September 27, 2007 - Congress and the White House this week zeroed in on growing air travel service problems including "record-breaking flight delays, cancellations, diversions and on-board tarmac delays," and inconsistent contingency plans detailed in a Department of Transportation Inspector General report. The report found that in the first seven months of 2007, 28 percent of flights were delayed, cancelled or diverted as the airlines' on-time performance reached its lowest level in the last decade, 72 percent.
Following the report's release and back-to-back hearings on aviation delays this week in the House of Representatives and the Senate, President George W. Bush summoned the heads of DOT and the Federal Aviation Administration to the White House today. "To ensure the summer of 2008 is not worse than 2007," the White House today announced that DOT and FAA are immediately pushing forward on three issues to ease delays in the New York-New Jersey-Philadelphia area, as well as increased consumer protection for all travelers. For example, the federal government established the New York Aviation Rulemaking Committee to "explore market-based mechanisms and other options for addressing airspace congestion and flight delays in the New York area and provide advice, information, and recommendations to DOT and the FAA. ... The group's first meeting is today, and it will meet regularly until its work is completed in December."
Separately, FAA will convene a meeting with air carriers serving John F. Kennedy International Airport to discuss possible schedule reductions. FAA also said it would continue to work on a redesign of the New York airspace, a process begun last week and expected to take five years to complete. The initiatives follow months of hearings and lobbying as Congress debates the once-per-decade reauthorization of the FAA and its funding.
At issue is not only how to fix, but also how to fund any such fixes.
FAA asked for about $65 billion to improve the nation's air traffic control system through 2012. To fund the new system, Congress proposed to both increase existing fees and implement a new $25-per-flight surcharge on all aircraft, which would generate $400 million a year. A debate ensued over the fees to be paid by general or private jets versus commercial aircraft. In addition, the House version of the FAA reauthorization bill allowed airports to increase passenger facility charges and allowed the government to implement a passenger bill of rights. Politicians also raised the notions of charging fees for peak landing slots as a means to even out flight arrivals and forcing FAA to reopen controller contract issues.
Unable to agree on who should fund the next generation of the air traffic control
system--and whether that's the only fix needed to eliminate record delays-- Congress this week is expected to extend the deadline to fund and authorize FAA's scope until Dec. 31, from Sept. 30. The House Monday passed a bill to extend the current FAA authorization and sources said the measure would be voted on by the Senate by Friday. The House last week also approved and sent to the Senate its version of the FAA reauthorization bill, which would provide $66 billion through increased excise taxes, as opposed to a user tax. The bill also raised the passenger facility charge cap to $7 from $4.50 and mandated that airlines and airports detail passenger contingency plans for delays and cancellations.
The Senate bill cleared one committee, but has remained in a second. Staff for both House Democrats and Senate Republicans said the Senate is expected to act on the House bill in coming weeks and then resolve differences in a conference committee. To be comprised of both Democrats and Republicans from the House and Senate, the committee would be allowed to revise measures approved by the full House and Senate. However, such legislation still requires the president's signature before becoming law.
In testimony before both the Senate Aviation subcommittee and House Transportation subcommittee, DOT IG Calvin Scovell III said that in the first seven months of 2007, "more than 54,000 flights affecting nearly 3.7 million passengers experienced taxi-in and taxi-out times of one to five hours, or more. This is an increase of nearly 42 percent as compared to the same period in 2006."
Scovell highlighted four action points that would "help to improve airline customer service and minimize long, on-board delays." First, he called on the airlines to "specify in details their policies and plans to minimize" such delays. Furthermore, "airport operators should become more involved in contingency planning for extraordinary flight disruptions," and contact any aircraft that has remained on a tarmac for two hours to ask for its plan of action. Scovell also called for a national task force of representatives from airlines, airports, FAA and DOT to develop and coordinate contingency plans. Finally, he called on all four groups to "complete actions immediately on outstanding recommendations--some dating back to 2001--to improve airline customer service and minimize long, on-board delays."
Acting FAA administrator Robert Sturgell testified at both hearings that "this past summer, we saw 7.9 million minutes in delays through the system. Of that, 44 percent occurred in the New York/New Jersey/Philadelphia region." He told Congress that a new airspace redesign for the region was projected to save airlines $248 million an annual operating costs and reduce noise for residents.
During testimony in the Senate hearing, Delta executive vice president of operations Capt. Joe Kolshak told senators that "delays cost us more than $700 million a year, but more importantly, our customers pay the price in terms of lost productivity" and frustration.
"As the FAA financing debate heated up this summer, airlines pointed the finger at general aviation for causing delays," said Rep. Jim Oberstar (D-Minn.) in opening his hearing on the delays. Oberstar serves as chairman of the House Transportation and Infrastructure Committee. "However, some of the testimony that we will hear today suggests that operational and technological trends within the airline itself industry are a much bigger factor."
In a research note on the House passage of the FAA reauthorization bill, JPMorgan Securities analyst Jamie Baker said the proposed bill of rights was "more likely to translate into Passenger Bill Of Rights To Pay More, as any thinning of schedules to alleviate delays and stranding of passengers is likely to reduce supply and raise both [unit costs and unit revenues]. However, the increase of the passenger facility charge (currently <$4.50 per segment with an $18 per-ticket cap) to <$7.00 per segment/$28 cap could potentially decrease price-sensitive demand, as it is nothing more than a fare increase with the government pocketing the difference."
In testimony submitted to the House Aviation Subcommittee, Mitre Corp. senior vice president and general manager Agam Sinha noted that operations at seven large hub airports account for 72 percent of delays and increased 10 percent since 2000, while operations at 38 other airports decreased. Mitre operates a center for advanced aviation system development.
"In summary, the answer to the question of why operations are down and delays are up appears to be that traffic levels have increased at the most popular hubs, which have little spare capacity, and have decreased at less popular hubs, which have more spare capacity," said Sinha. "In addition, a significant number of activities to increase airport and airspace capacity have been underway, although they are not keeping pace with evolving aviation industry needs and the shifts in demand in specific locations. Local and regional solutions will continue to be needed to address capacity problems as they emerge; however, a systemwide approach to solving the nation's capacity needs is imperative. Finally, successful implementation of all the planned improvements at airports and in the airspace, as well as enhanced automation and procedures for both ground systems and avionics are critical to ensuring a safe and efficient aviation system both in the near-term and for the future. This will require full participation from FAA, customers, and manufacturers."
