A4A Oral Testimony of Nicholas E. Calio, president and CEO Before the U.S. Senate Subcommittee on Aviation

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 14%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	A4A Oral Testimony of Nicholas E. Calio, president and CEO Before the U.S. Senate Subcommittee on Aviation
	PubZone1 July 18, 2012 Sen. Cantwell, Sen. Thune and members of the Committee: I appreciate the opportunity to testify on behalf of Airlines for America, A4A, representing the largest passenger and cargo carriers in the United States. We have been invited to address “how to maintain U.S. leadership in the Aviation Sector” and “address critical competition issues facing the U.S. aviation industry.” For U.S. airlines, our position is a matter of regaining our leadership, not maintaining it. U.S. carriers have for years operated under a tax, regulatory and infrastructure environment that has made it increasingly difficult to make a profit and to compete globally. As detailed in our written statement, airlines are not allowed to act freely as a business on issues as other industries do. In the last 20 years, three or four federal commissions have all recognized the problems and made recommendations – virtually none of which have been acted upon in a comprehensive manner. This needs to change if U.S. airlines are to be a driver of the aviation value chain. Therefore, A4A is calling for the creation and implementation of a National Airline Policy – a policy on which the Committee should take a leadership role. The policy would have five core elements – the most significant of which are rationalizing the tax burden, reforming our regulatory structure and modernizing the infrastructure. It is critical that we act now. Aviation is a key driver of our economy. But while we have talked about the problems and failed to act, other governments in Asia, the Middle East and South America are treating their airlines as a strategic investment, successfully driving economic growth, jobs and opportunity. The results of this investment are startling. Currently, nine out of every 10 pending widebody orders were placed by our foreign airline competitors. Middle Eastern airlines alone have more widebody jets on order than exist in the entire U.S. passenger fleet. As you know, it is the widebody jets that fly the international routes. The impacts are significant. Foreign flag carriers are flying to major U.S. gateways in increasing numbers as a way to feed their growing, global aviation hubs. These increases have caused U.S. carriers to pull down capacity to some international markets – the most profitable part of the business – and a part of the business that subsidizes to a great degree our domestic routes, particularly service to smaller communities. The domino effect of these reductions in revenues from international routes on critical local service is significant. Jurisdictions across the United States understand very well that their local economies are hugely dependent on air service. Airlines enable local businesses to export goods, connect residents to the world for business and leisure travel and create good-paying jobs. We face the very real risk of U.S. airlines increasingly shifting to feeding foreign airlines at our gateways, rather than expanding their own flying of lucrative international routes. That would be a costly shift for our industry and our nation’s economy. That risk goes to the very heart of today’s hearing. The aerospace industry is extraordinarily synergistic. When airline profitability increases, airlines purchase more aircraft and supporting items and services. That ultimately benefits airframe and engine manufacturers, as well as innumerable other vendors, many of which are high-tech firms and small businesses. Our economy will continue to be increasingly global moving forward. Airlines will continue as the only mode of transportation that can efficiently move people and goods around the world. We can continue on our current path of ignoring the issues, or worse, exacerbating them, and put our industry at risk of withering. I offer one example not to follow and one to follow: The one not to follow is the U.S. maritime industry, which today carries just 2 percent of total world tonnage. On the other hand, in the 1970s, Congress made a strategic decision to provide the railroads with a normalized business environment that has allowed that industry to thrive. We are at the same kind of tipping point faced by the railroads, and a National Airline Policy is the way forward. We are committed to working with you to get it right. Before closing I want to thank the Senators for their help on EU ETS. Thank you. PubZone2	A4A is a leading source for key aviation information.