ATW Editor's Blog

Five priorities for the next US Transportation Secretary

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US President-elect’s nomination of Elaine Chao to be Department of Transportation Secretary seems to have broad support and will likely be an uncontentious nominee with the Senate.

US industry trade organization Airlines for America (A4A) president and CEO Nicholas Calio praised Chao’s nomination and described her as a leader with experience in transportation and labor issues, as well as possessing political skills and “the known ability to manage a large organization.”

Chao previously served as US Labor Secretary throughout the George W. Bush presidency, and earlier as Deputy Secretary of DOT in the George H.W. Bush administration; so she knows government and the managing of large agencies and is highly familiar with the workings and responsibilities of DOT. Her husband is Senate Majority Leader Mitch McConnell, so she also knows the congressional system. In short, she’s a classic Washington Beltway insider.

What I’m hearing is that Chao stands to bring positive traits to the US air transport industry; she is known as a very hard worker who holds everyone to high standards, but is pragmatic. She can hit the road running, understands the issues and is interested in them; is open to different approaches; and realizes there are places in this industry where regulation and oversight is necessary and places where government needs to stay out of the way.

So here’s my list of focus areas where I believe the next DOT Secretary could make a positive mark for American airlines, their passengers and the greater air transport industry.

  1. Most critical and potentially most significant of all, modernize and transform the US air traffic control system. There are successful models out there to provide templates – most notably Nav Canada – but this should be a US system, uniquely designed by and for Americans. Chao probably represents the single biggest opportunity for the US ATC system to finally move out of its analogue, antiquated and inefficient trap and into the 21st century with all the advantages that airlines want, controllers want, and passengers will benefit from. What the US air transport system needs is a separate, not-for-profit ATC system that would boost its capacity and the US economy.
  2. Immediately scrap the ridiculous new “competition rules” that the White House and DOT recently proposed for US airlines and which actually would harm competition and potentially reduce passenger compensation when things go wrong.  These proposals, which range from defining what constitutes a “delayed bag” to broadening requirements to small and regional airlines to file huge amounts of operational data and statistics – at huge cost to them but to no benefit for the passenger – are classic examples of government interference in the operations of businesses who know far better than Washington what their customers want and how best to deliver.
  3. Revisit and throw out most of the “on-time” performance government fines and threats that hang over airlines. For the most part, these have only served to force airlines to pad out their scheduled block times, further adding to the ATC system’s inefficiencies. And those fines do nothing for any of the passengers that were on a severely delayed flight. As JetBlue Airways CEO Robin Hayes said, it’s not a benefit to the passenger to schedule 80 minutes for a flight between New York and Washington DC – it’s a big con.  Let’s put common sense into the system.
  4. Don’t micromanage airlines or tax and fee them to death. US federal fees and taxes can add up to more than 20% of a $300 ticket, with very little of that money working for the passenger or going towards a better US air system. But high taxes on air tickets do have one effect: they dampen demand for air travel, which in turn has a negative effect on GDP, to which airlines are a significant contributor. Of course, regulatory safety oversight is necessary in this industry, but US airlines have a superb safety record and are interested in maintaining nothing less: safety is their number one priority. Where safety is concerned, the new secretary’s focus should be on the US railways and, even closer to home, the Washington Metro.
  5. Make a decision on Norwegian Air International. Ideally, that should be a decision to confirm NAI’s application to begin Ireland-US flights, as is permitted under the US-EU Open Skies agreement and which DOT itself said in April was a compliant application when it gave tentative approval. Whether NAI’s low cost carrier business model can succeed in the transatlantic market is for the airline to prove, but granting a foreign air carrier permit would bring in more choice and competition – an important goal of open skies. But by the time the new secretary takes office, DOT will have sat on this application for close to three years. That is highly reprehensible and potentially harmful to US airlines if the European Commission decides to take similar delaying action in retaliation, as it has indicated is possible.

Karen Walker Karen.walker@penton.com

 

 

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