Plane Conversations

A couple of months ago, my son announced that he “needed” this particular red sweatshirt.  It was absolutely vital that he have it.  In fact, civilization as we know it might actually end, should he not get this shirt.  Since I know that he has a closet full of sweatshirts, albeit none of them red, I didn’t see this as a crisis of need, more like a crisis of want.  In the interest of saving civilization, I told him that we could pick that up on our next trip to the mall; however, he would need to pay for it out of money he’d earned.  Hold the phones!  Money he’d earned?!  Magically, the crisis evaporated; the sweatshirt was no longer needed.  Civilization was saved.

Last week, US Airways CEO Doug Parker announced that maybe the airlines don’t need the NextGen ATC system they’ve been clamoring for.  ATW Online quotes Parker as saying at the carrier’s media day in Phoenix,”There is not a capacity issue in the United States right now as it relates to air traffic control, so putting in place NextGen ATC, while it makes all the sense in the world, isn’t going to save the airlines dramatic amounts. . .So our position is so long as we have to pay for [flight deck equipment], we prefer not to have it.”  And a recent Washington Post editorial indicates that US Airways is not alone in it’s unwillingness to foot the bill to retrofit their fleets with the necessary equipment.  In a rebuttal to the editorial, the Air Transport Association’s James May says that the article misses the point, that airlines are already paying billions in taxes into the Airport and Airway Trust Fund and that the FAA is the one who will realize multiple millions in savings; so, the government should be the one to pay for aircraft upgrades.

The logic eludes me on this one.  Why should the government pay to upgrade a private asset, even if the upgrade is to allow the asset to communicate with a government infrastructure?  The funds in the Airport and Airway Trust Fund won’t cover the costs of building, launching and maintaining all of the satellites required for the improved ATC system.  Personnel retraining, alone, is going to be a massive government expense.  In the end, overall savings will eventually cover these costs.  The airlines have lobbied for NextGen implementation saying that the more direct routes will reduce fuel costs, allow for better fleet utilization and, perhaps even reduce the number of ATC delays, allowing the scheduled airlines to operate more efficiently.  They should, therefore, be able to operate more profitably.  May doesn’t believe that airlines should pay for decreased government costs, but he somehow thinks it makes sense to require that the government (or better yet, general aviation through user fees) should have to pay for decreased airline costs?  Again, I fail to see the logic.

Interestingly, the Washington Post editorial points out that, in 2007, Southwest Airlines was the first carrier to commit to using its own money to retrofit its aircraft and that more than 60% of their fleet will be NextGen ready within the next few weeks.  Who has more credibility here - US Airways, a carrier that has lost money hand over fist for the past several years or Southwest Airlines, a carrier that has used innovative practices to turn a profit during the same time period?

Whether it’s a teen-ager, a corporation, or a government, it’s always easy to spend other people’s money.  You can easily measure commitment to a belief or project when you see how many of their own resources an entity is willing to use to see it through.

In this case, it looks like only the airlines that are interested in operating even smarter are the ones that are already the most profitable.

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Looking at the con-trails that aircraft leave in the sky, what kid hasn’t said something about the airplane’s “smoke?”  While those trails are more  water vapor condensed around particles than they are smoke, there’s no denying that aviation has a huge carbon footprint – from aircraft and ground equipment emissions to de-ice and mechanical fluids to passenger trash.

According to the Pew Center on Global Climate Change,  ”Aviation and marine transportation combined are responsible for approximately 5 percent of total GHG emissions in the United States and 3 percent globally and are among the fastest growing modes in the transportation sector. Under business-as-usual forecasts, CO2 emissions from global aviation are estimated to grow 3.1 percent per year over the next 40 years, resulting in a 300 percent increase in emissions by 2050. … Controlling the growth in aviation and marine transportation GHG emissions will be an important part of reducing emissions from the transportation sector.”  The concern is less about aircraft emissions today and more about their rapid growth and exponential increases.  Reducing this footprint is going to take a concerted effort from several sectors including fuel research, aircraft design and air traffic control.

The aviation industry is already set to benefit from alternative fuel research.  AZoCleantech reported on 25 March 2010 that “According to the projections in the “Camelina Aviation Biofuels Market Opportunity and Renewable Energy Strategy Report,” released by Biomass Advisors’ biofuels market researchers, the production of Camelina biofuel is set to reach one billion gallons by the year 2025.”  While this certainly won’t supply all of the fuel needed by the aviation industry, it won’t have to.  As we discussed previously, DARPA has developed a process to produce fuel from algae at the same cost as fossil fuels, with production to begin as early as 2013.  The new fuel sources, in theory, would be carbon neutral since the CO2 emitted by the aircraft would be used again by the fuel-producing organisms.  In addition to using more eco-friendly fuels, the industry is designing more efficient aircraft.

Jets used by airlines have more composite material in their bodies than ever before, although aluminum is still the major component in airliner construction.  Increasing the composite percentage from 2% in the 1950s Boeing 707 to 10% in the 2000s Boeing 777 has lightened the aircraft making them more fuel efficient.  The Hawker 4000 with its all carbon composite construction fuselage really lightens the load.  Fuel efficiency is dramatically increased using these new construction materials and structural changes like winglets, which increase efficiency by decreasing drag.

This week, the United States Senate passed a measure to reauthorize the FAA and to pursue implementation of the NextGen air traffic control system.  There are still several details to be worked out with the system and the electronics required to make it work; but, once in use, it will allow aircraft to fly more direct routes between origin and destination, allowing for more efficient use of aircraft and fuel.

Will flying ever be completely eco-friendly?  I don’t think so, or, at least, I can’t really envision it.  On the other hand, how many children of the 50s, 60s and 70s ever really believed that we could have a telephone that would fit in our pockets, play all of our music, remind us of our appointments and connect us to the world?   Maxwell Smart had the best and his was just a shoe!

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The U.S. Senate finally got down to business and did something constructive!

Monday, they passed a reauthorization bill for the FAA that includes funding for the NextGen air traffic control system.

The great news for General Aviation is that there are no user fees in this bill. The Federal Excise Tax for fuel goes up, but we can live with that – especially if we get something for it.

This has been a long battle to fund the system without implementing user fees; but, it looks like for at least the next year or two we can take a breather. Hopefully, those user fees don’t get brought up again.  The possibility exists, though; so, we will have to be vigilant.

Included in the bill are provisions for changing training and pilot qualifications for the regional airlines prompted by the Colgan Air crash last year.

An article posted on Tuesday, 23 March 2010, by Charles Spence, Washington, D.C. correspondent for General Aviation News, says the following:

Both the Senate and House bills were passed without user fees, but the Senate version raises the fuel tax from 22 to 38 cents per gallon to help fund modernization of the aviation system. The Senate bill passed by a vote of 93 to 0.

Craig Fuller, president and CEO of the Aircraft Owners and Pilots Association (AOPA), said that the final bill will give the FAA “the long-term support it needs to move forward with the crucial work of modernizing our air traffic control system, preserving our network of airports and maintaining the safest air transportation system in the world.”

Speaking for the National Air Transportation Association (NATA), James Coyne, president, expressed thanks to the Senate for approving a bill devoid of user fees but that provides a fair jet fuel tax increase.

Ed Bolen, president and CEO of the National Business Aviation Association (NBAA), welcomed passage of the bill “to fund the FAA and continue transformation to a Next Generation Air Traffic Control — NextGen — aviation system.” He added that the NBAA and other general aviation organizations have been strong advocates for proposals to modernize the nation’s aviation system and that passage of the reauthorization is a good step in that direction.

Pete Bunce, president and CEO of the General Aviation Manufacturers Association (GAMA), echoed those comments, saying that his association was pleased with passage of the bill, which takes a number of critical steps needed for the acceleration of NextGen.

No user fees and a $.16 per gallon increase in the fuel tax (under the Senate version) is something we can all live with. The Senate’s passage, with its vote of 93 to 0 is amazing in itself.  It’s amazing that all parties in D.C. can agree on anything these days.

Conspicuously absent from the comments of the various groups representing aviation interests are comments by the ATA, which represents the airline industry.

Will the airlines applaud this bill as well?  

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The airlines and congress can’t agree on who will pay for the cockpit upgrades that will be required to implement the NextGen Air Transportation System technology. While my belief that airlines create a lot of their own misery leaves me often unsympathetic, in this case, I believe that they seem to have a reasonable argument for help.

Melanie Trottman and Andy Pasztor of the Wall Street Journal  write that “despite years of industry lobbying, the proposal contains no provisions to help cash-strapped airlines pay for billions of dollars in new cockpit technology, a gap that could slow implementation and delay benefits to passengers for years.

Like legislation previously approved by the House, the Senate bill aims to chart a course for transforming the current system of ground-based radars and controllers into a new generation of satellite-based technologies able to handle larger numbers of flights more efficiently and with less environmental impact.

Dubbed NextGen, the network is designed to allow aircraft to fly shorter, more direct routes with pilots taking over some of the core functions of controllers.

The government already has pledged to spend some $20 billion on the new system’s backbone. According to the latest FAA projections, the system essentially would pay for itself through 2018 by reducing total anticipated flight delays more than 20% and saving airlines 1.4 billion gallons of fuel.”

 The article also says, “Gerard Arpey, the chairman and chief executive of AMR Corp.’s American Airlines, said at an FAA conference last week that he was “dumbfounded” that the stimulus bill didn’t provide financial help to install new aircraft equipment. Industry estimates peg such annual costs at $1.5 billion or so through the middle of the decade. If “we are willing to spend billions of general tax dollars for high speed rail,” Mr. Arpey asked, “why not a few for high speed aviation?”

The airline industry, with more than $30 billion of losses in the past three years, seems unwilling to bear the cost. “This is about the complete overhaul of an infrastructure, said Dave Castelveter, a spokesman for the Air Transport Association, a trade group continuing to lobby on the topic.

So far this government has been willing to save financial giants including AIG from their own incompetent and borderline fraudulent activity with a bailout which was big enough to have funded the NextGen system twice over!  The government is also planning to spend billions on high speed rail which will be a direct subsidy to the companies providing passenger train service. How about helping the airlines who are already providing a critical component of our national transportation infrastructure?  

As a small business, if our company was required to spend big money to upgrade our aircraft, it would be devastating to us coming out of a deep recession.  Additionally, I don’t see too many banks willing to loan small businesses money to fund anything, much less something like aircraft avionics upgrades.  So, where does the money come from? No one in any sector of the aviation industry has the ability to print money like the federal government!

Commercial aviation providers pay taxes into the system every day in the form of Federal Excise Taxes at the rate of 7.5% of the price of an airline ticket or 7.5% of the cost of a charter flight. For individuals or corporations flying their own aircraft, there is a fuel tax of $.24 per gallon. How about using some of that funding on NextGen cockpit upgrades as opposed to spending it on congressional pork projects?

Could the guys in D.C. at least offer some no-interest or low-interest loans to the airlines to fund their end of the deal? If the airlines profit from the new system they can and should pay it back.

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Can the FAA speed up implementation of the Next Gen Air Traffic Control System? It seems that the case for funding based on the environment (less emissions), safety, and the economic health of our air transportation system would make this a  good investment of tax payer dollars.

Until now, the hold up has been who was going to pay for it. The battle between the airlines and general aviation as to who foots the lion’s share of the bill has the whole issue locked up in a congressional stalemate. All of us in aviation agree that the need exists and since the government is in the economic stimulus business, why don’t they just fund it?

Andy Pasztor writes in the Wall Street Journal:

“Seeking to accelerate the rollout of new air-traffic control technology, the top U.S. aviation regulator predicted that a satellite-based system designed to allow aircraft to fly shorter, more direct routes would largely pay for itself in fuel savings in just a few years. Testifying before a Senate aviation subcommittee Thursday, Federal Aviation Administration chief Randy Babbitt said the multi-billion-dollar modernization project — dubbed NextGen — would save travelers time, and carriers could “save a billion gallons of fuel a year.”

NextGen, which will use Global Positioning System satellites for navigation, would permit reduced in-flight distances between aircraft and more efficient use of runways. Mr. Babbit’s comments were the most specific he has made to Congress so far about the benefits of a rapid deployment of NextGen.Airlines could achieve $2 billion in savings annually, he said, and an early phase of the proposed system costs $6 billion. Mr. Babbitt acknowledged that in the past, the agency didn’t effectively marshal data to “make the business case” justifying such investments.

With airlines complaining they can’t afford to foot the bill for equipping planes with the new equipment, more than a dozen industry association and aerospace trade groups have banded together to lobby for federal aid. Overall, the upgrades could carry a price tag of around $40 billion, but they will be phased in. The FAA already has budgeted funds to pay for its anticipated share of the costs.”

An efficient and safe air transportation system is a vital part of the United States economic recovery. Air transportation is, in itself, a huge job creator. And, as a part of the overall economy, it is a major contributor to the efficiency and innovation that will make or break this country. People need to travel in order to do business and the less time they spend traveling the more time they have to actually do business.

So why can’t congress get this done?

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