Transport Airlines

Airlines For America Hits Roadblock on National Airline Policy

Jan 07, 2014 12:12 pm

Skift Take

Airlines for America confronts obstinance in Congress, which continues to view airlines and passengers as tax revenue.

— Dennis Schaal

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US trade group Airlines For America (A4A) enters 2014 in essentially the exact same position it has been stuck in for over a year – feverishly attempting to convince the US government and legislators that a national airline policy is paramount for the industry to remain competitive on a global scale, especially among carriers in emerging markets whose governments, argues A4A, put less restraints on their airlines.

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The campaign so far has been slow to gain traction, evidenced by the recent bipartisan budget deal reached among US legislators that raises security fees collected by the Transportation Security Administration (TSA) from $2.50 to $5.60 one-way and a total of $11.20 for a round trip flight.

A4A no doubt has faced a formidable challenge during the past couple of years trying to bend the ears of US Congressmen caught up in one of the most divided legislatures in recent memory and convince those representatives major changes are under way in the global aviation industry. Its persistence in sticking to its message that US airlines stand to lose competitive standing is commendable; but it seems Congress is unconvinced that the industry is under any real threat.

That sentiment may be driven by a legislature that largely feels the industry needs to now prove its worth independently, without the curtains of bankruptcy to hide behind. Delta Air Lines appears on a course to sustain its financial stability (although it is taking a protectionist attitude to Gulf carriers), and United and American have aspirations to follow suit.

What inevitably needs to happen is for all countries to knock down artificial barriers to competition in order for all airlines to compete on a global scale. While it seems like a lofty aspirational goal, some regions are moving faster in that direction than others. The US should wake up and realise a mindset change is in order to maintain its competitive edge during the next couple of decades. Unfortunately, a philosophical change is not likely in the short term as Congress is now also making rumblings about taxes on ancillary revenue charges such as baggage fees.

Wider, more enlightened, perspectives need to be applied to the industry, so that US carriers are not constantly confronted by a scenario of devising strategies to sustain profits despite higher tax burdens.

Instead, airlines should be provided an environment where aviation is recognised for the immense bearer of economic and social well-being that it really is – not simply a quick fix milk cow.

For more on this story, read the full CAPA analysis here.

This story originally appeared on CAPA – Centre for Aviation, a Skift content partner.

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