BEFORE THE DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

----------------------------------------------------------- - : In the matter of : : Notice of Proposed Rulemaking for : Flightcrew Member Duty and Rest : Docket No. FAA

- 2009

- 1093 Requirements : :

------------------------- -------------------------------

AIR T RANSPORT ASSOCIATION OF A MERICA, INC

. REPLY TO AIR LINE PILOTS ASSOCIATION, INTERNATIONAL’S RESOPNSE TO PETITION T O CONSIDER LATE

- FILED COMMENTS BASED ON

NEWLY

- AVAILABLE INFORMATION

Co mmunications with respect to this document should be sent to: David A. Berg Vice President & General Counsel Douglas K. Mullen Senior Attorney AIR TRANSPORT ASSOCIATION OF AMERICA, INC. 1301 Pennsylvania Avenue, NW Washington, DC 20004 dberg@airlines.org dmullen@airlin es.org
October 2 6 , 2011BEFORE THE DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

------------------------------------------------------------ : In the matter of : : Notice of Proposed Rulemaking for : Flightcrew Member Duty and Rest : Docket No. FAA

- 2009

- 1093 Requirements : :

--------------------------------------------------------

AIR TRANSPORT ASSOCIATION OF AMERICA, INC. REPLY TO AIR LINE PILOTS ASSOCIATION, INTERNATIONAL’S RESOPNSE TO PETITION TO CONSIDER LATE

- FILED COMMENTS BASED ON

NEWLY

- A VAILABLE INFORMATION

T he Air Transport Association of America, Inc. (“ATA”) petitioned the Federal Aviation

Administration (“FAA”) to accept a filing with imp ortant new ly

- available information , statistics, and analysis regarding the proposed rule in this matter that will substantially assist the agency in

its deliberations to formulate a f inal rule. On October 4, 2011, the Air Line Pilots Association, International (“ALPA”) submitted a response to ATA’s submission dispu ting the accuracy of the jobs impact analysis we submitted, although ALPA did not expressly oppose ATA’s filing. ATA
respectfully submits this brief reply to correct ALPA’s distortions: (a) regarding the accuracy of ATA’s jobs impact analysis, an d (b ) reg arding the accidents relevant to this inquiry.

1. ALPA Understated Job Loss by Half; The Proposed Rule Would Create Structural Cost Increases

As the attached Oliver Wyman report makes clear, ALPA’s contorted effort to put ATA’s jobs impact analysis “in per spective” fails because airline employment decisions do not respond immediately to cost increases, particularly volatile costs like fuel price spikes where the amount and duration of such cost increases necessarily is uncertain. When the job loss record f orReply of the Air Transport Association of America, Inc.

Page 2 scheduled passenger carriers following the 2008 fuel cost spike is put in the proper context, 43,500, or 10.4 percent of full time employees (or equivalents), lost their jobs

– nearly double ALPA’s estimate of 5.5 percent. In addition, a sharp distinct ion can be drawn between the uncertainty of a spike in input prices such as the cost of jet fuel, and the certainty of structural, permanent cost increases associated with new operational rules such as the proposed rule here. As the attached report explains, the data demonstrate the severe impact on airlines from definite

structural changes.

2. The Relevant Accidents are Few and Rare ALPA’s submission intentionally tries to confuse the FAA regarding the accidents

relevant to this rulemaking, suggesting 17 accidents should be co nsidered and attaching a list of those accidents. That list is misleading and a side

- show distraction. For example, several were

non

- scheduled operations and would not be covered by this proposed rule, one was a general aviation accident and another involved a business jet. More importantly, in the majority of those accidents, the NTSB found that fatigue was neither a probable cause nor a contributing factor.
ALPA’s submission, in the face of the authorita tive study by the National Research Council of

the National Academies (“NRC”) , which found nine relevant accidents, is disappointing and

does little more than reflect ALPA’s own self

- interest in this rulemaking. In addition, no party in this rulemaking ha s developed an effective argument that the FAA proposal directly addresses the factors identified in the accidents identified by the NRC. Finally, we also that ALPA asserts the FAA cost/benefit analyses concluded the proposed

rule’s benefits would outweigh its costs . T his is factually incorrect . While we disagree with the FAA’s regulatory analysis in that it severely understates the costs and overstates the benefits, itReply of the Air Transport Association of America, Inc.

Page 3

nevertheless estimate d the costs would exceed the benefits. 1

For the reasons set forth above and in the attached report, ALPA’s submission should not be given any weight and ATA’s petition should be granted.
Respectfully submitted,

AIR TRANSPORT ASSOCI ATION OF AMERICA, INC.

_________________________________ David A. Berg Senior Vice President, General Counsel & Secretary dberg@airlines.org

__________________________________ Douglas K. Mullen Senior Attorney dmullen@airlines.org

October 2 6 , 2011

1 $1.25 billion in costs compared to $659 million in benefits, over ten years. Docket Number FAA

- 2009

- 1093

- 0019.October 2011

Jobs Impact Analysis

ALPA cit es BTS airline employment figures for periods immediately following industry fuel cost increases to argue that the Oliver Wyman jobs impact analysis is inflated. As illustrated below, however, airline employment levels usually do not adjust immediately following a cost increase, but may take several years. What the chart and table below show is that the number of job s lost at the scheduled passenger carriers following the fuel cost increase of 2008 is approximately 43,500, or 10.4%, which is double the figure cited by ALPA. Although the ALPA analysis understates the number of jobs lost as a result of cost increases b orne by the airlines, it highlights the importance of this issue and the need for thoughtful analysis.

Source: BTS Scheduled Passenger C a rrier Employees by Quarter (FTEs)

Date Jobs % Change from Dec 2007 Job Change

Dec 2007 419,712
Apr 2010 376,204

- 10.4%

- 43,508
Source: BTS Scheduled Passenger C a rrier Employees by Quarter (FTEs) Although long

- term fuel price increases have the same effect as other long term cost increases, an important distinction between the fuel price increase of 2008 and the estimated cost increase resulting from the proposed Flight Duty Time ( FD T) r ule is that both the ultimate amount and duration of the 2008 fuel price increase were unknown. In 2008 , a irl ine executives and planners struggle d to decide how much capacity to cut to offset a spike in fuel prices, but d id n ’ t want to cut too much in case the spike prove d to be for only a short period. Although both involve cost increases and therefore capacity

544,400

403,287 419,712

376,204

300,000 350,000 400,000 450,000 500,000 550,000 600,000

2000 2001 2002 2003 2003 2004 2005 2006 2007 2008 2009 2010



### Scheduled Passenger Carrier Employees (FTEs)Response to ALPA October 2011

cuts, industry reactions to increases in highly volatile fuel prices are somewhat more complex than dealing with a known permanent cost increase, such as caused by the FTD r ule.

The structural cost increase that will result from the FTD r ule is more closely analogous to that of the structural revenue/cost changes confronted by the network carriers in the 2000

- 2005 period , as legacy carriers were forced t o reduce costs and capacity when c onfronted with fare reductions caused by low cost carrier market entry. Those cost and capacity cuts resulted in the reduction of passenger carrier employment from 544,000 in May 2001 to 4 03,287 in July 2006

– a loss of over 141,000 jobs or nearly 26% of passenger carrier employees

.

Date Jobs % Change from May 2001 Job Change

May

- 01 544,400 Jul

- 06 403,287

- 25.9%

- 141,113 Jul

- 11 387,038

- 28.9%

- 157,362

In an industry where passenger carriers have lost over 157,000 jobs or nearly 29% of the work force over the past ten years, the job impacts of new rules must be carefully considered

. Finally, we note that job loss estimates are produced on the assumption that other factors, most importantly, underlying demand, remain constant. In an economic environment of strengthening demand, job losses may be less than projected, while in an economic environment of weakening demand, job losses may be greater than proj ected. W ith turmoil in the euro zone and slow economic growth in developed countries , the demand forecast is cautious

. 1

1 “ Tough times ahead as air traffic weakens; declines in freight markets accelerate in Aug

- 2011: IATA , ” 5 October 2011, http://www.centreforaviation.com/analysis/tough

- times

- ahead

- as
- traffic

- weakens

- declines

- in

- freight

markets

- accelerate

- in

- aug
- 2011

- iata

- 59927

.