WashingtonWire - 2004-02-09

DOT: Air Travel Capacity To Triple By 2024

The U.S. Department of Transportation is pledging to triple air travel capacity by 2024 while decreasing congestion in the U.S. aviation system, using such technologies as global positioning satellite navigation. DOT Secretary Norman Mineta on Jan. 27 said the Next Generation Air Transportation System would help avoid the kind of intense congestion experienced at Chicago O'Hare International Airport, where American and United airlines last month agreed to cut flights by 5 percent at peak travel times to reduce delays.

"We will harness technology in a way that triples the capacity of our aviation system over the next 15 to 20 years," Mineta said in a speech to the Aero Club of Washington. "Chicago is a warning, but O'Hare is not the only place where we see congestion nearing the tipping point. And unless we expand system capacity, it is almost certain that we will find ourselves facing more and more O'Hares as our economy continues to grow and as new technology and competition brings even greater demand." Mineta has appointed a policy committee comprised of officials at DOT, NASA and the departments of Commerce, Homeland Security, and Defense. In the near term, the Federal Aviation Administration is building new air traffic control towers and installing advance radar systems at a dozen airports.

Congress Cuts Funds For Travel Promotion

Congress cut by 80 percent funding for efforts to promote U.S. tourism after the 2001 terror attacks in a final budget deal passed on Jan. 22. The U.S. Department of Commerce will cut remaining funds by about half, according to the Travel Business Roundtable. That leaves about $5 million to fund a 15-member U.S. Travel and Tourism Promotion Board charged with boosting U.S. marketshare of the international travel market in the fiscal year that began on Oct. 1, 2003. The United States is the third most-visited destination behind France and Spain, although overseas visitors to the United States have declined since Sept. 11, 2001.

Feds Seek Veto Of Airline Pension Relief

U.S. Department of Labor Secretary Elaine Chao urged President Bush to veto a Senate bill that would let struggling air carriers defer more than $5 billion in payments to shore up their pension plans, currently under-funded by $22 billion. The Senate included the measure for airlines in a larger pension reform bill it passed by a veto-proof majority of 86-9 on Jan. 28. Chao, U.S. Department of Commerce Secretary Don Evans and U.S. Treasury Department Secretary John Snow said allowing airlines to postpone their pension obligations puts strain on the Pension Benefit Guarantee Corp., which is running an $11.2 billion deficit. "If the Congress encourages firms to under-fund their pensions by substantially weakening pension funding requirements, retirees could face pension cuts," the secretaries said in a Jan. 23 letter to Senate Majority Leader Bill Frist.

Lower interest rates and a depressed stock market during the past four years have reduced pension fund balances at such carriers as United Airlines, which is struggling to emerge from bankruptcy. Unless Congress acts to allow a two-year deferral, the seven major U.S. carriers will have to make more than $5.3 billion in payments this year to shore up their pension fund balances and pay monthly benefits promised to retirees. Sen. Norman Coleman, a Republican from Minnesota, home to Northwest Airlines Corp.'s headquarters, said many of the carriers will succumb to bankruptcy if they're not given more time to make their plans whole. A White House statement released on Jan. 22 said Bush opposes specific aid for the airlines. The Senate bill still must be reconciled with legislation in the House before a final version can be approved and sent to Bush. The president has yet to veto any bills since taking office in January 2001.