Congress Finally Gets Moving on a Bill to Reauthorize the FAA After Way Too Many Wasted Years

Government Regulation

I never thought we’d ever see the day come when Congress could actually agree on something, but sure enough, it appears to have happened. After more than 20 extensions of the old authorization which officially expired last decade, the Federal Aviation Administration (FAA) is on its way to being reauthorized by Congress. It’s about freakin’ time.

Pigs Fly, Hell Freezes, and Congress Reauthorizes the FAA

Congress is responsible for reauthorizing the FAA every few years. That reauthorization sets funding levels for a variety of projects and it sets priorities. So, when Congress can’t stop jerking around, the FAA sits and spins, waiting to do the work it needs to do until Congress lets it.

There have been a variety of hold-ups over the years, but a compromise has finally been reached. Yesterday, the Senate approved the bill that the House had already passed. You can read the entire mind-numbing 374-page bill on your own, but I thought I’d go over some highlights.

NextGen is Coming (Title II)
The biggest victory for absolutely everyone is a solid plan to finally implement “NextGen” air traffic control. There was even some acceleration of the program here. Without getting into details, NextGen will eventually replace the existing air traffic control system with something more modern. It will ultimately allow for more direct routings, fewer delays, and greater levels of safety.

On a related note, the redesign of the airspace surrounding New York City and Philly will also push through thanks to this bill. That means more efficient routings and fewer delays in the most delay-prone region in the US.

Minor Cuts to Essential Air Service (Title IV, Subtitle B, Section 421)
For those who have been closely following the Essential Air Service (EAS) program, there were some cuts there, but as usual, the cuts ended up being pretty minor and irrelevant to most. The new rule is that if an airport in the lower 48 states receiving EAS funding boards fewer than 10 people per day, it will lose funding UNLESS there is no other medium or large hub (defined by the FAA as having at least 0.25% of boardings in the US) within 175 miles.

Of the 109 airports in the Continental US that received EAS funding in 2010, 36 board fewer than 10 people each day. Pretty big chunk, right? Not so much. Only 9 of those are less than 175 miles from a medium or large hub airport, so the impact is minor. (Cities on the chopping block are Jonesboro, AR; Kingman, AZ; Merced, CA; Athens and Macon, GA; Hagerstown, MD; Bradford and Oil City/Franklin, PA; and Jackson, TN.)

More Perimeter Exemptions at Washington/National (Title IV, Subtitle A, Section 414)
One change that will appeal to DC travelers is the expansion of the perimeter rule exemption. As you might know, flying from Washington/National is limited to airports within 1,250 miles except for a handful of slot exemptions that can go further. This reauthorization will add 8 more roundtrip slots that can go beyond the perimeter.

Half of those must go to new entrants or “limited” incumbents who have very little service already. I assume we’ll see Alaska, JetBlue, Frontier, Southwest, and Spirit vie for those. For the other four roundtrips, the big guys can get the slots, but they can only get 1 roundtrip each and they have to convert an existing in-perimeter slot to use it. I’m quite interested to see how that might work. Maybe United wants to fly to San Francisco, but other than that, I imagine the airlines mostly want to use the slots to go to cities they already serve with existing perimeter exemptions.

Beyond the above changes, the airlines have to be really happy with this bill. They had several victories:

  • No increase in the $4.50 cap on Passenger Facility Charge (PFC) that airports can levy. Airports were looking for an increase to $7.50. Airport improvement funds also stay flat despite an effort by airports to see that increased.
  • No rules requiring inspections of foreign repair stations were mandated. Some groups were hoping to require inspection for safety reasons. The legality of that was questionable, and it would also likely reduce the attractiveness of outsourcing.
  • No restrictions on joint ventures or alliances. Some were pushing for expiration of immunity with periodic reviews required to maintain it.
  • The 3 hour tarmac delay rule was not put into law but will just remain a DOT regulation (which is easier to get changed). It is, however, now required that emergency contingency plans are filed for dealing with these types of problems, however. That’s a good thing.
  • In a nod to the fight over unionization, this bill requires unions to get 50 percent of potential members to sign a card for election, up from 35 percent. This is at best a very minor victory for airlines, but I honestly don’t think it matters much at all.

Beyond that, there are a bunch of odds and ends in the bill. Things like banning pilots from using personal wireless devices in the cockpit and regulating the carriage of musical instruments show just how deep into the weeds this can get.

As usual, the bill also puts out requirements to study a lot of different things. No action required, but just studying. This includes a study on alternate ways to charge for PFCs outside the ticket price, a study of air quality in aircraft cabins (long overdue, if you ask many flight attendants), a study of the tarmac delay rule, a study of cell phone use on airplanes, and a study looking to increase intermodal travel. I imagine most of these studies will lead absolutely nowhere.

In the end, this is long overdue, and it will help get a lot of important work moving, in particular that relating to NextGen air traffic control.

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31 comments on “Congress Finally Gets Moving on a Bill to Reauthorize the FAA After Way Too Many Wasted Years

  1. Cranky, any idea on concrete timeframes surrounding each of these issues, specifically, when can the new flights beyond the perimeter start to fly (and/or when will the bidding for these routes take place), and when can we expect to see a NextGen ATC system in place? A decade from now? Longer?

    1. I just read that part of the bill along with the musical instrument section (I’m a trombone player, and as may also be apparent, I have no life). As an aside, I guess “United Breaks Guitars” had some impact, but I digress …

      If I’ve read the bill correctly (and I believe I have), the current carriers’ (i.e. United, American, Delta, and US Airways) new slots are to be made available by the Secretary of Transportation upon enactment. The Secretary must assign the new carrier slots within 90 days of enactment.

    2. I don’t remember all the specific timelines for NextGen, but there are some benchmarks set if you scroll through the bill. Some parts were being accelerated to 2015, I believe.

  2. Just because Congress agrees to something a baby born today could die of old age before we see anything really done.

    As far as EAS goes I wonder what all taxpayers would say if they knew they were paying to have 10 people or less fly out of some airports all these years. Setting a mileage limit should have included a mileage/drive time number. Two airports could be 90 miles apart but there could be a mountain in between and you have to drive 4 hours each way to drive around it.

  3. any info on when the DCA outside the perimeter slot applications will be due? these are new slots, right? any handicapping on who gets what yet?

    personally, i would like to see UA to get some SFO service and alaska to get addtl LAX service. does WN even know what they want to do at DCA? my guess is no since they haven’t even announced any service to MDW yet!

    B6 and spirit are the potential wildcards IMO. would B6 be willing to potentially cannibalize any of its IAD x-con service by requesting SFO, OAK or LAX nonstops from DCA? will spirit go way outside the box? how about SJU? actually, how about B6 to SJU?!

    1. If I?ve read the bill correctly (and I believe I have), the current carriers? (i.e. United, American, Delta, and US Airways) new slots are to be made available by the Secretary of Transportation upon enactment. The Secretary must assign the new carrier slots within 90 days of enactment.

      The incumbents must give up a current slot to a “major hub airport” within the perimeter to use their new beyond perimeter exemption. They can also go where they want or change the destination if needed. The other slots apparently are new. It will be interesting to see who applies and where they wish to fly.

      1. interesting, so there are only four new slots at DCA as a result of this and the other four are really just perimeter exemptions that the Big Four can use if they “trade in” an existing flight to one of their hubs.

        i wonder what happens if one of the incumbents doesn’t want to trade in one of their hub flights for a perimeter exemption, how would that exemption be reallocated? in fact, i’ll look at each incumbent, in order of most likely to least likely IMO:

        – UA – sacrificing an ORD flight to get a DCA-SFO monopoly run would be a gold mine. of course, they could always throw in another DEN flight but that would seem crazy given the other option. my guess – SFO

        – DL – cutting one of their thousand daily flights to ATL seems feasible but where do they want to send it? obviously, they have an SLC hub that could probably use another flight. i am sure they would love to do DCA-LAX but that is already flown by their pal Alaska. is that enough to keep them out? my guess – SLC

        – AA – they could probably sacrifice either a DFW or ORD flight, probably DFW? this is a similar scenario to DL except they do not have existing outside the perimeter service they could expand. LAX would obviously make a lot of sense for AA but alaska is also their good buddy. again, is that enough to keep them out? my guess – LAX

        -US – as the largest airline (and getting larger) at DCA, US could go anywhere with this flight because they are not as reliant on flying to another one of their hubs as the other three airlines. but are there really any cities that aren’t already served that would be interesting? if not, do they really want another flight to a low-yield leisure city like PHX or LAS badly enough to sacrifice one of their CLT flights? even though they are drastically reducing their overall footprint in sin city, they already have 3x to PHX (only one to LAS). my guess – LAS

        1. I wouldn’t be surprised if any airline went to SFO. The DCA slots are valuable as point to point service, not so much connections (since you can connect at ORD/DTW/CLT/whatever within the perimeter) so I could see any airline with at least a token presence at SFO wanting to fly there.
          US or UA could also compete with Alaska on LAX, since they don’t have agreements with AS, and LAX is a big enough market and they both have some presence there. Now the interesting question is what would Southwest do with the slots if it won them…

          1. oh i agree, i wasn’t thinking of flying to hubs for connections. i was thinking of how to maximize O&D traffic on both sides. e.g., SFO-DCA would do better on UA than US because of UA’s dominance at SFO.

            at any rate, i wonder how DOT will prevent having multiple airlines (or all four!) applying for service at one station. as you said, SFO and LAX would seem to be the best available options.

      1. I do not believe West coast from DCA is physically possible with any kind of decent payload. The runway is too short. I wonder however (if we had a “DCA range contest”), whether A319, 737-700 or 757-200 will have best takeoff performance from DCA’s short runway with 100% load factor.

        1. Alaska flies 737s every day from DCA to LA and Seattle, so it’s certainly not an issue. My guess is that the Airbuses would have trouble, so you won’t see JetBlue looking to go transcon, (but I wouldn’t be surprised at all to see them go for San Juan).

          1. @Bill and Cranky, I doubt SJU will happen as there’s no Congressional representation. It’s a price sensitive market with many connections available. If it does happen of course B6 would be the one to do it, probably with just a E190.

            DC has 1 daily United from IAD and 2 daily AirTran from BWI. Most of the Hispanic population is on the Maryland side of DC. US, DL, AA simply connect everyone over ATL, CLT, and MIA.

          2. @sanjeev – its more like 1.5 flights per day to SJU; the FL service from BWI is once daily on some days and twice daily the others. not that long ago, AA flew SJU 2x to IAD and 1x to BWI so the market is down roughly 50% capacity (as FL had wknd only service before AA’s pullout). i also like SJU for DCA because there are so few “island” options available to this airport because most of the islands are non-US and DCA requires pre-clearance (which only exists at BDA and NAS IIRC). SJU, obviously, would not require pre-clearance.

            by way of comparison, PHL has 3x on US, BOS has 3x on B6, even relatively small BDL has 2x (AA, B6) service. the DC metro area, with three airports and a much larger population than any of these cities, seems like it should have at least 3x if not 4x to SJU, spread among the three airports.

            that being said, the perimeter exemption slots are probably more useful and lucrative for other destinations, specifically ones that can be lobbied for by members of congress.

      2. Hey guys,

        The thread has been full of speculation on where the slots will go. Destinations being floated include AUS, SAT, ABQ, SAN, LGB, SFO, LAX, PDX, SEA, SLC, COS and possibly YYC.

        Surprisingly LAS is not interesting to many airlines. US has 3 daily but probably doesn’t want any more.

        You guys covered most of the usual suspects with UA to SFO being the gold mine. The big question in my mind is what AS, US, and WN will do. This should be fun. I see someone on DCA-SAN immediately with a redeye. I also see DCA-AUS and WN jumping in on DCA-DEN. Of course DCA-LAX will be picked up, but is it UA, US, AA, DL, WN, or B6?

        1. Completely forgot to include VX in any of this discussion. VX needs SFO and would love LAX as well. After getting shut out of EWR, DCA needs to happen for VX.

          Also, do you think VX or B6 might go for the techie traffic at AUS? I’m surprised VX hasn’t launched AUS get, but I can see them doing DCA-AUS and continuing to LAX/SFO.

          1. thanks sanjeev – i haven’t ventured to that thread yet but, when i was doing my analysis, i found US has 3x to PHX but only once daily to LAS. perhaps the handful of dates i searched were oddballs but that would be pretty unlikely.

            some of the choices on that thread seem a little wacky… colorado springs? calgary? albuquerque? IMO these exemptions are few and far between and thus very valuable. i can’t imagine any airline would consider applying for a route for which they could not fill up the seats on a A320/321, 757 or 737-800/900 (generally largest planes into DCA).

          2. Bill, you’re right :) I mixed up PHX with LAS. PHX is 3 daily and LAS is the 1 daily redeye.

            Yeah I agree that some of the choices on that thread are wacky. People are justifying ABQ, COS, and even SMF with government business. YYC was purely for WestJet connections and maybe oil lobbies. I doubt those will happen. SAT may work only for WN.

            AUS and SAN have good government traffic and regular public demand combined. SFO, LAX are goldmines. People are saying that PDX is a winner, but I don’t know. There’s already 2 daily SEA on AS and 4 daily DEN on F9/UA.

            This is what I see happening with 8 slots
            1. UA to SFO 100% sure (give up one ORD)
            2. AA to LAX 90% sure (give up one JFK/DFW)
            3. DL to LAX or SLC second daily, or some oddball point to point route. DL has more than enough in-perimeter hubs for connections. I see them being adventurous. (give up one Florida)
            4. US will wait to see what others do, and pick some monopoly. My guess is SAN. I hope its not a 4th daily PHX.
            5. AS to PDX, monopoly, demand, Oregon congressman pushing it
            6. VX to SFO
            7. B6 or WN to AUS/SAT (depending how much Congress loves WN)
            8. Either B6 to LGB or NK to LAS

            F9 will get nothing. Already 3x DEN.

            This is assuming we’re not going to see any international flying on these slots.

            Also, you know how the fares are at DCA. West coast with a connection are just as cheap as BWI, but midcons and short hauls are expensive thanks to our friends at US.

          3. sanjeev – looks like we’re on the same page for the most part. i still say US might consider another LAS flight b/c that sucker is ALWAYS packed and always expensive (at least when i check it is)!

            i am not sure VX would open a station for one daily flight to SFO?

            i agree that AS will do PDX as it fits nicely into their route structure and there is very little service from PDX to any DC airport.

            could an airline run flights to SJU with the perimeter exception? PR is very underserved in the DC area, especially with AA’s SJU retraction (two or three dailies from BWI and IAD were never really replaced in this market). that could make a lot of sense to B6, especially with their buildup in SJU.

  4. I guess even this Congress can get something done. I’m shocked. I guess pigs do fly and hell has frozen over.

    By the way, the first time I heard the phrase “hell freezes over” was during a UN debate at the time of the Cuban Missle Crisis. The US Ambasador to the UN, Adlai Stephenson, used the term after he’d asked a question of the Soviet (i.e. Russian) Ambasador. After a rather long pause, Stephenson said he was willing to wait until hell freezes over for a response.

  5. How come the perimeter rule wasn’t wavered for LGA in the same way it was done for DCA? It would be nice not needing to go to EWR or JFK for transcan flights.

  6. Cranky, a job well done.

    As you point out, something in the reauthorization act for everyone. Didn’t think I’d find “violin” or “guitar” in there, but there it is. When I came upon “air-rail code sharing” I shuttered, but the intent with the provision looks good.

    Lots of work for GAO, the Secretary, and the IG for this and that report. But, I really do look forward to the one mandating a report for Congress listing “…obsolete, redundant, or otherwise unnecessary reports..”

    And for me personally, I really did underestimate the sway of Sen. Rockefeller to get a good EAS provision so I can keep flying that 9-passenger Cape Air Cessna from BWI to my old home, Lancaster, Pa., at least up to Sept. 30, 2015, at which time I’ll probably be too feeble to climb up the steps into the plane. I hope the fare stays at $49 each way, with a subsidy to Cape Air of, I believe, $465 each flight.

    I’m not going to hide the subsidy amount, but how much does it cost to add a lane of highway, or repair another obsolete bridge across the Susquehanna? Something makes me the think the local, very conservative, Republican congressman for that area won’t be using me stepping off the airplane there anytime soon to show that he’s cutting big government. But, hey, just an out-of-towner trying to boost the local ecomomy!

  7. ? And how many bodies does the FAA employ (with benefits and intact pensions) to intrepret and implement the 374-page bill? If The Congress relied on professional advise, rather than political pressure, ‘ear-marks’ and other special interest provisions, this bill would be a third its size and would have been passes years ago. And, the FAA would require abouot half as many ‘experts’ to intrepret and implement the damn thing! While the FAA’s management and rule writers are not the world’s best, they do know a lot more about safe flying than do the Congressional ‘experts.’ The 374 page bill is not perfect, but at least the excessive FAA staff can now get back to their intended purpose. Grr.

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