{"id":7785,"date":"2015-10-15T08:00:53","date_gmt":"2015-10-15T15:00:53","guid":{"rendered":"http:\/\/spijue.wpengine.com\/news\/big-3-airlines-flexing-their-political-muscle-in-washington\/"},"modified":"2015-10-15T08:00:53","modified_gmt":"2015-10-15T15:00:53","slug":"big-3-airlines-flexing-their-political-muscle-in-washington","status":"publish","type":"post","link":"https:\/\/www.juneauempire.com\/news\/big-3-airlines-flexing-their-political-muscle-in-washington\/","title":{"rendered":"Big 3 airlines flexing their political muscle in Washington"},"content":{"rendered":"

WASHINGTON<\/strong> \u2014 U.S. airlines have ramped up an aggressive lobbying campaign that seeks nothing less than converting the government from industry regulator to business ally.<\/p>\n

The big three legacy carriers \u2014 Delta, American and United \u2014 want the Obama administration to protect them from competition from foreign airlines, arguing those rivals can undercut ticket prices thanks to government subsidies or cheaper labor.<\/p>\n

At the same time, the U.S. airlines want Congress to roll back or forestall rules aimed at protecting consumers. One is a requirement that airlines show ticket buyers the full cost of fares, including taxes and fees, instead of burying the information in fine print.<\/p>\n

The lobbying already has been effective. At the urging of the big three and the Air Line Pilots Association, 262 House members and 22 senators wrote the administration asking for a freeze in the number of flights to the U.S. now allowed for three Persian Gulf airlines \u2014 Emirates, Etihad and Qatar \u2014 and discussions with the United Arab Emirates and Qatar about whether those airlines are violating aviation treaties with the U.S.<\/p>\n

Such \u201copen skies\u201d agreements, a hallmark of U.S. policy for two decades, permit U.S. airlines broad access to aviation markets in more than 100 countries in exchange for similar access to the U.S. for those countries\u2019 airlines.<\/p>\n

The U.S airlines and their unions say the Gulf carriers have received $40 billion in subsidies from their governments since 2004, in violation of the treaties, and those subsidies have allowed them to charge lower fares and gain market share.<\/p>\n

Consumer advocates say the U.S. carriers have carved up about 80 percent of the lucrative trans-Atlantic market through joint ventures and alliances with overseas airlines, and now are trying to ward off competitors offering a cheaper alternative.<\/p>\n

In January, the top executives of American, Delta and United pressed their case in private meetings with the secretaries of Transportation and Commerce, as well as White House and State Department officials. The heads of American and Delta followed up with a meeting with Secretary of State John Kerry on Sept. 17.<\/p>\n

The big three and their pilot unions have also blocked an application by Norwegian Air International, a subsidiary of Norwegian Air Shuttle, the third largest low-cost carrier in Europe, to fly to the U.S. from Europe and Asia. They say the subsidiary\u2019s business model would drive down wages and undermine safety; Norwegian denies that. The Ireland-based subsidiary plans to hire pilots through a Singapore broker and base them in Thailand.<\/p>\n

On another front, Delta Air Lines, which carried more passengers last year than any airline in the world, has been campaigning to block the U.S. Export-Import Bank from helping foreign competitors such as Air India and the Gulf carriers finance the purchase of planes from Boeing. Delta says the planes are used to compete on routes Delta also flies. Boeing is the nation\u2019s largest exporter in dollar terms.<\/p>\n

Tea party conservatives in the House have branded the bank an example of \u201ccorporate welfare\u201d and have prevented Congress from renewing the bank\u2019s lending authority, which lapsed on July 1.<\/p>\n

It\u2019s part of a struggle by airlines to maintain control of international markets for their joint ventures and alliances \u201cin the fastest-growing regions of the world\u201d such as the Middle East and southern Asia, said Charlie Leocha, president of the consumer group Travelers United.<\/p>\n

Delta says it isn\u2019t trying to gain \u201cgovernment protection from competition, but to ensure our national policies foster fair competition.\u201d<\/p>\n

U.S. airlines are not united on these issues. Delta is alone in its opposition to the bank. JetBlue and others oppose the big three\u2019s position on the Gulf carriers. JetBlue transports passengers arriving in the U.S. on those carriers to other cities.<\/p>\n

What does unite the airlines and their trade association, Airlines for America, is opposition to consumer protection rules issued or proposed by the Transportation Department. Several airlines took their case to the Supreme Court to block a regulation that requires airlines to display ticket prices that include taxes and fees. After they lost, they persuaded the House to twice pass a bill to roll back the rule.<\/p>\n

The Senate has shown no interest in taking up the legislation, but Nick Calio, president of the trade association, said the issue is not dead and the airline industry will prevail, eventually.<\/p>\n

\u201cSome of the members of Congress are fond of telling me, \u2018You can\u2019t get everything you want\u2019,\u201d he said in an interview. \u201cI just don\u2019t take that attitude. We can, and we know that, so we\u2019re making progress.\u201d<\/p>\n

Airlines also oppose a proposed requirement that ticket sellers inform consumers of the cost of a first and second checked bag, an advance seat assignment and a carry-on bag on the first computer search screen where airfares are displayed, rather than waiting until a buyer has selected a fare and is checking out. That way, the department reasons, consumers will know the full cost of the trip from the beginning and won\u2019t be surprised later by fees, which can vary widely.<\/p>\n

In general, airlines say it\u2019s in their interest to keep their passengers happy, so these sorts of consumer protections are unnecessary.<\/p>\n

The state of government regulation of airlines is \u201cdismal,\u201d Calio, the top White House lobbyist under Presidents George H. W. Bush and George W. Bush, said in a speech to the International Aviation Club last year. \u201cWe are still operating in an environment where the DOT thinks it needs to protect customers from airlines,\u201d referring to the federal Transportation Department.<\/p>\n

Airlines also are fighting airports over whether to raise from $4.50 to $8.50 the \u201cpassenger facility charge\u201d included in tickets. The fee hasn\u2019t increased in 15 years. It generates money primarily used for additional airport runways and gates.<\/p>\n

Airlines say the $4-increase per flight segment would reduce ticket sales. Airports and industry observers say the issue is really about controlling access to airports. Airports want to use the money to enlarge terminals and add gates in order to attract more airlines. But airlines already there have an interest in keeping out competitors. Because of mergers, one or two carriers control a majority of the market at most airports.<\/p>\n

The airlines are the political muscle behind a movement in Congress to take responsibility for air traffic control away from government and give it to a nonprofit corporation. The hope is that shift would avoid congressional budget fights hampering modernization of the air traffic system. Private aircraft owners, however, worry the change would shift costs to them and force them from busy airports to make more room for airlines.<\/p>\n

At the same time, airlines are under pressure from the Obama administration. The Justice Department is investigating whether Delta, United, American and Southwest have colluded to limit available seats and keep fares high. United\u2019s chairman and CEO, Jeff Smisek, stepped down on Sept. 8 amid an investigation into the airline\u2019s dealings with the agency that operates New York-area airports. The Transportation Department is investigating whether airlines engaged in price gouging in the Northeast after a deadly Amtrak crash in Philadelphia in May left passengers scrambling for travel alternatives.<\/p>\n

To bolster their influence, airlines \u2014 Delta in particular \u2014 have hired from their former overseers.<\/p>\n

Robert Rivkin, a former general counsel at the Transportation Department who oversaw consumer regulations, is Delta\u2019s senior vice president and deputy general counsel. Bob Letteney, who was the department\u2019s assistant secretary for aviation and international affairs, is a Delta managing director. Will Kinzel, another Delta managing director, was a policy adviser to House Speaker John Boehner, R-Ohio.<\/p>\n

The revolving door spins both ways.<\/p>\n

Chris Brown was a vice president at Airlines for America before he was hired this year as staff director for the House Transportation and Infrastructure subcommittee on aviation. The full committee\u2019s chairman, Rep. Bill Shuster, R-Pa., has acknowledged a \u201cprivate and personal relationship\u201d with Shelley Rubino, a vice president of the trade group who lobbies his committee. Shuster\u2019s personal office chief of staff, Eric Burgeson, is married to Christine Burgeson, a senior vice president at the trade association. A former US Airways lobbyist, Tom Chapman, is the Democratic counsel for the Senate Commerce Science and Transportation subcommittee on aviation. Former Sen. Bryon Dorgan, D-N.D., chairman of that subcommittee until he retired in 2011, has been hired by American to lobby for transferring air traffic control to a nonprofit corporation.<\/p>\n

The airline industry and its employees donated nearly $3.6 million to congressional candidates for the 2014 elections. The industry spent nearly $26.5 million on lobbying last year, according to the political money website OpenSecrets.org. Three days after Boehner announced he was resigning from Congress, airline CEOs and lobbyists flocked to a fundraiser for Majority Leader Kevin McCarthy, R-Calif., who at the time was seen as Boehner\u2019s most likely successor.<\/p>\n

Four years ago, Airlines for America and its members proposed that Congress and the administration create a \u201cnational airlines policy\u201d that would bolster the industry\u2019s economic well-being by decreasing taxes, reducing regulation and modernizing the air traffic control system. At the time, many airlines were operating on the thinnest of profit margins. But lately airline profitability has rebounded thanks to mergers, lower fuel prices and an improved economy.<\/p>\n

The lobbying fight for that goal is more intense than ever. To Calio, there are \u201csome champions on Capitol Hill who are willing to stand up for the industry.\u201d But more work needs to be done, he said, to counter the perception that now that the industry is profitable, \u201cthat is somehow a bad thing.\u201d<\/p>\n

___<\/p>\n

Follow Joan Lowy on Twitter at http:\/\/www.twitter.com\/AP_Joan_Lowy<\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTON \u2014 U.S. airlines have ramped up an aggressive lobbying campaign that seeks nothing less than converting the government from industry regulator to business<\/a> ally. The big three legacy carriers \u2014 Delta, American and United \u2014 want the Obama administration to protect them from competition from foreign airlines, arguing those rivals can undercut ticket prices […]<\/p>\n","protected":false},"author":107,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[65],"yst_prominent_words":[],"class_list":["post-7785","post","type-post","status-publish","format-standard","hentry","category-news","tag-nation-world"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/7785","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/107"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=7785"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/7785\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=7785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=7785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=7785"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=7785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}