What Do Airlines Want from Trump (And Can He Deliver)?

Trump meets airline executives (AP photo)

As you've likely heard, the White House called a meeting last week with several airline CEOs to discuss policy initiatives. The meeting was attended by the CEOs of Delta, United, and Southwest, three of the four largest US airlines. Missing was American Airlines CEO Doug Parker who had a scheduling conflict. Also in attendance were the CEOs of Alaska and JetBlue airlines along with the president of Airlines for America, a trade group.

The airlines' requests to Trump were the usual requests for three things: a privatized air traffic control system, a lighter tax burden, and a lighter regulatory burden. It's a fairly unremarkable list with these three being perennials on the airline wish list. The question is what is the President in a position to offer and how likely is Congress to go along with these initiatives. Let's take a look at each one.

Air Traffic Control

The airlines have been after this policy initiative for quite some time. In their view, red tape and bureaucracy significantly slow the deployment of new technologies which would serve to raise the efficiency of the national airspace system (NAS). New technologies promised by programs such as NextGen have suffered cost overruns and deployment delays resulting in extra costs for airlines.

Airlines complain that they have purchased and deployed the technology needed for the upgrades to the NAS but foot dragging and cost overruns at the FAA mean the promise of these new technologies remains unfilled. Airlines estimate that inefficiencies, delays, and cancellations cost upwards of $30 billion annually.

As a user, I can vouch for this view. The airplanes that I fly have been equipped with Required Navigational Performance (RNP) approach capabilities for perhaps five years and yet RNP approaches, which promise more efficient airspace use are almost nonexistent. And for those airports which do have a RNP approaches installed, controllers are extremely reluctant to assign them, usually giving such clearances late at night or only assigning the final approach segment which confers no advantage over traditional approaches.

The same is true for a technology known as CPDLC, which is a data link directly to controllers. We use this equipment only for obtaining our preflight clearance, not for inflight use as designed. So the critique that the FAA is not holding up its side of the modernization bargain is indeed accurate.

Trump expressed sympathy with the CEOs about the snail's pace of modernization but the important question is whether Congress can deliver as air traffic control privatization can only be accomplished through legislation. Bud Shuster, the current chair of the House Transportation and Infrastructure Committee is on board, stating in a recent opinion piece that the Aviation Innovation Reform and Reauthorization Act will be used as a vehicle for change.

The Senate, which passed an 18 month FAA funding reauthorization last April, is less enthusiastic about reform efforts. What remains to be seen now is whether the Senate will act on reform knowing that any bill which includes reform is likely to be signed by the President.

Taxes

Airlines have long complained and with some justification, that they are overtaxed. Airlines have become something of a cash cow for the federal government with the federal tax rate on airlines being higher than that of so-called sin taxes on tobacco and alcohol. Sin taxes, of course, are designed to reduce the demand for those products.

Industry trade group Airlines for America states that the total tax burden on airlines has increased over 400% in the last two decades from $3.7 billion in 1990 to over $16 billion in 2016. Some of these taxes were imposed in the wake of 9/11 to pay for the increased security costs of operating the TSA.

Here again, the President has limited ability to unilaterally provide relief as most of the taxes on airlines are determined by Congress. One possible policy prescription might be to raise the passenger facility charge which pays for individual airport improvements, while concurrently reducing broad based airline taxes such as the passenger ticket tax and the segment tax. The latter taxes go to fund the Airport and Airway trust fund which airlines complain is fully funded and yet not used by Congress to pay for airport improvements.

Regulation

Airlines complain that while the industry was officially deregulated decades ago, they are still highly regulated by unnecessary rules which negatively impact the ability of airlines to profitably grow and create jobs. The President does have some latitude in this realm to determine the pace and style of enforcement of regulation and did promise the airline chiefs that he was sympathetic to their cause and would work to provide regulatory relief.

Other issues which are on the minds of airline leadership but were not addressed in the meeting include the recently approved permission given to Norwegian Airlines to operate flights by their subsidiary known as NAI to the US from Europe. Industry and labor leaders have criticized the Obama administration for giving their approval to what they believe is an unfair application of the Open Skies Agreement. Their complaint stems from NAI's incorporation in Ireland which is they believe will be used to circumvent Norwegian labor laws.

In a recent White House briefing, however, Press Secretary Sean Spicer mentioned that foreign airlines like Norwegian will be providing US jobs by basing ground and flight crews in the US as well as through their purchase of Boeing aircraft. Thus, it seems unlikely at this point that Trump will reverse the Obama administration's approval of NAI's application to serve the US.

Also not discussed in the meeting was the complaint by some US airlines about the so-called Mid East Three (ME3) airlines and their alleged abuse of the Open Skies Agreement. The complaint against the ME3 concerns the alleged subsidies that these airlines receive from their respective governments which give the ME3 an unfair competitive advantage.

In Conclusion

While President Trump was sympathetic to the complaints brought to him by the airline chiefs, his range of options is limited without the help of legislation from Congress. ATC privatization is a highly polarizing topic and may be difficult to achieve without at least a few Democratic senators joining the effort which seems unlikely. Tax and regulatory reform may have better chances for passage with a sympathetic administration leading the charge.

Is It Time for Air Traffic Control to be Finally Fixed?

Air Traffic Control to be fixed? Fixed how, you might ask. The answer is to be separated from the FAA. Notice that I did not use the word "privatize" in the title. There's a reason for that. For one, the word privatize has become a pejorative and hackles immediately go up whenever the word is used in relation to a government entity. Secondly, the word doesn't accurately describe the changes that should be implemented to make our Air Traffic Control (ATC) system more efficient, less costly, and yes, safer.

The idea of separating the FAA's air traffic control system into a separate entity comes up every few years and seems to get batted about by the usual suspects making the usual arguments and then put away until the next putative reformer brings the subject up again. That may indeed be the case with our new administration and Congress, but somehow I feel that this time may be different.

And make no mistake, there are some very entrenched interests who like things just the way they are. Much of this sentiment is simply fear that when a large change is made, certain constituencies will lose out at the expense of others. These are valid concerns and should be addressed to allay fears and reassure all parties that the result will be beneficial, or at least neutral in cost to all players. But so far, 87 countries worldwide have already separated their air traffic control services from government to include Canada, New Zealand and Australia, none of them particularly bastions of unfettered capitalism. It's time we did as well.

The Advantages

There is no natural order in the universe that states US Air Traffic Control services must be organized under the FAA. The idea that ATC services are too safety sensitive to not be under direct government control falls flat. After all, the airplanes which are themselves being controlled are built, flown, and maintained largely by private individuals or privately owned corporations.

We allow private corporations to build and operate nuclear power stations, railroads, harbors, power grids, and now even space programs. All these operations are still closely regulated by their respective government regulatory agencies as would any separate ATC entity, but many organizational and financial advantages would accrue to a private or government owned ATC corporation.

Placing ATC operations into a corporation separate from a federal agency will allow for a much needed agility in the modernization of our air traffic infrastructure. The FAA has been trying for decades to modernize its ATC services and has succeeded only in spending billions of taxpayer dollars with little to show. Programs with names like the Advanced Automation System and NextGen instituted by laws such as AIR-21 and Vision 100 have proven efficient only in their ability to squander oceans of money.

Having ATC services in a separate organization funded by user fees would allow more predictability in budgeting rather than having managers expending resources on political concerns such as sequestration and appropriations. Separating an operational organization from a regulatory agency is also a better management model which helps prevent regulatory capture by operational concerns. Having access to private capital markets would assist in the finance of long term infrastructure as opposed to the current method of political salesmanship.

The Roadblocks

In virtually every attempt at modernization, political considerations inevitably make any progress difficult or impossible to achieve. Questions about who would end up funding the new ATC organization have made each of the players skeptical of a major overhaul. Each of the major users of our ATC system want to make sure that they don't pay more under any reorganization. And considering that each group feels that other groups aren't paying their fair share, reform has been difficult.

The FAA is funded mainly through excise taxes on things like passenger tickets and fuel and not through usage fees. The airlines, which purchase the lion's share of fuel and carry the most passengers therefore paying the most excise tax, feel that general aviation (GA) and business aviation users consume more ATC services than they pay for. They would like to see the funding mechanism converted into a user fee structure. GA users, who are more numerous and generally well heeled and politically active, resist these efforts through the activities of groups like the Airplane Owners and Pilot's Association (AOPA). Business aviation users fall somewhere in the middle of these two groups but are generally opposed to ATC separation from the FAA for fear that the airlines would dominate such an organization.

Labor Concerns

Any new ATC entity will have to address the concerns of all these groups but must also deal with the concerns of controllers themselves who will feel threatened by any move away from the government umbrella of federal wage rules and federal pensions. Their concerns are valid in that any new ATC entity would certainly employ efficiencies and invest in automation systems which could eventually reduce the numbers of controllers needed to operate the system. 

Controllers' unions must be reassured that their members will not suffer financial penalties in the short term. They must also realize, however, that like pilots, their jobs are ripe for the application of automation and that controller ranks will be reduced over time regardless of who is writing their paychecks. Other operational efficiencies can only help their cause by reducing overall costs.

In Conclusion

An ATC system which is separate from a stodgy and politically reactive agency such as the FAA will have a more stable and reliable source of funding allowing capital improvements to be made without the usual red tape. Badly needed modernization will result in a safer national airspace system due to the deployment of the latest technologies available in the most expeditious manner possible.

A separate agency free of political interference will also be more amenable to fostering a customer centric culture which can then concentrate on a primary goal of service and avoids conflicts of interest with the FAA's primary regulatory functions. Lastly, representation of all major users and labor in the governance of a new and separate ATC organization would ensure that all interested parties have a seat at the table while avoiding the political paralysis of the current system.

How to Survive Your Airline Flight: The Captain's Guide to Staying Sane

Glamour defined

Many decades ago, travel by air was considered amazing. And glamorous. Fast forward into the eleventh decade of passenger air travel and it is still amazing, but not quite so glamorous. That is unless you are riding first class on an Emirates A380 from Dubai to London. And if you can afford the price of the first class suite on that airplane, you aren't wasting your time reading airline blogs on the Internet. You have more important things to do such as restructuring a corporation or perhaps closing an important arms deal.

For the rest of us, though, air travel has become annoying, mundane, irksome, and maddening. I know this because it's my livelihood. But not only do I get to look back on the wretched refuse as that wonderful bulletproof carbon-kevlar cockpit door swings closed with a heartwarming thump, but as a commuter, I have the dubious honor of sampling the product myself at least several times weekly. And trust me, dear reader, when I say to you that I look forward with relish to the day that I will never again have to set foot as a passenger on a commercial airliner.

I exaggerate, but only slightly, for I believe that the average airline passenger will agree that the modern airline experience is something to be simply gotten through, as opposed to enjoyed as it was in times not too distantly removed. Luckily, though, there are things that airline victims er, customers can do to make their flight at least tolerable, if not actually enjoyable. The Captain is on the case and herewith presents his indispensible guide on how to survive your airline flight!

Before You Go, Choose Wisely

You've done your best to avoid going at all, but your boss wants you at that conference in Atlanta, or your spouse's sister is getting married and there's no face-saving way to decline the wedding invitation. So you're going. Next, you'll have to book your flight. This will be an exercise in contrast. You must contrast the amount of pain you're willing to inflict upon your wallet versus the pain that you're willing to inflict upon your soul by going cheap. 

If you've got the scratch to go first or business class, then we're probably done here. All the major US airlines are roughly equivalent in their first class service, and you'll have a nice wide leather seat away from the hoi polloi. Remember, though, it's bad form to show up to the meeting or rehearsal dinner drunk from airplane wine no matter how much it might be needed. Good luck.

If first class is too dear, your next best choice in class of service is a product called "Economy Plus" as United calls it. American calls their product "Premium Economy", and Delta's is Delta Comfort+. This class is pretty much what just plain old "economy" used to be called before the seat pitches were jammed together to force a few more sardines into the can. You'll get an economy seat, but the seat pitch will be suitable for a normal human being for which of course you'll pay extra for the privilege of being able to feel your toes after landing.

Your next cheaper option will be plain 'ol economy and at this point you may want to consider letting price guide your decision with a few caveats. Make sure to check the airlines' baggage policy to avoid unpleasant surprise charges on your arrival at the airport. Most airlines have "unbundled" their services and will stick you with bag charges if you're not careful. They've done this to avoid paying excise taxes on this new "service" as those taxes are only levied on the ticket price itself. Smart for them, expensive for you. The Captain's advice: choose carefully how you like your pain, financial or in dignity.

How Basic Can You Get?

There is still yet another class of service that has started to appear at the top of your Expedia listing known as Basic Economy, better described as "steerage" class. This will be a rock bottom fare for a rock bottom experience. You'll board last, won't get to have any choice in seat assignment, and even a bag in the overhead bin will cost extra. This service was introduced to counter the competitive threat from the new ultra low cost carriers (ULCCs) such as Spirit, Frontier and Allegiant.

How basic are they? Well, no one who has flown on Spirit has ever been known to book a second flight as the service is so abysmal. Their low fares, however, ensure that the airline will remain full until such time that all Americans have flown on them once, at which time they'll declare bankruptcy, rename themselves, repaint the airplanes, and start again. The Captain's advice: just don't.

Does the Type of Airplane Matter?

Is the Pope Catholic? Yes, actually, quite a bit. This may not be well known, but as far as narrowbody aircraft go, the fuselage of the Airbus family of jets (319, 320, 321) is seven inches wider than the Boeing family (737s, 757). This may be because the 737 was based upon the 1950s era designed 707. Crushed velour warm up suits and big gulps hadn't been invented yet back then and the population was somewhat less rotund than that of today. In any case, you'll have a bit more breathing room in the back of an Airbus than a Boeing narrowbody aircraft.

If you happen to find yourself on a commuter aircraft, please accept our condolences, though the situation is improving. The first generation of commuter jets with their toy seating and miniscule overhead bins will require serious contortions from anyone even slightly above average size and weight. A new generation of aircraft from both Embraer and Bombardier known respectively as the "E" and "C" class aircraft promise much more reasonably sized accommodations due to larger fuselage size. 

There are dozens of seat configurations on dozens of different airplanes and it is never a bad idea to consult a travel website to find out the unique bulkhead or emergency exit seats which might offer more room. This can vary across airline, model, and even sub-model of aircraft (-300 vs -700). The Captain's advice: know your airplane and caveat emptor.

The Gear You'll Need

What you bring along to entertain yourself in flight is largely up to you though I do recommend some essential pieces of gear which should always accompany you on any flight. My first "do not leave home without it" piece is a good over-the-ear set of noise cancelling headphones. Why? Because toddlers and infants. And chatty neighbors.

You may consider yourself lucky, but eventually your luck will run out and a screaming infant will be well within earshot. Look, I love babies as much as anyone, but I raised my four and got that box checked. And it never helps to throw shade at a harried mom dealing with a squawling child (especially if you're married to her). The pressure changes in an airplane can make babies' ears hurt. But what you can do is to remove yourself from the situation in an auditory fashion by slipping your headset on and cranking up the Rush. Don't worry, the baby will be just fine, and so will you.

My second recommendation is a generous supply of alcohol wipes. The ones individually wrapped seem to stay moist the longest. Why? Because an airplane is a flying Petri dish. Every solid surface on an aircraft is touched by hundreds of people on a daily basis. And they all have colds and just sneezed into their hands before using the tray in front of you. And it's gross but trays occasionally get used as changing tables. Not gonna lie. The Captain's advice: wipe everything, trust nothing.

 

Game Day

So you've bought your ticket, checked in online the night before, and are approaching security. Should you find yourself in an airport with the choice of several security checkpoints which serve the same secure area, my advice is to locate the one closest to the Southwest gates...and then go to the other one. It is guaranteed to be less crowded. This goes even if you happen to be flying Southwest. They are a volume producer and you'll get through more quickly.

Let's assume that you've survived the tender mercies of the friendly yet efficient TSA agents and are now looking for your gate. A fun thing to do here is to stand with your back to the airport monitors and then flag down someone in uniform. Show them your document and ask them which gate to go to. Always a barrel of laughs.

A word of caution is advised when looking for something to eat in the airport. An old adage stated that the best eateries along the highway were the ones which had a lot of trucks in the parking lot, the idea being that the pros knew the good places to eat. The same is not necessarily true in an airport. The place with most of the crew members standing in line most likely has the largest employee discount, which, of course, you won't get. It might also be good, but there's no guarantee. The Captain's advice: bring a sandwich.

The Boarding Process

The late comedian George Carlin once based an entire sketch on the silliness of gate boarding announcements, especially asking why it is announced as a "process". Why doesn't the gate agent simply announce we will now begin "boarding" versus "the boarding process"? I've been doing this for 26 years now and I haven't got a clue. Just one of those things. The agents themselves probably don't know either.

Now if you have an assigned seat, you simply wait your turn and you get in line. If, however, you are flying on one of the several airlines without assigned seating, there is a very definite strategy you should follow. It is very helpful for you to have done your homework and checked in online as early as possible to get the best pole position. It also helps to know how many seats are on the airplane you are boarding.

Knowing some human behaviour traits helps as well. Most everyone wants to avoid the dreaded center seat, but they also value being near the front which allows an earlier escape after landing. If you're lucky enough to be in first boarding group, then bully for you! But if you're in the second, or even third group, there's hope.

Window and Aisle: Front to Back, Center: Back to Front

As the plane fills up, the window and aisle seats will fill from front to back, and people will continue to move aft looking for one of those window or aisle seats. Eventually they will run out and there will be a "bounce back" as passengers now resigned to a center seat move back forward. In the meantime, you have an opportunity to grab a center seat in the first few rows that everyone has passed up.

Yes, you have to suck up a center seat, but the advantages are that you are near the front, and you get to pick some relatively skinny and/or cute people to cozy next to. This technique is also useful to avoid toddlers. The Captain's advice: NEVER choose a seat in front of a row with toddlers. They will kick your seat. You've been warned.

What to Order

You've successfully gotten airborne and are watching a movie on your device when James or Suzy comes by to ask for your order. Unless you're completely parched, or the flight is longer than an hour, my advice is to pass. Remember that to many flight attendants, sick days are never to be used when they are actually sick. Those are to be saved for special occasions such as Bonnaroo or the playoffs. In other words, be wary of the people handling your food and drink. Perhaps I'm just a germophobe, but I've flown with some pretty sick flight attendants who just soldier on.

Well, dear reader, I've hopefully given you some useful information to make your next flight more enjoyable, or at least less painful. Remember that, as Louis CK put it in a comedy piece, you are partaking in the miracle of human flight sitting in a chair in the sky. Just who knew that experiencing a miracle could send otherwise normal people into a spittle flecked rage?

Oh, and always wear shoes to the lav. My wife once saw Cate Blanchett go into the bathroom on a 777 in bare feet. Ewww.