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December 21, 2014

Posts in "Airports"

December 19, 2014

Most Encouraging News Of 2014, Part Two

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Encouraging news: BNSF’s $6 billion capital investment program (Photo by Justin Sullivan/Getty Images)

Here’s our second selection of views from transportation advocates, analysts, and interest group representatives on the most encouraging or discouraging transportation developments of the past year….


“The Department of Transportation’s decision to move forward with vehicle-to-vehicle communication helps pave the way for the next generation of crash avoidance technology. The ability of vehicles to communicate with other vehicles and with the infrastructure around them is a promising step toward reducing the number of traffic and pedestrian fatalities, while also increasing the efficiency of our transportation system.”

Hilary Cain, director, Technology and Innovation Policy, Government and Industry Affairs, Toyota

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December 17, 2014

For FedEx, Fuel Price Drop Is Not All Good News

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Workers prepare to offload a FedEx plane at Newark, N.J. (Photo by Andrew Burton/Getty Images)

FedEx chief financial officer Alan Graf said Wednesday the company had “a spectacular second quarter” in fiscal year with a 36 percent increase in earnings per share.

But Graf said on a conference call for investors that performance wasn’t largely due to the dramatic drop in oil prices.

The jet fuel price decline provided “only a slight benefit to operating income” due to the way FedEx passes along costs to its customers through its fuel surcharge and the way it buys fuel.

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December 16, 2014

Robust Boeing & Even More Airports For China

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Boeing Chairman and CEO Jim McNerney (Photo: Mandel Ngan/AFP/Getty Images)

In a sign of a robust commercial aviation industry and a confident corporate leadership, Boeing Chairman and CEO Jim McNerney announced Monday that his company was increasing its quarterly dividend by 25 percent to 91 cents per share.

He cited “the solid growth outlook for commercial aviation” as part of the basis for the higher dividend, which the company has increased by 88 percent over the past two years.

Meanwhile, market observers have been puzzling over whether the plunge in oil prices is a welcome stimulant to economic growth, or an early warning sign of weakening growth, especially in Pacific Rim and Asian economies.

McNerney assured investors in late October that declining oil prices wouldn’t lessen airlines’ demand for the more fuel-efficient planes that Boeing makes.

Oil prices would need to fall “a long way from where we are now” before “you begin to see even [an] incremental impact” on airlines’ demand for more fuel-efficient aircraft, he said.

But when McNerney said that, the Brent crude benchmark was at about $85 a barrel; today it is below $59 a barrel for the first time since the spring of 2009.

China has, of course, been one of Boeing’s best markets for years, and there was related aviation news from China Tuesday with the Financial Times reporting that the top economic planning agency has given its approval to a new $13 billion airport in Beijing.

But the FT portrayed this as “part of government efforts to boost flagging growth by accelerating construction of state-led infrastructure projects.”

The FT notes that Beijing’s existing airport was completed only six years ago. (Just for comparison: New York City’s LaGuardia Airport was built in 1939.)

“An oversupply of airports is different than an oversupply of planes,” explained Derek Scissors, a resident scholar at the American Enterprise Institute who specializes in Asian economic trends.

“China is plainly building too many airports (almost 100 more on the way) and many of them are too large. This is merely to boost short-term economic numbers, and will waste a great deal of money.”

But he added, “Since it’s state-controlled, top to bottom, it doesn’t qualify as a bubble. Just a bad idea.”

He also said, “The Chinese don’t get the same benefits from over-ordering planes and there are no reports of aircraft sitting idle, as there are with facilities. The main threat to Boeing is longer-term: the Chinese are trying, not yet successfully, to make their own aircraft.”

In the near term he added, “Boeing is at risk of overstating the vigor of the Chinese economy and thus the demand for its products.”

December 15, 2014

Senate Rebuffs Cruz Critique of Travel Promotion

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Sen. Ted Cruz, R-Texas (Photo By Tom Williams/CQ Roll Call)

In his last-ditch effort to stop the $1.1 trillion omnibus spending bill on Friday night, Sen. Ted Cruz, R-Texas, fired a glancing shot at Senate Majority Leader Harry Reid, D-Nev., and at his support for Brand USA, a public-private partnership Congress created in 2010 to persuade foreign tourists to visit the United States.

Cruz ended up on the short end of a 56-to-40 Senate vote to pass the omnibus which includes a provision reauthorizing Brand USA.

The travel promotion agency is funded through a $10 fee added to the application charge paid by visitors to the United States from the 38 countries in the Visa Waiver Program. The 38 include most of the western European countries as well as a few others such as Japan and Australia.

Federal backing for Brand USA, limited to $100 million a year, is matched by U.S. travel and tourism companies and state and local visitor agencies.

In a Senate floor speech Friday night, Cruz called Brand USA “another bit of corporate welfare,” adding that it “is one of the current majority leader’s pet projects because it helps promote casinos in his home state. Last I checked, casinos were very profitable endeavors that didn’t need the taxpayers helping them out, didn’t need the Congress serving your hard-earned dollars and handing it out to promote casinos.”

But Jonathan Grella, senior vice president of public affairs at the U.S. Travel Association, said Brand USA is about far more than luring foreigners to Las Vegas.

He said many businesses in Texas who benefit from foreign tourism “would vehemently disagree with the senator, as would the main sponsors of the [Brand USA authorization] measure who hail from Minnesota, Missouri, Vermont, and Florida,” referring to Sen. Amy Klobuchar, D-Minn., Sen. Roy Blunt, R-Mo., Rep. Peter Welch, D-Vt., and Rep. Gus Bilirakis, R-Fla.

“I think that says everything about how broad the benefits from Brand USA go,” Grella said. “The genesis of the focus on Vegas in particular is born out of the majority leader’s support. And anything that the majority leader supports, in the view of others, must be a sop to his home state, which is obviously not accurate.”

He added, “This program helps create jobs in all 50 states and that’s why it had such broad bipartisan support…. Many of the most active supporters are from smaller destinations who could use the help” in attracting foreign visitors.

Prior to the 2010 law which created Brand USA, Grella said, the United States was the only major developed country that did not have tourism marketing program.

December 10, 2014

FAA’s Slow Pace On Drones Draws Fire

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Rep. Thomas Massie, R- Ky., is concerned about FAA’s slow pace in issuing drone rules. (Photo By Bill Clark/CQ Roll Call)

The Federal Aviation Administration is walking a fine line on drone regulation: trying to ensure that the unmanned vehicles don’t collide with airplanes, but also not trying to not stifle an infant industry. At the moment, members of Congress aren’t satisfied, if a hearing Wednesday before the House Transportation and Infrastructure Subcommittee on Aviation was any indication.

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December 9, 2014

Korean Air Executive Resigns In Nut Incident

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Korean Air plane sits on the tarmac at Gimpo airport in Seoul on Dec. 9, 2014.(Photo: Jung Yeon-Je/AFP/Getty Images)

Korean Air Lines executive vice president Cho Hyun-ah resigned Tuesday amid a furor over delaying the departure of a flight from Kennedy Airport in New York after ordering the plane back to the gate and telling a senior crew member to get off.

Cho, the eldest daughter of company chairman Cho Yang-ho, was seated in first class and was angered that a flight attendant and a senior crew member did not know the correct procedure for serving macadamia nuts, according to the Associated Press and other news reports.

Korean Air apologized to its customers for the inconvenience of the plane returning to the gate which delayed the departure by about 20 minutes.

The Financial Times reported that some South Koreans viewed the incident as a case study in the “undue influence” that the founding family members of Korean chaebols often wield over the management of the business conglomerates.

Cho Hyun-ah is the granddaughter of Korean Air Lines founder Choong Hoon Cho, who was the head of the Hanjin Group, which includes Hanjin Shipping, the world’s eighth largest shipping company.

December 8, 2014

Friday Q & A: Charlie Leocha of Travelers United, Part Two

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Passengers at Dulles International Airport outside Washington, DC, on Thanksgiving Eve. (Photo: Paul J. Richards/AFP/Getty Images)

Here is the second part of our conversation with travel consumer advocate Charlie Leocha of Travelers United.

Didn’t the House pass a bill in the last several months on disclosure of ancillary fees?

The House passed a bill called the Transparent Airfares Act of 2014, and the Transparent Airfares Act is anything but transparent. It’s an example of Congress operating in the most anti-consumer way possible.

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December 5, 2014

Friday Q & A: Charlie Leocha of Travelers United, Part One

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A Southwest Airlines jet lands at LAX on Thanksgiving eve in Los Angeles. (Photo by David McNew/Getty Images)

Charlie Leocha is chairman and founder of Travelers United, a non-profit group that argues that travelers should get better treatment from airlines, rental car companies, and other travel businesses.

We spoke to him this week about his group’s focus on ancillary fees and other matters.

Can you give us your views on opaqueness and disclosure of fees that airlines charge?

In 2008 the airlines started to unbundle their airfares and as they were unbundling their airfares and breaking out their baggage fees and they kept adding fees, it kept making it more and more difficult for consumers to know what the full price of travel was going to be.

The old days of being able to go on to Expedia or other websites and compare prices across all airlines was gone.

So that got me to work together with a coalition of other organizations in Washington like the American Society of Travel Agents, a number of the online travel agencies such as Expedia, the Business Travel Coalition, and we all realized we were all trying to get the same thing: disclosure of ancillary fees.

Has Congress fixed that problem?

No, that problem is still not fixed.

We had a partial fix to it from DOT with a rulemaking [in 2011] in which the airlines were required to have one page, linked from their home page, with all the ancillary fees on it.

However, that fix allows airlines to put in ancillary fees in a pricing range, without making it flight-specific and passenger-specific.

In the meantime, the airlines have started to have all sorts of exceptions to their rules.

In other words, there’s a baggage charge for most of the airlines of $25 for the first bag.

However, if you use a certain credit card, you don’t have to pay that; if you are a certain elite level of frequent flyer, you don’t have to pay that; if you’re know somebody and you’re on the same passenger name record or the same reservation record as someone who has these exemptions, those exemptions pass along to the other people on that record.

So the airlines have turned what used to be a relatively simple process of comparing prices across airlines into an incredibly complex situation ….

There is a rulemaking [on ancillary fees] right now … being put together by the Department of Transportation and it will then go to the Office of Management and Budget and then back to the Department of Transportation and be released.

November 25, 2014

U.S., EU Officials Meet On Norwegian Air Controversy

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A Norwegian Air Shuttle Boeing 737 (Photo: Aas Erlend/AFP/Getty Images)

Transportation Department and State Department officials met Tuesday with representatives of the European Union to discuss why the Transportation Department hasn’t yet decided on an application for a foreign air carrier permit from Norwegian Air International (NAI), the Ireland-based affiliate of the budget airline Norwegian Air Shuttle.

Norwegian Air Shuttle CEO Bjorn Kjos said in a speech in Washington last week that granting the permit was “long overdue.” His company says that by not granting the permit the United States is not honoring its obligations under a EU-U.S Open Skies Agreement.

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November 24, 2014

FAA Review Of Chicago Fire Focuses On Insider Threat

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Passengers wait to reschedule flights at O’Hare International Airport on Sept. 26 after arson destroyed equipment at an air traffic control facility. (Photo by Scott Olson/Getty Images)

Pay more attention on the threats from within.

That’s one lesson of a 30-day internal Federal Aviation Administration review of the Sept. 26 fire set at the Chicago Air Route Traffic Control Center.

Brian Howard, a contractor who worked at the center, was charged in a criminal complaint in the incident which disrupted travel and forced the FAA to move air traffic control to its centers in Minneapolis, Kansas City, Cleveland and Indianapolis.

The internal review, which the FAA released Monday, found that dealing with external threats has until now been “the primary focus of the FAA security regime.”

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Friday Q & A: Rep. Rick Larsen, D-Wash., Part Two

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Rep. Rick Larsen, D-Wash., in his district in Mount Vernon, Wash. (Photo By Tom Williams/Roll Call via Getty Images)

Here’s the second half of our interview with Rep. Rick Larsen, D- Wash., who is the senior Democrat on the House Transportation and Infrastructure aviation subcommittee.

You said at Tuesday’s hearing on FAA reauthorization, “If we’re going to ‘go big’ in this bill… we must do so methodically, with a clear statement of the problem we are trying to solve.” So what is the problem you’re trying to solve?

The problem the aviation subcommittee will try to solve is not one problem. For NATCA it’s funding stability. For Airlines for America, representing the airlines, it’s the full implementation of NextGen so that they can start seeing the benefits to them. Those are two very different problems but some are suggesting that by doing a broader air traffic control reform Congress can solve these individual problems. I’m not certain about that.

And based on the hearing that we had, I continue to conclude that there’s no consensus among stakeholders on a broader air traffic control reform, because they did not all come up with the same answer to how you fix these problems.

As far as FAA funding certainty, having those of us who fly pay a dedicated user fee, as part of the cost of the airplane ticket, would be one way to provide that.

You’re already paying right now in the form of a passenger facility charge to help with funding for airports.

With regard to the use of the national airspace, yes, the people who fly benefit from that.

But I think we need to look at the national airspace like the national highway system in that everybody benefits from having it.

So it does make sense to have some general Treasury funding as part of that funding picture  for the national airspace.

I do not see how we move to a user fee system in the United States because of the resistance from some groups.

And the idea that we have to move to a user fee system says that Congress is failing at funding aviation in this country. We didn’t use to have these funding problems. We have the funding problems now because of sequestration and because of government shutdowns.

As a country, we just need to decide if we want to have a national airspace, or if we want to partition it off to those who are most willing to spend the most to use it.

One non-FAA question: about the oil train issue. The last number that BNSF filed with the state was that 8 to 12 Bakken oil trains a week go through your district.

Whatever one might say about pipelines being built, it looks like this oil-by-rail traffic will continue, since you have five refineries in your state that are using this oil from North Dakota.

Are you confident that what the Obama administration is doing and the PHMSA (Pipeline and Hazardous Materials Safety Administration) rule that’s is in the works are making it as safe as possible to move oil by rail?

I don’t see the day right now where a pipeline is going to be built from North Dakota into Washington state to service the refineries and deliver Bakken oil.

Mile for mile, I think pipelines are safer, but moving things by rail is safe too….

I think that because of the increase of Bakken oil being delivered by rail, it makes perfect sense to move forward on a strong safety rule that deals with the tank car design, the frequency of rail line inspections, notification to first responders and to the communities, as well as several other issues.

I think the administration’s approach on this is the right approach; I’d like to see them move faster on it…

I think the resistance from some in the industry to push back against tougher tank car design is wrong-headed. We need tougher tank cars, there’s no argument otherwise.

[Editor's Note: Click here for Part One of the interview.]

November 21, 2014

Friday Q & A: Rep. Rick Larsen, D-Wash., Part One

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Rep. Rick Larsen, D-Wash. (Photo By Tom Williams/Roll Call via Getty Images)

First elected to the House in 2000, Rep. Rick Larsen, D-Wash., is the ranking Democrat on the House Transportation and Infrastructure aviation subcommittee. He’s playing a lead role on the bill that the House is poised to take up next year to reauthorize the Federal Aviation Administration and perhaps make basic changes in how the nation’s airspace is managed.

Larsen also represents a district that includes Boeing’s giant aircraft manufacturing plant in Everett, Wash.

Here are excerpts from our conversation Thursday.

Is it likely that Congress can pass both a long-term surface transportation bill and a FAA reauthorization bill next year? That’s an awful lot in one year.

I can only speak for the House of Representatives and I believe we’re going to give it the old college try.

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November 20, 2014

Head Of Low-Fare Carrier Woos Americans

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CEO of Norwegian Air Shuttle, Bjorn Kjos (Photo: Junge Heiko/AFP/Getty Images)

Bjorn Kjos, chief executive officer of Norwegian Air Shuttle, parent company of a low-fare carrier that wants Department of Transportation permission to provide more flights between Europe and the United States, made his case to airline industry leaders at a speech in Washington Thursday.

Kjos said he’d be a job creator for Americans by bringing European and Asian tourists to American cities, hotels, and tourist sites.

And he said “if I fly twice as many people into the U.S., I need twice as many cabin attendants, I need twice as many pilots.”

Full story

November 19, 2014

NTSB Ruling Affirms Regulations Still Apply to Drones

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Senate Judiciary Committee Chairman Pat Leahy, D-Vt., holding an unmanned arial vehicle at a 2013 hearing. Sen. Al Franken, D-Minn., is at right. (Photo By Tom Williams/CQ Roll Call)

The National Transportation Safety Board took a significant step this week on unmanned aerial systems (UAS), or drones. It said that federal aviation regulations still apply to drones even as everyone in the UAS world awaits the Federal Aviation Administration’s proposed rule governing drone flights.

In most cases UAS flights are banned. The FAA has granted some exemptions: in September it gave exemptions to six aerial photo and video production companies.

In its ruling Tuesday the NTSB, acting as a quasi-court of appeals, sided with the FAA in the case of Raphael Pirker who’d flown a drone above the University of Virginia campus in 2011.

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What If Every (Travel) Day Were Like Thanksgiving?

New data released by the U.S. Travel Association says that everyday air travel could soon come to resemble the Wednesday before Thanksgiving, when passenger volumes can increase by 108 t0 259 percent more than that of a normal day.

According to the data, almost “half of our [30] major airports are already experiencing Thanksgiving-like congestion levels at least one day every week (an increase from 6 in last year’s study.)” and that all 30 airports will reach Thanksgiving-peak levels on an average of one day per week within the next six years.

During a conference call Tuesday, Roger Dow, president and CEO of the U.S. Travel Association, said, “The already bad news about our overwhelmed travel system has gotten worse… and this headache goes beyond the traveling public and passengers,” adding that congestion is bad for the economy and is tied closely to the nation’s gross domestic product (GDP).

The U.S. Travel Association estimates that in 2013 alone, 38 million trips were avoided because of unwillingness to deal with airport congestion, costing the U.S. economy $35.7 billion.

When asked about the congressional role in easing air travel congestion, Dow said that when Congress takes up next year’s Federal Aviation Administration (FAA) reauthorization, it should provide more infrastructure investment and give more spending flexibility to airports.

He also insisted that Congress should look at  adjusting user fees and investing in NextGen air traffic control systems.

But when asked about his confidence in Congress to address these concerns in an FAA reauthorization bill, Dow said, “if past is prologue, it’s unlikely that Congress will increase investment.” But he expressed a little optimism by later noting that flexible spending and local control are “Republican principles” and would perhaps appeal to the new Republican-led 114th Congress.

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