Apr 02 2003

SHELBY COMMENTS ON FEDERAL AVIATION ADMINISTRATION APPROPRIATIONS FOR FY04

U. S. Sen. Richard C. Shelby (R-Ala.), Chairman of the Senate Transportation Appropriations Subcommittee, commented on Fiscal Year 2004 appropriations for the Federal Aviation Administration (FAA):

“Every year when it comes time to hold hearings on the upcoming fiscal year’s budget request, it is likely that we cover some of the same old ground. But, unlike other agencies or Departments, the nature of the industry and facilities that the FAA regulates seem to be in a constant state of change.”

“A few years ago, we were concerned about hub concentration and anti-competitive behavior. More recently, we turned our concern to airline treatment of passengers and system-wide delays.

“Now, we wonder where all the passengers have gone, whether the hubs will survive, and if the traditional airline structure will remain intact or if we will see something substantially different emerge as a result of all of the upheaval.

“This is a very difficult time for virtually everyone involved in aviation: passengers, communities, airports, airlines, aircraft manufacturers, and the FAA.

“Passengers are anxious about flying in the aftermath of the September 11th attacks. The terrorist threat alert exacerbates people’s fears about the vulnerability of our air transportation system to terrorist attack, and military operations to free Iraq have further increased the public’s concern about the safety of flying.

“In addition, passengers are facing fewer choices in flight options as the air transportation market undergoes the first significant service contraction since deregulation.

“Airports face increased operational and capital costs as they respond to increased security requirements at the same time that their revenues are declining because of reductions in flights, reduced revenues from concessionaires, and fewer passengers.

“Communities that were struggling to maintain service levels are finding that challenge even more daunting as the fixed costs of initiating or maintaining a marginally justified service continue to rise.

“Airlines not already in bankruptcy or headed into bankruptcy have little to be optimistic about. As an industry, air carriers did not have time to recover after the September 11th attacks and the sluggish economy that we have experienced for the past three years has compounded an already difficult financial situation.

“Most carriers are not predicting meaningful growth in traffic or bookings for several months after the Iraq war is favorably concluded, and many are not anticipating a firming in the yields for more than a year. Clearly, this is an industry on the ropes.

“Aircraft manufacturers, for their part, are typically the first to feel the slowdown and the last to recover from it. Neither Boeing nor Airbus anticipates an upturn in the demand for aircraft until the middle of 2004 at the earliest.

“Airbus is struggling with the challenges of keeping the new A-380 within their revised cost and weight estimates, and Boeing is undertaking an aggressive new aircraft program with the 7E7 and is marshaling $10 billion to develop it. Clearly, both manufacturers are feeling the pressure of the industry downturn, but both are looking to the future.

“This brings us to the FAA. Administrator Blakey, you have now been at the FAA just long enough to start putting your imprint on that organization and shaping your vision of what you want that agency to achieve under your stewardship.

“I feel certain that you have begun turning the programs, budgets, policy and regulatory processes and directed the career personnel to your vision of where the agency should head to support a safe and efficient air transportation system.

“I know that this budget was largely completed before you became the Administrator, and I know that the budget constraints that we face make your job even more difficult. But I would like to explore with you where we are going to take the FAA in the next several years. The budget request for FAA operations anticipates 8.1% growth, but it seems to me to be a current services budget with few initiatives.

“That kind of growth to deliver the same services, I believe, will be hard to justify or secure in the current environment.

“I believe that it is important to show what the FAA is doing to foster a safe and efficient system as we move forward. We need to show how the FAA is responding to the evolving air transportation system. We need to show what works at the FAA.

“We need to know where we need to reinvigorate our efforts and we need to show where we can save and redirect resources to higher priorities.

“More importantly, we need to show how the FAA program is changing in the aftermath of the 9-11 terrorist attacks. I’m told that the agency’s O-E-P has not evolved since that time, and that troubles me.

“None of these things can be done if we sit passively by and expect that things will just work themselves out. It is imperative that the FAA – that our government – implement innovative and aggressive approaches to dealing with our rapidly changing world.

“I want to work with you to help make the FAA responsive to the needs of the public and the industry it regulates.”