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 Obama Administration in its first year, a long-term Federal Aviation 

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 under the auspices of a Federal Advisory 

Committee and chart a collaborative path forward for aviation. 

Credit goes to Transportation Secretary LaHood for calling together the recent aviation 

forum and announcing his intent to appoint a year-long Federal Advisory Committee. It 

was heartening to note that during the forum all segments of the industry (air carriers, 

labor, airports manufacturers, consumer groups, academics, and financial analysts) 

acknowledged that the industry has serious and fundamental problems. All said they saw 

the value in having the industry meet to review the aviation business model and 

government's involvement with it. 

A discerning listener also would have heard minimal differences between Republicans 

and Democrats, industry and labor, or airlines and airports. This reflects the realization 

that while there are real disagreements (e.g., how to fund airport capacity or the 

organizing requirements for unions), there is more that unites the industry than divides 

it. After all, failing airlines are bad for shareholders, labor, communities that own and 

operate airports, and manufacturers. 

Participants also appeared unanimous in knocking down the straw man that government 

action is tantamount to taking the industry back to the pre-deregulation days of 30 years 

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 of delays, 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 if anything in that regulation should change, and how the 

nation should fund aviation infrastructure going forward. 

1 ! 
The Secretary asked forum participants to submit the five issues they believe should be 

in the scope of the Committee's review. To get the conversation started, here are mine: 

1. NextGen (air traffic control modernization): we need a strategy to specify the 

capabilities; a road map for how capabilities will be deployed; a better process for FAA to 

manage the program; and a funding strategy to pay for what all of the industry asserts 

needs to be done. 

2. Funding (the Airport and Airway Trust Fund and taxpayer contributions): the FAA 

has barely two weeks of reserve in the Trust Fund to pay for future obligations. This at a 

time when the sources of funding (Le., the revenue generated from ticket taxes and other 

fees) are dropping with fares, traffic and departures and experts estimating that we need 

tens of billions of dollars in new money for NextGen. 

3. The Airlines' Economic Model: While cargo airlines such as UPS and passenger 

airlines such as Southwest are financially strong, the rest of the U.S. industry is in tough 

shape, highly leveraged and vulnerable to one of a series of shocks that have shaken the 

industry over the last decade (recession, acts of terrorism, SARS, fuel spikes, and the 

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 that the U.S. airline industry has 

lost its place as the preeminent worldwide leader. Why? 

4. Air Service: Many of our 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 of many smaller turboprops and 

regional jets. While the vast majority of the aviation industry believes that we should 

retain competition and market pricing, what is our answer for these communities? Are 

there new models beyond the Essential Air Service and the small community program 

that could contribute to a revitalization of services? Are there new aircraft or business 

models that could contribute to improving service? Or do we just let current trends 

continue and have communities decoupled from the global network? 

On the flip side of small communities are international services and the global nature of 

the industry. Are there practical ways to take advantage of international capital and the 

expansion of markets such as China, India and other developing nations that could help 

the U.S. industry? 

5. The Climate: Despite great progress by the 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 of aircraft will certainly 

help, they will not be enough to counter the impact that growth will potentially have on 

the climate. How do we effectively coordinate commendable efforts by the military, 

manufacturers, airlines, and airports to reduce the carbon footprint of aviation? 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. If we do not, we run the real risks of further 

eroding our global position, ceding our leadership to other nations, and damaging a key 

component of our modern lives and economic activity. Let's all support the work to come 

by Secretary LaHood, FAA Administrator Babbitt, and the future members of the 

Committee.