US Airways CEO: NextGen benefits don't justify equipage investment

By Perry Flint | April 30, 2010

US Airways Chairman and CEO Doug Parker expressed strong reluctance to invest in cockpit technology that is seen as being vital to achieving the goals of FAA's NextGen air traffic management system, stating that the cost/benefit case has not been made.

Speaking at the carrier's media day in Phoenix Wednesday, Parker said, "There is not a capacity issue in the United States right now as it relates to air traffic control, so putting in place NextGen ATC, while it makes all the sense in the world, isn't going to save the airlines dramatic amounts. . .So our position is so long as we have to pay for [flight deck equipment], we prefer not to have it." US Airways estimated its investment would total $950 million.

Parker and Senior VP-Government Affairs C.A. Howlett also questioned the premise that future traffic growth will create a critical capacity shortfall necessitating NextGen. Howlett challenged what he called overly optimistic forecasts "that [traffic] growth is going to be in the 3%-4%-5% range [per annum]. . .Even some of the FAA numbers about future growth we think are quite rich. It's a mature industry domestically. The stimulation that occurs has largely been met. I would say that if we are looking at 1%-2% [annual domestic] growth over the next decade that would be good."

Discuss this news 13

02 May00:03

Just another example of US

By Anonymous

Just another example of US Airways unwillingness to invest in its fleet. They ripped out the power outlets (Airbuses) music and video systems (everything else except overseas flights) on longer haul planes. No more closets to hand up coats or hold unusual shaped items like wedding gowns. Seats jammed together about as close as possible and then charge for some of them as "choice" seats. This is an airline in freefall in terms of its customer service, cleanliness of planes, and treatment of its frequent flyers.

02 May08:39

I agree with Doug Parker.

By Anonymous

I agree with Doug Parker. There simply is no need for this expensive equipt. Travel will not grow at the rate increase that everyone believes will happen. Traffic will remain stagnent for several years to come. The experts that said we would have an aircraft mechanics shortage 30 years ago - which still has not occurred , must be the same experts singing this song about how bad we need this new tech.in the cockpits. David La Palombara

02 May14:34

This is what you get when you

By Anonymous

This is what you get when you have the highest paid CEO in the Airline Industry. They don't have time to run the Airline. Just time to invest there money.

02 May14:45

Perry flint once said: "You

By Anonymous

Perry flint once said: "You don't make money running an airline, you make money selling things to airlines." Very wise observation. The airlines run the show and anybody else make money but the airlines. Anything sold to airlines is overpriced and overtaxed. Airlines are exposed to all kinds of abuse. Can you imagine one day without air transpostation in the world. Next gen should be sponsored by the governments, banks and oil companies. They are the ones that make money on this business.

04 May11:30

Yeah, he must be right. Air

By Anonymous

Yeah, he must be right. Air traffic isn't already congested or anything. Things have been quick and efficient. Modernization of equipment that's decades old? Nah.

04 May14:16

I agree with the comment by

By Anonymous

I agree with the comment by "Anonymous" above.

04 May14:26

What's funny is that you now

By John J. Tormey III, Esq.

What's funny is that you now have anonymous posters agreeing with other anonymous posters above. Guess the airlines and FAA have nothing better to do but continue to enlist their lowest-level employees to hit the blogs and tout college drop-out Randy Babbitt's failed DeathGen system. We all know DeathGen is a failure. We all know FAA is a failure. We all know Babbitt is a failure. Now let's get these clowns Babbitt and Krakowski ejected from the FAAiled federal "agency" pretending to regulate aviation, and replace them with responsible uncorrupted officials who do something other than merely pad the pockets of their aeromercantile paymasters like Babbitt and Krakowski seek to do.

John J. Tormey III, Esq.
Quiet Rockland
www.RandyBabbitt.com

04 May18:37

No, Tormey, what's funny is

By Anonymous

No, Tormey, what's funny is that an entertainment lawyer would be surprised that the FAA didn't take him seriously.

05 May21:55

Point of information in

By US CSR

Point of information in regards to the comment stating Doug Parker is the highest paid airline CEO. In US Airways proxy statement, Doug Parker informed the company that he is, in fact, the lowest paid CEO of the network carriers. He had a salary of $500,000 per annum and three at-risk bonuses.

In regards to the technology, with the 2008 fuel crisis, and the 2009 recession with its drop in travel demand, it has not been easy for airlines to make money. Even with a-la-carte fees, it does not generate enough revenue for airlines to be profitable. There is not enough market share for airline's to raise fares for where they need to be. With that in mind, it's hard to say airlines are greedy when they don't break even. On that note, why pay millions for technology they don't need?

06 May13:54

In regards to Doug Parker's

By Anonymous

In regards to Doug Parker's pay, yes his salary is reasonable, but I bet he is unwilling to disclose the rest of his benefits. I hear his total compensation is by far the largest in the industry, and he plays his employees the lowest out of the industry.

It seems many of his management decisions are based on short term profits not the long term health of the airline (for example closing crew bases and maintenance facilities and this one (avionics)).

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