Airline CEOs are gathering in Washington today to have a little sit down with the President of the US. This is one in a series of meetings that Trump is arranging with business leaders, and the focus is apparently supposed to be on job creation. Still, the airlines haven’t been happy with the way government has treated them over the last 8 years, and they’re bound to have a laundry list of hopes and dreams for Trump to… likely ignore. That won’t stop them from trying. Here are some of the issues that I expect will be at the top of the list.
After years of stalling, the feds finally approved Norwegian’s Irish subsidiary to be able to fly to the US. The Open Skies agreement between the US and the European Union says that’s exactly what should have happened, but labor in particular is not fond of this plan and continues to hope that the Trump Administration will overturn the approval. Why? Well, they say Norwegian will have foreign workers operate the flights for less money and without the protection of US labor standards. This should be right up Trump’s alley since it’s a jobs issue, and this will kill good American jobs! Or will it?
Trump’s press secretary was asked about this, and the response makes it seem unlikely that there will be any reversal here. He specifically mentioned the number of US-based (not low-paying foreign) jobs involved with Norwegian, not to mention all the jobs created to build the airline’s all-Boeing fleet. The airlines might want this to happen, but it’s not likely.
Block the Middle East Carriers
We all know that the big 3 US carriers are concerned about the continued, subsidized growth of the Middle East big 3 airlines (Emirates, Etihad, and Qatar). Emirates fanned the flames recently by announcing a flight from Newark to Athens that’s not going to make money on its own. The growth of Middle East airlines, especially in fifth freedom markets that aren’t nonstop to their home markets, appears to be high on the list of things the airlines want stopped, but will it happen?
Just thinking about all the Boeing airplanes on order at those airlines… it’s going to be hard for the administration to do something that would hurt that relationship. Airplane orders = jobs. Plus, not all the US airlines are on the same page. FedEx relies on its ability to hub in the Middle East for cargo, and it’s afraid that will go away in a fight. Further, JetBlue and Alaska/Virgin America love feeding these guys and don’t want to see them blocked from growing.
On the other hand, if the big 3 can swing a narrative that US jobs are at risk, then Trump could be swayed. I just don’t know if it’ll be enough of a threat for him to bother. It will undoubtedly be easier to ignore this spat.
The airport funding system in the US effectively requires that the users of airports pay for improvements. That may explain why some of the big airports in the US have a pretty poor passenger experience. (Just ask the President, who likened LaGuardia to something that should be in a third-world country.) It’s difficult and expensive to fix, and it’s hard to do something that will put financial pressure on the airlines and travelers.
In theory, I’d imagine Trump could goad Congress to allocate a bunch of federal dollars to pour into big airports in order to improve the experience without hitting the airports’ rates and charges. I don’t know anything about the various mechanisms that might be involved, but you’d imagine it would be a slog to get through. Would he bother trying? It seems like a stretch considering how much spending he’s committing to other gigantic projects like building that wall (since the Mexicans aren’t paying for it). This would create good construction jobs, and he’s clearly in favor of that. It would fit nicely as a piece of the infrastructure push he promised to make, but it’s unclear what types of projects will float to the top of that effort.
Fix Air Traffic Control
Attempts to modernize the air traffic control system have been around forever, and they almost succeeded in the last Federal Aviation Administration (FAA) re-authorization go-around. In the end, nothing happened, and Congress just kicked the can down the road. The problem is that there is no consensus on what to do. American and United (along with the industry lobbying group A4A) think that air traffic control should be put into a non-profit corporation to give it more independence. Delta says the current structure is fine as it is.
This isn’t really a jobs issue, so I imagine it’s going to be a tough sell. But when it comes time to re-authorize the FAA again, maybe it will finally happen.
Don’t Kill Travel
Though there are plenty of things the airlines may want Trump to do, there are other things the airlines want Trump to avoid doing. Killing travel, for example, would be at the top of that list. The uncertainty around who can enter the country and when is something that has the real potential to stop visitors from wanting to come here. I was surprised when one of our Cranky Concierge clients canceled a trip to the US because he didn’t like to visit “politically unstable” countries. This is the kind of perception that is the worst possible outcome for the US. Travel creates a tremendous number of jobs and is vitally important. The airlines are likely to ask the President to simply “do no harm.”
I do expect that to fall on deaf ears. Trump made a lot of promises during the campaign, and some of those are going to hurt air travel (among other things) if implemented. The airlines are smart to ask, and having the President’s ear this early in his term is a nice, positive sign. But I wouldn’t get my hopes up if I were them.