Legislative Affairs

Recently, I met with Larry Nagin, US Airways Executive Vice President, Corporate Affairs and General Counsel, to discuss a variety of issues. The meeting was part of an ongoing effort to exchange information and share ideas about issues of mutual concern. In this way, I am able to stay on top of legislative, regulatory and other developments important to the Company and can help organize pilot support for goals of mutual interest, such as US Airways effort to obtain a new Philadelphia-Milan route.

Below are some of the more significant issues with which the Company is currently involved.

Milan authority

Although the Department of Transportation (DOT) awarded the US-Italy route to Delta, US Airways was a vigorous participant in the DOT’s proceeding to determine which U. S. airline would receive the award. US Airways demonstrated why its Philadelphia-Milan proposal should have been selected over Delta and American (the other two applicants in the case): In the face of international consolidation

In the face of international consolidation and dominance by mega-alliances, DOT should promote an international aviation policy that encourages competition and new entry.

For Delta (that sought its new Atlanta-Rome route) the new authority represents just one more spoke in its massive transatlantic route network.

By contrast, for US Airways, the Philadelphia-Milan route would have been a significant addition to its existing international service and contribute substantially to US Airways efforts to become a major transatlantic competitor, thereby injecting important new competition in the U.S.-Europe and U. S.-Italy markets.

US Airways pilots participated in this effort by contacting our congressional representatives and writing letters to Secretary Slater. On February 23, Chairman Stephen Wolf sent a letter to MEC Chairman Chris Beebe thanking all US Airways pilots for their help on this issue. In addition, numerous business, civic and government leaders in US Airways’ key cities registered their strong support for the Philadelphia-Milan route.

Charlotte-London (Gatwick) service

As the 1999 summer traffic season approaches (the third since US Airways announced it would begin Charlotte-Gatwick service), commercially viable slots to operate the service still have not been made available. US Airways has expended enormous efforts (in both political and regulatory channels) to obtain viable slots for the service and continues to do so. US Airways senior management have met with numerous high level government officials, including Secretary of Transportation Rodney Slater, Under Secretary of State Stuart Eisenstat, White House officials, and a senior policy adviser to British Deputy Prime Minister John Prescott. In addition, various members of Congress, including Senators Jesse Helms and Ernest Hollings have expended considerable effort on our behalf with both the U. S. and U. K. governments. In the meantime, British Airways maintains a monopoly on the route. In the current winter season, the Company was able to convert the unusable Charlotte slots to support a second Philadelphia-London service. This issue remains a high priority for the Company, which continues to work hard to obtain viable slots to begin the service this summer.

United’s expansion at Dulles

Recently, United Airlines, the largest carrier in the world, announced that it will increase flights at Washington Dulles International Airport by 60 percent starting in April — a move seen by industry observers as a tactic directly aimed at US Airways. United denied that its expansion was a response to the startup of MetroJet service at Dulles, but the denial is not very credible. In the January 6 edition of US Airways Today, Chairman Stephen Wolf stated that employees should view the announcement of United’s buildup at Dulles as an indirect compliment on their hard work in transforming US Airways into the carrier of choice. The Company views United’s action as presenting serious competitive challenges and will be working to meet those challenges in a variety of ways.

Legislative issues

Congressman Bud Shuster (R–PA), Chairman of the Transportation and Infrastructure Committee, introduced a bill, The Truth in Budgeting Act (H. R. 111), which would take the Aviation Trust Fund off budget. What this means is that, if enacted, the monies collected from aviation passengers through a ticket tax, would all be dedicated to aviation improvements. Aviation ticket taxes this year are expected to generate about $10 billion, but under the current system, only about $5. 6 billion would be spent fixing runways or updating air traffic control equipment. The balance would go to offset other government spending, contributing to a balanced federal budget.

Chairman Shuster, who has long been a proponent of making certain all trust funds are used for their declared purposes, has named 1999 the Year of Aviation. This budgetary change for aviation is his first priority. Shuster further indicated that taking the Trust Fund off budget would be predicated upon two things: no change in the existing tax structure and continuation of the General Fund contribution in support of the FAA.

All of these issues are important to the industry. Both ALPA and US Airways support efforts to put trust funds to work on aviation programs in the interest of improving safety.

Competition policy

Aviation competition in the United States has become a major issue of government concern and subject of public debate. In 1998, the Department of Transportation proposed new guidelines intended to prevent predatory pricing by major U. S. airlines designed to drive small, new entrant carriers out of particular markets. The proposed guidelines have been extremely controversial and have generated substantial debate, even in Congress. Legislation passed last year delays action on the proposed guidelines pending completion of certain congressionally-mandated studies.

The Air Transport Association (ATA), which US Airways supports, has strongly opposed the proposed guidelines and engaged in substantial lobbying and legal efforts to prevent DOT from adopting them. In separate communications with DOT, US Airways has highlighted MetroJet, which was developed through the use of a cross-functional employee task force as its competitive response to low-cost carriers. MetroJet permits US Airways to compete for the price sensitive segment of the market, while the mainline continues to provide the full range of services.

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