RESPONDED ON NOVEMBER 30, 2009 7:34 AM


### Steve Van Seek, President 

### &CEO, Eno Transportation Foundation

Finally, A Secretary's Call To Act

With the ObamaAdministration in its first year, a long-term FederalAviation Administration (FAA) authorization still held up in the Senate, and no industry

consensus about how to fund future FAA obligations (including NextGen), now is the time for the aviation industry to sit down underthe auspices ofa FederalAdvisory Committee andchart a collaborative path forward for aviation.

Credit goes to Transportation Secretary LaHood for calling together the recent aviation forum and announcing his intentto appoint a year-long FederalAdvisory Committee. It

was heartening to note that during the forum all segments ofthe industry (air carriers, labor, airports manufacturers, consumer groups, academics, andfinancial analysts) acknowledged thatthe industryhas serious andfundamental problems. All said they saw the value in having the industry meet to review the aviation business model and government's involvement with it.

Adiscerning listener also would have heard minimal differences between Republicans and Democrats, industry andlabor, or airlines and airports. This reflects the realization thatwhile there are real disagreements (e.g., how to fund airport capacity orthe organizing requirements for unions), there is more that unites the industrythan divides it. After all, failing airlines are badfor shareholders, labor, communities that own and operate airports, and manufacturers.
Participants also appeared unanimous in knocking down the strawman that government action is tantamountto taking the industryback to the pre-deregulation days of30years ago. In addition to operating air traffic control and funding aviation infrastructure, government regulates aviation issues as diverse as safety, ownership and control, airport
rates and charges, reporting ofdelays, and price transparency. In addition, there are international rules and standards that govern international air services, aircraft emissions, airport ground handling, noise and others. The real question is what government should do, what ifanything in that regulation should change, and how the nation should fund aviation infrastructure going forward. 1 !The Secretary asked forum participants to submitthe five issues they believe shouldbe in the scope ofthe Committee's review. To get the conversation started, here are mine:
1. NextGen (airtraffic control modernization): we need a strategyto specify the capabilities; a road map for how capabilities will be deployed; a better process for FAA to manage the program; and a funding strategyto payfor what all ofthe industry asserts needs to be done.
2. Funding (theAirport andAirway Trust Fund andtaxpayer contributions): the FAA has barelytwo weeks ofreserve in the Trust Fund to payfor future obligations. This at a time when the sources offunding (Le., the revenue generated from ticket taxes and other fees) are dropping with fares, traffic and departures and experts estimating that we need tens ofbillions ofdollars in new moneyfor NextGen. 3. TheAirlines' EconomicModel: While cargo airlines such as UPS and passenger airlines such as Southwest are financially strong, the rest ofthe U.S. industry is intough shape, highly leveraged andvulnerable to one ofa series ofshocks that have shaken the industry over the last decade (recession, acts ofterrorism, SARS, fuel spikes, andthe financial meltdown). This at a time when other airlines such as Singapore, Lufthansa, Air France/KLM and others have prospered. It is fair to say thatthe U.S. airline industryhas lost its place as the preeminent worldwide leader. Why? 4. Air Service: Many ofour nation's small communities continue to lose air service entirely or see their departures drop by 30% or more compared to a decade ago. Among the culprits are high fuel prices and the elimination ofmany smaller turboprops and regionaljets. While the vast majority ofthe aviation industrybelieves thatwe should retain competition and market pricing, what is our answer for these communities? Are there new models beyond the EssentialAir Service and the small community program that could contribute to a revitalization ofservices? Are there new aircraft orbusiness models that could contribute to improving service? Or do wejustlet current trends continue and have communities decoupled from the global network?

On the flip side ofsmall communities are international services and the global nature of the industry. Are there practical ways to take advantage ofinternational capital and the expansion ofmarkets such as China, India and otherdeveloping nations that could help the U.S. industry? 5. The Climate: Despite great progress bythe global aviation industry in designing

more fuel-efficient (and less carbon emitting) aircraft, projected future growth in aviation together with aggressiye goals to reduce greenhouse gas emissions make aviation's future uncertain. While NextGen and a new generation ofaircraft will certainly help, they will notbe enough to counterthe impact that growth will potentially have on the climate. How do we effectively coordinate commendable efforts bythe military, manufacturers, airlines, and airports to reduce the carbon footprint ofaviation? What

are the most effective ways to turn research and development into innovations and incorporate these into the global industry?The aviation industry needs to act now. Ifwe do not, we run the real risks offurther eroding our global position, ceding ourleadership to other nations, and damaging a key component ofour modern lives and economic activity. Let's all supportthe workto come by Secretary LaHood, FAA Administrator Babbitt, and the future members ofthe Committee.