March 17, 2017

On March 8 the Aviation Subcommittee of the House Transportation and Infrastructure Committee hosted the third hearing (out of five planned so far, here’s the first and the second) on the upcoming Federal Aviation Administration (FAA) re-authorization, due to expire at the end of current fiscal year (September 30). This third hearing was dedicated to the “Air Transportation in the United States in the 21st Century” and had five witnesses:

• Brad Tilden, CEO, Alaska Air;
• Russell Childs, CEO, SkyWest;
• Joseph Hete, CEO, Air Transport Services Group;
• Sara Nelson, International President, Association of Flight Attendants-CWA;
• Charles Leocha, Chairman and Co-Founder, Travelers United.

The subcommittee chairman, Frank LoBiondo (R-NJ) started the hearing by noting the role of aviation in the U.S. economy and the lives of Americans. He also emphasized how diverse U.S. aviation is, with private aviation alongside mainline airlines, regional, cargo, and charter companies, each with a unique role.

In his opening statements, the ranking member of the subcommittee, Rick Larsen (D-WA) focused on NextGen, the FAA’s flagship modernization program for air traffic control (ATC). Larsen pointed out that NextGen is a historic shift for ATC, and has already brought $2.7 billion in benefits for the airspace users, with $160 billion expected by 2030. (Ed. Note: For more on the issue of NextGen see our most recent report on ATC reform, Time for Reform: Delivering Modern Air Traffic Control, as well as our FAA Reform Reference Page.)

Full committee chairman Bill Shuster (R-PA), highlighted the role of general aviation (GA) in offering access to the airspace for small communities and training future airline pilots. Full committee ranking member Peter DeFazio (D-OR) mentioned three topics. First, that aviation is experiencing the safest period in history. Second, that airlines are achieving high levels of profits, and that a healthy industry is good for everyone, from employees to consumers. Third, he noted his concerns for the low pay that many starting pilots face in regional carriers, especially considering the high costs to get a pilot certificate.

Starting the witnesses’ opening statements, Tilden mentioned the fact that the aviation industry has changed a lot in the last 10-15 years, and that right now the airlines are investing in their facilities and products, as well as their people (he would later add that the time for infrastructure investment has come, and the airlines are happy to help in those endeavors). He noted, however, that aviation policy must support vigorous competition and while 15 years ago nine airlines carried 80% of passengers, today it takes only the “Big Four” to do the same. He also showed his support for Open Skies policies and for ATC reform. On the latter, he added that Alaska was a pioneer in using satellite-based procedures at airports, but 20 years later those are only used on 4% of their flights.

Representing the regional airlines, Childs stressed the importance of his industry, which follows the same standards as the mainline carriers, and represents 44% of the departures nationwide, and 60% of the airports with commercial service are only served by regional carriers. Childs then discussed the pilot shortage that the industry is facing, saying by 2026 the industry will have a gap of 15,000 pilots, which will mean less 1,500 aircraft in the air, which is roughly two-thirds of the current regional fleet. To ameliorate this issue, he there need to be more pathways to becoming a pilot, and considering the high costs to enter the profession (although with a very high return-on-investment), Congress could act to guarantee loans to prospective pilots, he concluded.

Hete, representing cargo aviation, discussed four issues. First, that cargo pilots should not be subjected to the same rules as passenger pilots. Second, that there needs to be international consistency on the transport of lithium batteries (asked about this later on, Hete said they supported ICAO’s rules, which are currently on hold). Third, Open Skies agreements should remain as they are. Finally, noise restrictions around airports should not expanded.

Speaking on International Women’s Day, Nelson highlighted the role that women play among flight attendants, in which they still significantly outnumber men, and their continuous pursuit of equality in aviation. She then went on to talk about four issues:

• The need for proper rest, with a 10-hour minimum rest period (instead of the current 8 hours), equal to pilots;
• The need for orderly and secure cabins, free of voice calls;
• Compensation levels at regional airlines similar to mainline carriers, as right now regionals pay at 45% the rate of mainlines;
• Create a level playing field internationally by enforcing Open Skies agreements, namely with the Gulf States, and regarding the flag-of-convenience model of Norwegian’s Irish subsidiary. (Ed. Note: for more on the latter see our article from December.)

Finally, Leocha, representing the passengers’ interests, had six points to talk about:

• Since airlines are common carriers, a concept for which there are centuries of tort la, their entire pricing structure, include ancillary fees, should be public information;
• About IT outages, airlines shouldn’t be allowed to treat them as acts of God, they should be held responsible and provide full refunds;
• USDOT should periodically review airline alliances and joint ventures and their effects on competition;
• Open Skies agreements should be protected, as they offer access to zones of the globe that was ignored by U.S. airlines, and bring competition to the transatlantic market;
• Airport taxes should not be increased, and any additional funding should come from the municipalities themselves;
• Airlines should be made to educate passengers about their rights, namely when bags are mishandled or the flight is oversold.

(Ed. Note: To Leocha’s first point, on the day of the hearing, DeFazio and Larsen introduced a bill (H.R. 1420) to force airlines to include a statement about baggage fees in every internet fare quotation, as well as addressing other issues.)

Opening the questioning period, DeFazio started with the Open Skies issues. Talking specifically about Etihad, the ranking member asked if an airline that is owned by the Crown Prince of a dictatorship, and who also runs the airport and the aviation authority, and that flies empty aircraft around the world, would be considered fair competition. Leocha replied that if that was true, then no. Tilden argued that every country sets their airline industry differently, and they need to comply with the international treaties.

Moving on to airport funding, he asked Leocha if he would be opposed to all increases to passenger taxes, even if they have merits, and the airport are bonded out. (Ed. Note: Just last week DeFazio introduced a bill to allow airports to increase passenger facility charges, a kind of local tax.) Leocha replied that there are other ways to fund these projects.

Finally, on ATC reform, DeFazio discussed the constitutional issues surrounding last year’s Shuster’s proposal. Presenting a convoluted chart displaying what he said was the convoluted decision-making tree at the new entity Shuster has proposed, DeFazio noted that Germany had to change their constitution in order to spin off ATC, and there is no way the U.S. would amend its constitution to do so. (Ed. Note: like in many other parliamentary countries, changing the constitution is Germany is not the big deal that it is in the U.S. – all it takes is two-thirds of both chambers of parliament, and Germany has amended its constitution, or Basic Law, at least once a year, on average, since its inception in 1949).

DeFazio alleged that the new ATC entity will have to go to the Secretary of Transportation if they want to increase taxes [sic], or if they want to close a tower, or change flight paths and NextGen procedures. If the Secretary disagrees, then courts will solve they issue. That’s not more efficient that the current way, he concluded.

Larsen asked Tilden about his mention of a 4% use of NextGen procedures nationwide, and whether the figures at Seattle (Alaska’s main hub and one of the first airports were FAA tested NextGen procedures) were higher. Tilden said that they were, but still only around 25% of such procedures were already using NextGen technology even in Seattle. Larsen then asked how can they improve those figures. Tilden replied that there needs to be faster approval, as currently they have to be approved on a case-by-cases basis. Also on this matter, Todd Rokita (R-IN), would later inquire the panel why to solve such a technical issue like that, was there a need for ATC reform and give away (not even sell or lease) the national airspace.

Larsen then moved on to the issue of flight attendant fatigue and asked Nelson to discuss it a little more. Nelson replied that they have been working on the issue for over 30 years, and that the first rules came out in 1994. In response, Rep. Norman Mineta (D-CA) proposed a 10-hour rule equal to pilots, but never came to be. She would later add that ICAO has recommended that rest period should be the same for pilots and flight attendants, but when the rest period for pilots was increased to 10 hours, flight attendants were left behind.

Asking about small airports, Doug LaMalfa (R-CA) inquired if the changing business model of regional airlines, from smaller turboprops to larger jets, will require changes to happen at those small airports. Childs replied that some of these airports might indeed require investments in order to be able to receive those jets. Also on this issue, LoBiondo would later ask what can be done to bring air service to small communities. Tilden replied that everyone needs to work together, and Alaska has done so in the West Coast, working with the local communities to try and find a solution. However, he added, small airplanes are increasing in size, which increases total costs, and he doesn’t know what to do about that, but maybe help from the government would be a solution to prop up service in some of those locations.

Moving the conversation to Open Skies, Daniel Lipinski (D-IL) asked Nelson what was the impact of Norwegian’s operations on U.S. flight attendants. Nelson replied that Open Skies agreements were based on maintaining labor standards, and that the Norwegian model undermines that by using a “flag of convenience” (already being replicated by other European airlines, like SAS) and the use of temporary employment agencies to hire temporary employees anywhere in the world. The fact that they are hiring in the U.S. right now, she added, is no guarantee that they will continue to do so in the future.

Rodney Davis’s (R-IL) first commentary was on student loans, and how he has a bill (H.R. 795) to allow private companies to repay student loans without the employee being taxed on the loan repayment as income. Since Childs mentioned student loans in his opening statements, Davis asked his support for that bill. Then he moved the conversation to ATC reform, and how it can make ATC better. Tilden replied that this is not a technology problem, it’s a technology deployment issue. And that it is time for us to move forward and to create a better airspace, as delays are getting worst and costing taxpayers. Also, safety will be increased if operations are separated from safety oversight, as most countries have done. Childs would add that there need to be caution on how such a new system is funded, but that they are 100% in support of reform.

Discussing airline competition, Daniel Webster (R-FL) asked Tilden if they were satisfied with the way they can obtain a gate. The witness replied that in most airports it’s actually a good system, but there are a handful of constrained airports where they would like more access, and there needs to be better allocation of an airport’s capacity to newcomers.

Both Bruce Westerman (R-AR) and Grace F. Napolitano (D-CA) directed their questions at Nelson. Westerman asked what her concerns were about voice calls on airplanes. Nelson replied that flight attendants have to deescalate conflicts between passengers, and that voice calls have the potential to increase the number of conflicts. She said there is also a concern about security, as terrorists could communicate in real time.

(Ed. Note: The latter is a silly concern. Internet access is almost ubiquitous now on U.S. airlines. Why would a terrorist on a plane talk out loud on the phone about something when they could easily email the same message and not be overheard?)

Napolitano asked about flight attendant pay at regional airlines and the availability of mental health screening for flight attendants. On the first issue, Nelson replied that regionals pay them 45% less than the mainline carriers, with Mesa Airlines being the worst, paying 20% less than the regionals’ average, and they are now voting on a potential strike. On mental health, there are many programs and resources through the union, Nelson said.

Finally, Henry C. “Hank” Johnson, Jr. (D-GA) and LoBiondo asked Leocha about consumer protection issues. The Georgia representative inquired if flight price data is proprietary or public. Leocha replied that it is public information as the airlines are common carriers, and they would like to have access to all pricing data, so that they can put together search engines for flights. They don’t want to take away the airlines’ right to chose where to sell, just want to be able to offer search engine, Leocha added. LoBiondo asked the witness to rate USDOT consumer protection efforts. He replied that in 2009 these were excellent, but since then nothing has really changed.

Written testimony and a video of the hearing can be found here.