U.S. Airlines, Airports See Silver Linings in White House Meeting

 - February 10, 2017, 12:23 AM

Updated on February 10.

Airlines and airports are not perfectly aligned on major issues that confront the U.S. aviation industry, but representatives of both segments found reason to be encouraged after a February 9 meeting with President Donald Trump. Less comforted in the meeting’s aftermath was the Federal Aviation Administration—the agency responsible for a system that Trump described in public remarks as ill-equipped and badly managed.

Among those attending the breakfast meeting and listening session at the White House were the CEOs of Airlines for America (A4A)-member carriers Alaska Air Group, Atlas Air, FedEx, JetBlue, Southwest, United and UPS, plus non-member Delta Air Lines. Attending under the umbrella of Airports Council International-North America (ACI-NA) were top executives of the Buffalo Niagara and Tampa international airports, the Chicago Department of Aviation, Los Angeles World Airports, the Port Authority of New York and New Jersey, the Metropolitan Washington Airports Authority and the Metropolitan Nashville Airport Authority.

Jared Kushner, Trump’s son-in-law and a White House senior advisor, and Gary Cohn, formerly the president of Goldman Sachs and now director of the National Economic Council, participated in the meeting.

According to a media pool report from the start of the meeting: “POTUS (the President of the United States) congratulated airlines at succeeding ‘despite the bad equipment that the airport gives you, in many cases. I have a pilot who’s a real expert,’ POTUS said, noting that his pilot has said airlines are often provided with ‘the wrong stuff…And we have an obsolete plane system, we have obsolete airports.’”

Without naming it, the president criticized the FAA’s multifaceted NextGen effort to modernize the ATC system, which was founded in legislation passed in 2003, and asserted that a pilot should run the agency. FAA Administrator Michael Huerta, a non-pilot with an extensive transportation industry resume, came to the FAA in June 2010 as deputy administrator. President Obama promoted him to administrator after Randy Babbitt, a former airline pilot and labor leader, resigned from the position over a drunken driving charge that a judge later dismissed. The Senate confirmed Huerta for a five-year term as administrator in January 2013.

At the White House meeting, “Southwest spoke first and said the top priority for helping airlines would be to ‘modernize the air traffic control system,’ noting that money spent on the system has not helped improve it in the past,” the pool report stated. “‘I hear we're spending billions and billions of dollars; it’s a system that’s totally out of whack," POTUS said of the air traffic control system. POTUS inquired as to why airline corporations had allowed the government to invest in a faulty system. Southwest informed POTUS that the airlines are not ‘in control’ of those decisions.”

Trump observed “that the system could potentially work better if FAA was run by a pilot because it is not currently, as a meeting attendee confirmed for him.”

[The White House later released a fuller transcript of the discussions. According to that transcript, at one point, Trump elaborated on the input on the subject he has been getting from "my pilot," without specifying whether he was referring to the captain of the Trump Organization's Boeing 757 or one of the U.S. Air Force pilots who now flies the president on Air Force One, a Boeing 747. "And I can tell you that a lot of the new equipment that already is obsolete the day they order it [sic.]...and that's according to people that know, including my pilot," Trump stated. "I have a pilot who's a real expert, and he said, sir, the equipment they're putting on is just the wrong stuff. And we'll talk about that. Because if we are going to modernize our systems, we should be using the right equipment....Probably the wrong equipment costs more money. You can probably buy the right equipment for less money. So we want to talk about that. Because my pilot, he's a smart guy, and knows what's going on. He said the government is using the wrong equipment and instituting a massive, multibillion-dollar project, but they're using the wrong type of equipment."]

White House press secretary Sean Spicer summarized the meeting at an afternoon briefing on February 9. “The president thanked the attendees for the 10 million jobs and $1 trillion in annual economic income activity they contributed to our economy and praised them for moving approximately two million passengers per day in spite of the outdated infrastructure and equipment that they have in terms air traffic control and other infrastructure measures,” he said in prepared remarks.

“The leaders commented that they have never been given the opportunity to work truly alongside the president in such an open and constructive way, and they were unanimous in asking for the president to offer relief from the duplicative and burdensome regulations that are stifling job creation, which he assured them he’d do,” Spicer added. Further, Trump “pledged to work closely with the airline industry to modernize the technology system to keep our nation’s airports running and to expedite the approval process for future airline infrastructure projects.”

In a statement attributed to its president and CEO Nicholas Calio, A4A said it was “grateful to President Trump for hosting this meeting” and “encouraged by his in-depth understanding of our industry and the need to reform our air traffic control system.” The airline group endorses a proposal made by House Transportation Committee Chairman Bill Shuster (R-Pa.) to create a not-for-profit corporation separate of the FAA to manage the nation’s ATC system. As proposed a year ago, an 11-member board consisting of representatives from the airlines, general aviation and unions representing pilots and controllers would manage the corporation.

Airports have reservations about so-called ATC reform. “We shared our concerns with the President about potential reforms to air traffic control management,” ACI-NA said. “If the benefits are to be realized, investment is required in all phases of flight, including airport runways and taxiways, ground-based equipment, satellite data systems, cockpits and control towers. The governance structure must include all stakeholders if it is to be successful.”

But the airport group was encouraged by what Trump had to say about infrastructure spending. Airports say they have more than $100 billion in infrastructure needs over the next five years. They contend that they can help finance improvements if a federal cap on the local passenger tax they collect, known as the Passenger Facility Charge, is raised—something A4A opposes.

“During the meeting, the President stated four times that America must modernize and rebuild our airports,” said ACI-NA president and CEO Kevin Burke. “We can quickly fund and undertake these much needed infrastructure projects with no federal budget impact by giving airports more control of local investment decisions. We estimate that 2.1 million jobs could be created while enhancing the passenger experience simply by removing federal limits on the local user fee known as the Passenger Facility Charge.”

Without reference to the White House meeting or Trump’s reported remarks, the FAA issued a subdued statement, explaining that it has spent $7.5 billion on NextGen over the past seven years, using funds that Congress appropriated for the effort. The investment has produced $2.7 billion in savings for airlines and passengers to date, and is expected to yield $160 billion in benefits through 2030, the agency contends.

“NextGen is one of the most ambitious infrastructure and modernization projects in U.S. history. Its successful, ongoing rollout is the result of rigorous acquisition, program and portfolio management, and stakeholder engagement with the airline industry and other members of the aviation community,” the agency stated. “The FAA invited airline stakeholders to help develop the blueprint for NextGen and they continue to have a seat at the table in setting NextGen priorities and investments through the NextGen Advisory Committee.”