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FAA budget issue might obscure more weighty air industry factors

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FAA budget issue might obscure more weighty air industry factors

By Danny King

Last month’s agreement by Congress to reverse FAA staff furloughs stemming from the federal budget sequester might have done far more to allay political constituents than to make things better for U.S. airline passengers as the country enters the peak summer travel season.

In fact, at least one study suggests the furloughs actually had little impact on airline performance. Moreover, it suggests that the April 26 bill passed by the House of Representatives to eliminate FAA furloughs might have served to mask inefficiencies in a bloated air traffic control system and a consolidating airline industry that has been continuously reducing its labor force to regain lost profits.

The FAA, along with aviation industry members and some travel advocates, trumpeted the bill as a shield against increased flight delays and cancellations.

For the four days ended April 24, the FAA attributed almost 3,500 of the nearly 7,900 flight delays to the furloughs, which led United Continental Holdings CEO Jeff Smisek to call the FAA “irresponsible.”

Katie Connell, spokeswoman for the trade group Airlines for America, said, “Bringing a halt to the furloughs was truly a win for our customers and for the U.S. economy. We don’t think [the furloughs] ever should have happened.”

However, other reports suggest that the FAA furloughs served primarily as fodder for political grandstanding.

“We’re the only developed country in the world that would have a sequestration program that impacts air traffic control,” said Washington-based airline analyst Vaughn Cordle, partner at Ionosphere Capital. “We’re the only country that hasn’t depoliticized this.”

Indeed, for the one week during which the furloughs were in place, 79% of flights serving the largest 36 U.S. airports were on time. According to research firm FlightStats, that was identical to the on-time percentage for the two months leading up to the first day of furloughs.

FlightStats’ earlier numbers are consistent with data from the Transportation Department (DOT), which late last month reported that 80% of flights within the U.S. were on time in February, the most recent month tracked by the DOT.

Either way, the resolution, which enabled the FAA to return to normal operations on April 28, might do little to prevent non-weather-related delays caused by the combination of an antiquated air traffic control system and an airline industry binging on staffing cuts.

With little capital available to invest in the latest air traffic control technologies, the FAA is spending more to process fewer — albeit fuller — flights, furloughs notwithstanding.

Between airline consolidation, the after-effects of the recession and the shrinking inventory of smaller regional flight routes, the number of annual domestic and international flights in the U.S. fell 12% between 2007 and 2012, to 9.8 million flights, according to the DOT.

Yet the annual FAA budget rose 6.7% between fiscal years 2008 and 2012, to $15.9 billion.

“It’s a bloated, inefficient system,” said Cordle, a proponent of privatizing air traffic control services. “Clearly, the system isn’t paying for itself.”

Meanwhile, the aviation industry has been going in the opposite direction, reducing staffing as the number of passengers continues to rebound.

U.S. airlines employed about 380,000 workers in February, down 2.5% from a year earlier, the DOT said last month. February marked the sixth consecutive month of year-over-year employment declines in the industry.

At the same time, air travel continues to grow. U.S. airlines flew 55.3 million passengers in January, up 1.5% from a year earlier, the DOT said last month, citing a separate study. Last year, the number of passengers on U.S. airlines and foreign airlines serving the U.S. rose 1.3%, to 815.3 million.

At least some airline staffing cuts can be attributed to increased efficiencies, according to Scott Hamilton of Seattle-based aerospace consultant Leeham Co.

“Airlines have been investing in check-in kiosks, Internet technology and operations technology for years, which improve efficiency,” he said. “One can hardly say that about the FAA. It’s always ‘tomorrow’ for them.”

While the focus of the industry’s attention was the furloughs of the FAA’s 47,000 workers for at least 10% of their workdays, Transportation Security Administration (TSA) officials have maintained that sequester-related budget cuts will not impact airport-customs staffing.

That didn’t stop the airline industry from taking a shot at the TSA.

“Customs lines at our own U.S. airports have been and remain an ongoing issue for our customers who are traveling into the U.S. from around the world,” said Connell of Airlines for America. “They continue to wait in exceedingly long and completely unacceptable customs lines at many of our U.S. airports.”

In the meantime, sequestration, which is estimated to save the federal government $85 billion a year, has forced the Smithsonian Institution to shutter some exhibit areas, while the capital’s U.S. National Arboretum instituted grounds closures.

The National Parks Service will keep its shorter winter-staffing hours through summer, close some of its campgrounds and suspend two annual military celebrations.

New York’s Fleet Week and Los Angeles’ Navy Days, which take place each May and August, respectively, have been canceled for this year, while San Francisco’s Fleet Week festivities, which take place each fall, will be substantially scaled back with the cancellation of the Navy Blue Angels air show.

Follow Danny King on Twitter @dktravelweekly.

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