Donald Trump, Meeting With Airline CEOs, Targets Air-Traffic Control System
February 09 2017 - 12:03PM
Dow Jones News
By Carol E. Lee and Susan Carey
WASHINGTON -- President Donald Trump, meeting with airline
executives at the White House Thursday morning, suggested adopting
changes to the government's air-traffic control system and placing
a pilot at the head of the Federal Aviation Administration.
Mr. Trump also promised the executives he would reduce
government regulations, lower taxes on American businesses and fund
infrastructure upgrades, all of which he said would help their
companies hire more workers.
His agenda received a warm reception from those who attended the
meeting, which included chief executives from United Continental
Holdings Inc., Delta Air Lines Inc., Southwest Airlines Co., Alaska
Air Group Inc., three cargo carriers and heads of airports in Los
Angeles and Atlanta.
Mr. Trump said the air-traffic control system is "totally out of
whack" and said his polices would soon start helping companies such
as airlines hire more people, including "rolling back burdensome
regulations" and "lowering the overall tax burden of American
businesses."
"We want the traveling public to have the greatest customer
service and with an absolute minimum of delays," Mr. Trump said.
"And we have an obsolete plane system, we have obsolete
airports."
Southwest CEO Gary Kelly, speaking to CNBC after the meeting,
welcomed the focus on modernizing the air-traffic-control system.
"We believe there is about $25 billion of waste annually with the
system that's currently being used," he said. "That's where I think
you can get the biggest bank for the buck."
Since Mr. Trump's election, airlines and airports have said they
are optimistic about his plans to lower taxes and raise
infrastructure spending. But it isn't yet clear how those policies
would be implemented.
Mr. Trump promised an announcement within the next three weeks
that he promised would be "phenomenal in terms of tax."
Many of the airlines support a plan to remove
air-traffic-control operations from the Federal Aviation
Administration and place them into a not-for-profit corporation.
Some four dozen nations already have taken that step. But an
earlier House Republican effort to win congressional support for
the concept was unsuccessful. A spokeswoman for the FAA had no
immediate comment Thursday.
The president on Thursday asked why the airlines have allowed
the government to invest in a faulty system. Mr. Kelly of Southwest
replied that airlines aren't in control of those decisions. The CEO
also said funds being spent to modernize the air-traffic control
system haven't helped it improve.
Most U.S. carriers believe a corporate air-traffic-control
system separate from the FAA would be more efficient because it
would allow them to raise funding from the financial markets,
rather than relying on congressional appropriations.
The FAA's mandate will expire in September, providing an opening
to discuss such changes. Delta has opposed the plan, saying the
transition would be risky. Some corporate-jet and private pilots
also oppose the concept because they fear it would raise their
costs.
Some of the more contentious issues, such as the
administration's travel ban barring citizens of seven nations from
entering the U.S., didn't come up. While the order has been
temporarily halted and is being reviewed by a federal appeals
court, the Jan. 27 order rocked the industry. Huge demonstrations
took place at many big airports opposing the order. Airlines were
caught unawares and struggled to comply.
Another hot topic that was barely broached was the disagreement
about the growth of Middle Eastern carriers into the U.S. and
whether they are infringing on air treaties. President Trump
alluded to it, however.
"I know you're under pressure from a lot of foreign elements and
foreign carriers," he said. "I've been hearing that a little bit.
At the same time, we want to make life good for them also. They
come with big investments. In many cases investments are made by
their governments, but they are still big investments."
Among the airline executives on the guest list for the meeting:
Ed Bastian, CEO of Delta Air Lines, the No. 2 U.S. carrier by
traffic; Oscar Munoz, CEO of United Continental Holdings, No. 3;
Mr. Kelly of Southwest Airlines; Brad Tilden, chairman and CEO,
Alaska Air Group; Bill Flynn, president and CEO, Atlas Air
Worldwide Holdings, Inc.; Dave Bronczek, president and chief
operating officer, FedEx Corp.; Robin Hayes, president and CEO,
JetBlue Airways Corp.; Myron Gray, president of U.S. operations,
UPS; and Nicholas E. Calio, president and CEO of industry group
A4A.
Doug Parker, CEO of the largest carrier, American Airlines Group
Inc., wasn't able to attend because he was scheduled to host 1,600
employees at an all-day conference, the company said earlier.
--Andy Pasztor contributed to this article.
Write to Carol E. Lee at carol.lee@wsj.com and Susan Carey at
susan.carey@wsj.com
(END) Dow Jones Newswires
February 09, 2017 11:48 ET (16:48 GMT)
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