is on the cost side. Most airlines today have a cost structure that’s changed little since deregulation, which impedes consistent profitability. . . .

Read the whole article. It’s a good reminder that corporations are not inimical to regulation of their industry as long as it protects their profits and limits new entrants (for example, banks have been fighting tooth and nail to keep non-bank companies like Wal-Mart from horning in on their business, lest competition trim margins). The leading opposition to airline deregulation came from established national airlines and labor unions. Deregulation was (and remains) a consumer-friendly reform.

(H/T: ATW Daily News)

UPDATE, later today. Perry Flint of Air Transport World asked US Airways CEO Doug Parker about Kellner’s remarks. Parker said he had not read what Kellner said but that he would “disagree” about the need for reregulation. Indeed, he said, “I would hate to see us start moving back in the other direction at this point. . . . We’re still in the process of getting ourselves through a very lengthy deregulation process.” As part of this, he wants to ditch airport perimeter rules at DCA and LGA and reduce “barriers to investment.”

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Evan on the road

I’m writing from Tempe, Arizona, where I’ll be attending US Airways’ media day tomorrow. I’m looking forward to meeting and interviewing US Airways officials, as well as meeting with the other aviation reporters and bloggers gathered here. Watch this space for posts tomorrow from US Airways’ HQ.

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Matt Phillips at the Middle Seat Terminal points to a recent GAO study of the FAA Airport and Airway Trust Fund, which pays for aviation infrastructure services like air traffic control. The balance of the trust fund, which is funded by a combination of ticket taxes and fuel taxes, has been declining. Part of the problem? Ticket prices do not necessarily correspond to the number of planes using air traffic control services. As I wrote last fall, “[The Air Traffic Organization] is funded by taxes on jet fuel and airline tickets. Thus, revenue might fall if airlines introduce jets that are more fuel efficient. Aviation is a cyclical industry, so it sells fewer tickets during slowdowns, cutting ticket tax revenue. Moreover, ATO’s revenue has nothing to do with actual use of the air traffic system.”

Good news, then, that President Obama’s budget proposal indicates that his Department of Transportation is thinking outside the box on this issue.

GAO: As Fares Decline, FAA Trust Fund Projected to Shrink More [Middle Seat Terminal]

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Transportation Secretary Ray LaHood, one of Obama’s token cabinet Republicans, isn’t going to rock the policy boat. According to National Journal, he’ll take his cues from the White House on emissions:

Addressing the role that the department will play as Congress and the administration move forward on climate change legislation this year, LaHood said he would take his cues from Obama and White House energy and climate adviser Carol Browner. “We’re going to be in the room,” LaHood said, adding, “I’m going to take my leads from Carol Browner. I’ll be a good, faithful soldier on this.”

Lisa Caruso also reports that Clinton-era FAA chief Jane Garvey is about to be nominated for deputy secretary of transportation. She also reports that Randy Babbitt, a former Eastern Airlines pilot and Air Line Pilots Association president and current consultant, is the most likely choice for a five-year term as FAA administrator.

What should we expect from Babbitt? Well, he’ll have to thread the needle of being a union guy moved into management. According to a pilot source, Babbitt was very political as head of ALPA from 1991 to 1998. ALPA is in the tricky position of being a union — a solid Democratic bloc — made up more of Republicans than Democrats, especially in the past when the commercial pilot workforce was composed of greater shares of ex-military guys. “Babbitt had the union endorse Bill Clinton, and there were a lot of individual union members who quit the union [over that],” my source said. “Prior to Clinton, the union had never endorsed a political candidate for president.”

Looks like Babbitt is about to reap his political rewards.

LaHood Predicts More High-Speed Rail Funds [National Journal]

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