One-On-One: Sec. Peters Prepares Air Delay Proposals

U.S. Secretary of Transportation Mary Peters, nearing her year-end deadline to submit recommendations to President George W. Bush on ways to reduce U.S. airline delays, last week spoke with Business Travel News editors David Meyer and Jay Boehmer.

BTN: Are the airlines being cooperative as you seek remedies for delays?

Mary Peters: They're certainly working with us. A real base-level thing we have to say going into these negotiations is the status quo is not acceptable. We simply can't go into the 2008 heavy summer travel season with the very same things in place as in 2007, because we're just not going to subject the American traveler to that. It's just not fair to them. The airlines participated wholly in the process. They shared their ideas, their thoughts and their concerns. Are we going to come to a decision and a recommendation to the president that's going to make everyone happy? Probably not, but the status quo is just not acceptable.

There are operational improvements that we can continue aggressively to make, such as the redesign of the New York airspace, but there are some that simply cannot be done in the short term. We can't lay new runways in the short term, nor can the Port Authority. There are some things that will take longer. Even if we did everything in the list of operational improvements, we'd still have significant delays in the summer of 2008, absent doing something more than that. That's where we are and where our recommendations will be to the president. There are a lot of things we can do long-term, such as improving the air traffic control system, and we'll do that, but we owe it to travelers to do everything we can within the capabilities we have today to make it a better situation.

BTN: Is congestion pricing for airlines a viable option?

Peters: We hear loud and clear from the airlines that our initial idea of congestion pricing wasn't something that they could support, so we are looking at other options now. We're looking at auction. I think we will recommend to the president by the end of the year some very aggressive measures to use the market, but also to use the cooperation of the airlines and Port Authority to make a significant difference in the New York airspace. That translates to fewer delays throughout the nation.

BTN: How do you envision an auction system working?

Peters: We're going to be working on that between now and the end of the year and even into next year to decide how that's going to work.

BTN: Does 80 flights per hour remain the maximum threshold at JFK?

Peters: We're still negotiating where we want to be on a final number there. What we put out as our initial thought was 80, so we're continuing to have discussions on what that final number will be.

BTN: How will you determine which flights to cut to meet those caps?

Peters: We're having discussions with the airlines to make that decision. We believe that we can get the cooperation of several airlines that fly into these airports to bring that number down to what we believe is a manageable level.

BTN: Are foreign-based carriers part of this discussion, and will they be subject to the same rules that come from this process?

Peters: They've certainly been part of the discussion, and whether or not they're part of the ultimate solution is still part of what we're deciding today. We certainly want to look at our obligations to other countries that we have made in recent Open Skies agreements.

BTN: Some have proposed cutting private jet service from New York airports. Is that on the table?

Peters: Those folks were at the table when we had those discussions. Everything is still on the table in terms of what we're discussing right now. Teterboro is important and Stewart is an important airport as we look at the overall New York airspace, and will certainly be part of our consideration in making recommendations.

BTN: What is the timetable after you make recommendations to the president?

Peters: Once the president decides to accept what we recommend to him, we will put in place provisions by the summer of 2008 to make substantial improvements. We also contemplate having some longer-term issues. More immediate will be changes for the summer of 2008. In the medium term, we're looking into 2009 where we can start to put in place more sustainable solutions. Then, of course, the long-term is to get the next-generation air traffic control system in place so we can more safely operate more planes in the skies. Concurrent with that, we have to add more capacity to our airports. That is something we'll move more aggressively to do within our means as well. Much of those long-term solutions are going to be predicated on Congress moving this important piece of aviation legislation that has kind of stalled now. More immediately, we're going to have a number of passenger protections. We'll have lots more to say on that with subsequent announcements.

BTN: As the bill stands now, is there enough funding to modernize the air traffic control system?

Peters: Certainly not in the House bill. We firmly believe the House bill does not give us the resources we need. The Senate bill, especially as it came out of the Commerce, Science and Transportation committee, with the $25 fee, is a good start—a much better start than what we saw come out of the House. Of course, there are the Senate finance provisions that more closely replicate what the House did. We're still analyzing the impact and keeping the discussion ongoing with members of Congress, particularly the Senate. We're hopeful we can indeed come to some sort of an agreement that will give us the funding we need to make the technological changes in the next-gen, and also something the president can support and sign.

BTN: Congress approved a temporary extension of aviation funding programs and all aviation taxes through Dec. 14, 2007. What happens after that?

Peters: We're very hopeful that they will get another extension because there's not a prayer that the bill is going to come through by now. This issue hasn't been taken up by Congress again. We believe that Congress will pass another extension, but the fact that they haven't moved the bill, it hasn't gone to the floor yet and there certainly hasn't been anything that could be conferenced, tells us we've got a long way to go. We have some significant concerns with the House bill, including a provision that we think will set us back in our Open Skies agreement with the EU regarding foreign ownership. Next year, we need to get this bill considered by Congress again, but importantly it needs to be something the president can sign.

BTN: The consensus was that the Thanksgiving Express Lanes made a real difference last month.

Peters: They were used by several airlines, and we do think they made a positive difference. We're very pleased that the American public had a very positive, for the most part, experience over the Thanksgiving holiday. It wasn't without a great deal of effort, and I have to compliment the airlines, the airports, TSA, our own air traffic controllers and FAA, who did a good job of monitoring throughout that holiday period and making adjustments where they needed to. Very thankfully, Mother Nature cooperated with us.

We intend to do something similar over the end of the year holiday period between now and New Year's, and to implement some of these provisions. We're meeting with the airlines, the airport operators and others to go over lessons learned over the Thanksgiving period—what worked well, what didn't, what changes we would want to make—then prepare to implement that plan by the end of this year.

BTN: Can DOT permanently open the military lanes?

Peters: Certainly, on an exception basis like we did over Thanksgiving, it was very helpful. In instances where we have inclement weather in the Northeast, I think the military will work with us, but to turn them over to us on a more permanent basis is not something we can ask at this point in time because that would curtail the ability of the military to do the training and maneuvers that they need to do.

BTN: Is raising the denied boarding compensation a legislative or a regulatory process?

Peters: It requires a regulatory process and we are in the process of doing that through DOT. We are implementing recommendations, the DOT Inspector General's report that I had requested earlier this year, which will even go more broadly toward passenger protection.