ATA Remarks by President and CEO Jim May at the 55th Annual Air Traffic Control Association Conference on Aviation Priorities

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

	ATA Remarks by President and CEO Jim May at the 55th Annual Air Traffic Control Association Conference on Aviation Priorities
	PubZone1 Oct. 25, 2010 Good morning. It is my great pleasure to be here with you today. And thank you for the kind introduction. Rumor has it that there is an election next week. The results of that election will be in a week from tomorrow … talking heads are in nirvana as the rest of us must grin and bear it. Most predict, and I agree that House of Representatives will change hands; Republicans will assume new committee leadership roles and the House Transportation and Infrastructure Committee will elect a new Speaker, presumably Congressman John Mica, who likely will not have the same priorities as President Obama. We also could see changes on the Appropriations and Homeland Security committees as well. Regardless, one message is loud and clear: People want less government, less taxes. Why does that matter to U.S. domestic and international aviation? I hope that a new Congress will make a fresh start on FAA reauthorization, after two and a half years and 16 extensions, it’s time to get very serious. We must have legislation that: maintains and even improves our remarkable safety record fosters rather than hinders U.S. aviation competitiveness, realizing that we are a global industry; finally accelerates implementation of NextGen, and holds the FAA more accountable for delivering benefits now, not in 2020 I am also hopeful that Congress will stop micromanaging FAA and let FAA do its job … as I’ll discuss more in a moment, the only way to maintain our strong safety record is for all aviation stakeholders (ATC professionals, FAA, airlines, labor, airports, manufacturers and others) to move forward collaboratively as partners, rather than as enemies where punishment is the first tool used by regulators to act based on data, science and operational experience to ensure that FARs are harmonized with international regulations and to encourage enlightened leadership and an inspired, well-qualified work force I am cautiously optimistic that Congress will facilitate U.S. aviation competitiveness and not impede Department of Transportation efforts to level the playing field for U.S. and non-U.S. airlines. Although, as you will hear from me later, we are both encouraged by and concerned about some of the Department’s actions, we are hopeful that Congress will not act in ways that make our efforts to compete and operate around the globe more difficult. In other words, despite what happens next Tuesday, let “us” not regulate or legislate too quickly or without all the facts or based on emotion; that is not good for passengers, shippers, the economy, airlines and any of you here today; that is no way to run a business, an industry or a country. Before talking about airline priorities and problems, (I guess the politically correct term is “challenges” vs. problems, believe me, there are very real problems), I will set the stage. Let me start by bragging about just how vital our industry is to the U.S. and world economies (I urge you to do the same); we all should be proud. U.S. commercial aviation drives $1.2 trillion a year in economic activity. That is extraordinary. That’s $371 billion in personal earnings and close to 11 million jobs. U.S. commercial aviation also contributes $732 billion a year to U.S. GDP – that’s about a 5.2 percent share. the Pulitzer Prize Winner Daniel Yergin may have said it best: Every day, the airline industry propels the economic takeoff of our nation. It is the great enabler, knitting together all corners of the country, facilitating the movement of people and goods that is the backbone of economic growth. It also firmly embeds us in that awesome process of globalization that is defining the 21^st century. Now, to be clear, many millions of jobs in the United States and abroad depend on a vital, sustainable aviation industry; and so we are all in this together, particularly in today’s tough economy. Jobs are the administration’s top priority for a good reason, and this industry is all about jobs. Lately the news has been good: Last week’s headlines told us that U.S. airlines are seeing some relief…finally…from $58 billion in losses over the last nine years. Wall Street Journal headline: U.S. Airline Profits Take Off. Reuters headline: U.S. Airlines Make Profit on Strong Travel Demand. We saw a net profit of almost one billion dollars for the first half of 2010 (but let us note that is only a 1.1 percent profit margin), with third-quarter profits looking promising. Analysts are predicting a strong finish with between three and four billion in net income for this industry. By and large, stocks are recovering and passenger revenue rose 19 percent in September 2010 compared to a year earlier – that is the ninth consecutive month of revenue growth. Cargo traffic has surged in international markets across all regions. And why are we able to slowly dig out of a very deep financial hole? The answer is SELF HELP. U.S. airlines have gotten very good at capacity management We right-sized fleets by parking over 1000 less fuel-efficient aircraft We focused on high-yield business and overseas travel We are surviving a decade of extremely painful losses and hard lessons We’ve seen some consolidations that will be, I predict, very good for airlines and their passengers and shippers. For example: US Airways/America West Delta/Northwest Republic/Shuttle America/Frontier/Midwest United/Continental SkyWest/ASA/Express Jet And lately, Southwest/AirTran (proposed) And the price of oil, that just about killed us in 2008, peaking at $140 a barrel, now is trading at roughly $80 a barrel. That’s still more than twice what is was at beginning of 2009 and more than it should be based on supply-and-demand fundamentals…but it is a heck of a lot better than $140a barrel. As with life, however, with the good comes the bad: We are still recovering from a devastating financial meltdown that impacted the entire world in many ways, including the demand for air travel. Analysts predict double-digit traffic growth in Asia, for example, where the recovery is much stronger than in North America Plus U.S. airlines operate in an extremely competitive domestic markets and face stiff, well-funded competition from our competitors in international markets From that huge downturn in 2008 to today, IATA reports that world airline revenues dropped by $81 billion, resulting in losses of almost $10 billion in 2009 alone. So even though things are looking better in 2010, they are a long way from good It will take years of sustained earnings to repair our balance sheets Despite strong financial reform legislation in the United States and abroad, oil prices continue to fluctuate; we will have to wait to see if the CFTC and its companion regulatory agencies around the world are able to develop and implement meaningful regulatory requirements to muzzle excessive, almost mind-numbing speculation by those who never intended to use the product but just buy-and-sell to churn oil prices and profits. Despite all of the hard work and best intentions of regulators, increasing or wildly volatile fuel prices will continue to dog the industry. As you all know, jet fuel and labor are our top two expenses; rising, rollercoaster prices jeopardize our future and are not just an academic “challenge.” And, of course, the industry continues to be bludgeoned by: Increasing taxes, as governments around the world look to airlines and their passengers to address social problems and fund the general treasuries…I am not certain why this is our problem…but we are easy target We are under the constant threat of emissions taxes (in the United States and abroad) that will hit our bottom line hard and constrain our growth…this is not an effective way to encourage us to get even greener and invest in new technologies “Surprises” like volcanic eruptions that shut down airspace for days, and pandemics that gut travel demand Let me say a few words about our remarkable environmental accomplishments and strong commitment to even further improvements…and why punitive taxes are NOT the answer. U.S. airlines have improved their fuel efficiency by 110 percent from 1978 to 2009, resulting in nearly 3 billion metric tons of CO₂ savings…roughly equivalent to taking 19 million cars off the road in each of those years. And in 2009, we reduced greenhouse gas emissions by 14 percent compared to the beginning of the decade while moving 7 percent more passengers and cargo; no other industry can match that record. We do not need anyone to hit us over the head to reduce our emissions further. Fuel is one of our two largest costs, so we have every incentive to reduce fuel burn and that reduces our emissions. We’ve already agreed to do much more, on an international basis under ICAO and in concert with the world’s airlines. Three-Step Program 1.5 percent average annual fuel-efficiency improvement Carbon-neutral growth from 2020, subject to critical infrastructure improvements (including the much talked about NextGen) and technological advances And an aspirational goal to reduce emissions by 50 percent by 2050, relative to 2005 baseline ICAO has been quite focused on global efforts to reduce aviation emissions for decades and, let me be very clear here, ICAO is the only effective forum to address aviation emissions because ours is a global industry. The unilateral imposition of so-called emissions taxes and fees on U.S. airlines by other countries is not only illegal; this drain on resources hurts our ability to buy new, more fuel-efficient aircraft and green technologies, invest in alternatives to jet fuel that burn cleaner with less CO₂ emissions, which is a huge focus for airlines and their partners, and invest in valuable research and development. We are committed; we are invested; and we are getting greener every day. We do not need new taxes. The stage is set, so let me turn to your world – Communications, Navigation and Surveillance – and what we see for the future It is clear that today we are experiencing the largest transformation in a generation: Safety Financial Technological To prepare for that transformation, let me repeat the four “must haves” that I mentioned a little bit earlier: Collaboration Regulations based on science, data and operational experience Increase international harmonization Enlightened leadership and inspired professionals Without those, we will simply not remain the world’s “gold standard” in safety; the model for other nations and really for other industries like health care that emulate our safety-management systems and efficiency programs to drive down their own hospital errors, employee injuries and costs. Let’s start with collaboration Unfortunately, over the past few years we seem to be moving away from collaboration and communication with the FAA, and toward confrontation and punishment. Tragically, and I predict to the detriment of our safety culture, decades of mutual respect and open dialogue are being replaced by mistrust and closed doors. Our experience tells us that all stakeholders must have a seat at the table from the get-go – not after the fact – to ensure the best result. Regulators, operators, controllers, manufacturers and other stakeholders must work collaboratively, with a laser focus on improving safety. A lesson to remember: We should look to how much better our collective approach is now that a number of labor issues have been resolved; the benefits are unmistakable and growing every day. Finally, I would be remiss to leave collaboration without talking about NextGen: We should not fool ourselves into thinking that the current game plan is solid – it is not. I know it is a terribly complex transition involving billions of moving pieces and critical safety concerns. However, for more than two decades, we have all been talking about the need to move from our antiquated, radar-based system to a much more efficient, satellite-based system with significant safety, operational and environmental benefits. Unfortunately, even though many professionals have spent many hours on many time-consuming industry/government efforts, I believe that progress has been slower than hoped Although perhaps, being gracious, we are all somehow at fault for the delay. I think that it is time for us to get moving before it’s too late…the U.S. economy depends on it The FAA just-released Cost of Delay report tells us that domestic flight delays in 2007 cost the U.S. economy $32.9 billion, with almost half the costs borne by passengers and over $8 billion in costs to the airlines through increased expenses for fuel, crew and maintenance; and this latest report just confirms past reports: flight delays are hurting the economy and our competitiveness, and that means lost jobs. So where do we go from here: I am hopeful that the newly formed NextGen Advisory Council – the NAC – chaired by Dave Barger, will help focus other collaborative industry/government efforts and bring new life to NextGen. That would greatly improve the odds that this nation will see the many benefits before 2018 or 2020…we need them now. Frankly, in addition to FAA commitment to construct the ground and air infrastructure, and develop and implement procedures and training, the only way to see some of those benefits now is for aircraft to be equipped with the necessary technologies and capabilities. That is the only way to accelerate the many benefits from ADS-B-out and, in the future, ADS-B-in. As noted in the DOT Inspector General report released last week on the risks FAA faces with ADS-B implementation, one of the greatest risks mentioned is that operators will not buy and install the new equipment because the FAA requirements are not yet fully defined and “promised” benefits are hazy…certainly not clear enough to justify the billions in additional costs. This quote in the IG report says it all: Until FAA effectively addresses these uncertainties associated with equipage and requirements for ADS-B’s advanced capabilities, progress with ADS-B will be limited, and the potential for cost increases, delays and performance shortfalls will continue. I could not agree more. The airlines have already, and are willing to continue, investing in this air infrastructure, but the business case is missing unless and until the FAA can be accountable for real, measurable benefits such as reduced separation standards; we’ve seen gaps where airlines have equipped, for example, to be ready to use RNAV/RNP procedures, but the deliverables from others aren’t there. Rather, these are overlays of existing procedures. My message here today: Everyone has a role to play and everyone must be accountable. And to close the loop, undoubtedly NextGen will benefit the entire nation but it is terribly expensive and the airlines are being asked to bear the costs up front; assistance for aircraft equipage from the federal government in this instance is not only appropriate; it is essential. Let’s turn to the need for regulation that is based on science, data and operational experience: The pending Flight and Duty Time Notice of Proposed Rulemaking is a telling example of how NOT to regulate based on science, data and operational experience. I know this is harsh, but the FAA unfortunately veered away from the Aviation Rulemaking Committee (ARC) recommendations and proposed a rule that, in some critical areas, is not based on facts, science or decades of operational experience. We are all about safety, and everyone in this room knows that, and agrees that “safety first” is the only road; but in some aspects, this proposal seems to be more about change for the sake of change than change for the sake of safety. Although we agree with the core concepts, some of the underlying requirements have no foundation and result in huge operational and financial consequences for airlines and their pilots. And there’s another painful and perhaps unintended consequence: U.S. airlines will face schedule and operational disruptions and spend billions to comply with these unnecessary requirements but they will not cost our competitor a single dime because our competitors will not, let me remind you, be subject to the new requirements. Today, 54 percent of all U.S. international traffic is carried on non-U.S. airlines. So if “our” schedule integrity is compromised, passengers will fly, businesses will continue to ship goods, on non-U.S. airlines, resulting in significant revenue losses for decades to come. I urge the FAA to take a hard look at its proposal, allow operators sufficient time to analyze and prepare meaningful comments on the impacts of the proposal, and issue a new proposal that is based fully on science, data, and operational experience. We must also ensure international harmonization of safety standards Really, this is a no-brainer; without harmonization, the overall system will remain inefficient, costly and unable to realize its full potential. To mention only a few, the United States must work with its foreign partners to ensure: Alignment of SESAR and NextGen Technical equipment requirements for ADS-B and; Pilot licensing requirements Operational procedures when system disruptions occur; take, for example, the Icelandic volcanic eruptions that cost the industry billions of dollars due to arguably unnecessary shutdowns of air space…We must work with other nations to ensure consistency of requirements, always putting safety first. Finally, we need enlightened leadership and other aviation professionals to lead us into the future. We want the U.S. to remain the safest aviation system in the world. And we all understand and recognize the need for a competitive, energized, viable U.S. airline industry that meets the needs of passengers and shippers and is able to compete effectively in the global marketplace. That’s what it will take to get to NextGen sooner rather than later, to retain and create jobs, and to buy and implement the many fine technologies that those of you in this room today want to sell us. Enlightened and pragmatic leaders, combined with well-qualified and inspired aviation professionals, are absolutely critical. When you leave here today, I urge all of you to take a personal interest in, and to make a personal investment in, the future of aviation by: Thanking those, like Neil Planzer, for taking leadership roles; it’s hard, time-consuming and often frustrating I want you to tell others about the vital role of aviation in the nation’s economy And I want you to encourage young people to become “aviation” junkies like all of us…to be inspired by what a career in aviation has to offer Also, let me take a moment to thank the Department of Transportation, and to ask for their continued leadership and vision. In 2009, Sec. LaHood convened a Future of Aviation Advisory Committee to make recommendations on how to build and maintain a viable, competitive, safe and sustainable aviation industry. Leaders from labor, airports, airlines, finance and academia are working hard on meaningful recommendations for DOT action to be presented this December. We appreciate the Secretary’s leadership and look forward to the final FAAC report and follow-on from the Department. We also appreciate the Department’s longstanding push for Open Skies Agreements (we know there are 99 in place today) and other opportunities for U.S. airlines to expand service; we are hopeful that agreements in key markets such as Brazil, China and Hong Kong are within reach. Since Congress has not seen fit to eliminate arcane foreign ownership and control restrictions that tie our hands from being true global businesses, we must rely on increased access to markets and permissible business arrangements, including alliances and joint ventures. That is why we are concerned by the Department’s actions that unduly constrain these arrangements and differ significantly from past Department policies. For example, in a proposed alliance and joint-venture application for Delta and Virgin, the Department has tentatively decided to deny antitrust immunity. This is a first-ever denial of antitrust immunity between a U.S. carrier and a foreign Open Skies partner. Antitrust immunity is vital to U.S. carriers and their ability to grow internationally; carriers must have consistency and certainty in the application of DOT policy to develop their business plans and investments. Now, on an entirely different matter, we support many of the Department’s consumer-protection proposals in the current and prior rulemakings, and we are committed to full transparency regarding fares, fees and codeshares. However, we do not support proposals that will have unintended adverse consequences for passengers and disadvantage airlines as to their competitors. The three-hour tarmac delay rule is an example of a perhaps well-intended approach that will inconvenience passengers. Although the data is incomplete, at this time there is no question that return-to-gates and cancellations will increase as airlines are forced to make tough choices to avoid the $27,500 per passenger penalty for delays. We’ve been blessed by reasonably good weather since the rule was implemented…but passengers will not be pleased when huge numbers of flights are cancelled in severe storms or blizzards that jam up operations across the country. As I said in the beginning, despite what happens in next Tuesday’s elections, let “us” not regulate or legislate too quickly or without all of the facts or based on emotion; that is not good for passengers; that is not good for shippers, nor the economy, airlines and any of you here today, and it certainly is no way to run an industry or a country. We all need to work together and to do a better job educating all members of Congress and their staffs about the value of a strong aviation industry to the U.S. economy and, particularly during these tough financial times, our ability to drive job growth. And to drive jobs, we need a new Congress who agrees with us on the simple principle of DO NO HARM…to allow us to compete in the global marketplace, so we can regain financial stability. As I said earlier, the encouraging financial results means we’re in a slightly better place than before…it does NOT mean we’re in good shape. So let’s close with a call for: No new taxes, including no increase in PFCs; airports are aggressively pushing a $2.50 per passenger increase that would cost passengers $2 billion more each year. No changes to current government policies on granting of antitrust immunity or roll back of existing grants; essential for U.S. airlines to be able to compete globally. No constraints on our ability to use certified foreign repair stations; obviously data indicates that these are just as safe as repair stations here. No required rulemakings or mandates that are driven by anything other than science, data and operational experience. No barriers to all the stakeholders pushing forward with NextGen implementation as quickly and smartly as possible; federal government support for aircraft equipage and FAA accountability on the delivery of benefits is essential. Thank you for letting me share my thoughts with you today. PubZone2	A4A is a leading source for key aviation information.