Tuesday, January 29, 2019

Shutdown renews call for air traffic control reform

Airline industry may renew calls for privatizing air traffic control - Business Insider - Rachel Premack:

January 27, 2019 - "The longest-ever government shutdown ended Friday, totaling 35 days. And for airlines, the effects of the shutdown can be quantified in tens of millions. Southwest Airlines said the government shutdown cost it more than $10 million. Delta said it lost $25 million in revenue during the month of January.... Federal airport workers were hit particularly hard by the shutdown, as they were forced to work without pay and missed two paychecks....

"Cowen analysts wrote in a note to investors on Friday that the myriad issues that the government shutdown foisted upon the airline industry would strengthen arguments in favor of privatizing. '[I]n our view, this is another major factor in airlines' support of setting up a private company to manage the country's air space,' Cowen analysts Helane Becker, Conor Cunningham, and Tyler Seidman wrote.

"Trade organization Airlines For America (A4A) is a major champion for the privatization cause. A4A's members include UPS, FedEx, United, Southwest, and ... six major airlines.

"In June 2017, President Donald Trump outlined a plan to 'modernize' America's skies. One of the more controversial components of that plan was to privatize the air traffic control system, which he said would help quickly update outdated technology and cut costs for consumers.

"A4A agreed with Trump's plan. 'Flight delays cost the economy $25 billion last year, and our antiquated ATC system is responsible for almost half of those delays,' the organization wrote.

"'If you look at service between the Eastern US and the West Coast, flight times today are much longer than they were 20 or 30 years ago ...' Hawaiian Airlines Chief Commercial Officer Peter Ingram told Business Insider's Benjamin Zhang in 2017 ... 'because we confine ourselves to a fraction of the available airspace because we simply don't have the ATC infrastructure to be able to support taking full advantage of that'....

"No part of Trump's modernization bill has gone through yet, but Cowen analysts said that the shutdown could certainly bolster the need for the privatization component. 'To date, bills in Congress to set up a separate corporation to manage air traffic control have gone nowhere,' they added. 'This issue could be a turning point for change.'"

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