Airlines asked to reveal profits in FAA shutdown

By Joan Lowy, The Associated Press
Posted July 28, 2011, at 7:56 p.m.

WASHINGTON — Senate Democrats asked 12 of the nation’s largest airlines on Thursday to reveal how much money they’re making from increased airfares during the ticket tax holiday created by the partial shutdown of the Federal Aviation Administration.

“We are writing to confirm whether your company is one of the airlines generating profits by exploiting its own customers,” Sens. Jay Rockefeller, D-W.Va., and Maria Cantwell, D-Wash., said in the letters. “Like the ‘ancillary fees’ that many airlines now charge for blankets, checked luggage, priority seating and itinerary changes, this recent fare increase has further damaged the in dustry’s relationship with airline passengers.”

Rockefeller is chairman of the Senate Commerce, Science and Technology Committee, which has oversight of the FAA, and Cantwell is chairwoman of the aviation subcommittee.

The FAA partially shut down last week after a legislative stalemate allowed its operating authority to expire. Nearly 4,000 FAA employees have been furloughed, almost 200 airport and other aviation construction projects have been halted, and an estimated 70,000 construction workers, engineers and others who worked on those projects have been laid off or are expected to be laid off. Air t raffic controllers remain on the job.

“These are people who work hard and were right smack dab in the middle of a construction season,” Transportation Secretary Ray LaHood told reporters after a White House meeting on the shutdown. “This is not the time to be laying off 70,000 people.”

Airlines’ authority to collect ticket taxes expired with the shutdown. The Transportation Department estimates the trust fund that pays for most of the FAA’s programs, including air traffic control, is losing $30 million a day during the shutdown. But most passengers aren’t benefiting. All but a few carriers immediately raised fares in amounts roughly equal to the taxes that disappeared.

LaHood has twice called Nick Calio, the president of the Air Transport Association, this week, as well as top executives at several airlines, to complain about the fare increases.

Sharon Pinkerton, a lobbyist for the Air Transport Association, pleaded for understanding at a Senate hearing Thursday.

“The airline industry is sick, it’s anemic. In the last 10 years we’ve had to shed 150,000 jobs due to our $55 billion of losses,” she said.. “We have to be able to cover the cost of flying folks.”

“Yes, some carriers made individual decisions to keep the total ticket prices the same. Customers are paying this week exactly what they paid last week before the funding left,” Pinkerton said.

The airlines sent letters are Delta Air Lines, United-Continental, American Airlines, Southwest Airlines, US Airways, Alaska Air Group, JetBlue Airways, Republic Airways Holdings, Hawaiian Airlines, Spirit Airlines, Virgin America and Allegiant Air.

LaHood met Wednesday for an hour with Rockefeller and House Transportation and Infrastructure Committee Chairman John Mica, R-Fla., trying to resolve the dispute that led to the FAA shutdown. But Mica told them the situation was out of his hands, that House Speaker John Boehner, R-Ohio, and other top GOP leaders were making the decisions, according to Rockefeller.

“Why does somebody run for public office if they simply take orders from other people?” Rockefeller complained about Mica in a speech to the Senate.

Mica sent GOP colleagues a letter Thursday reasserting that the shutdown can be resolved immediately if the Senate will pass a House extension bill that contains a provision cutting $16.5 million in air service subsidies for 13 rural communities.

Democrats have blocked passage of the bill, accusing Republicans of using the subsidy cuts as leverage to force Democrats to accept a provision in a separate, long-term FAA funding bill that would make it more difficult for airline workers to unionize. The provision primarily benefits Delta.

Senate Democrats are “arguing that the House-passed extension is about a labor provision, but the fact is there is no labor provision in the extension,” Mica wrote.

Sen. Kay Bailey Hutchison, R-Texas, contradicted Mica, saying House Republicans were using the subsidies cuts — which they knew senators wouldn’t accept before attaching them to a bill temporarily extending FAA’s operating authority — to get Democrats to give in on the labor issue.

“I was completely aghast that they would put a policy issue that isn’t the real issue [on the FAA extension bill] to cover the real issue,” said Hutchison, the senior Senate GOP negotiator on the FAA bills.

“You can’t, in my opinion, hold up the FAA and the employees and the airports that are building runways because the Senate doesn’t agree with your position on one issue,” she said in an interview.

http://bangordailynews.com/2011/07/28/news/nation/airlines-asked-to-reveal-profits-in-faa-shutdown/ printed on September 22, 2014