The Atlanta Journal-Constitution
Published on: 07/27/08
Washington — Last week, financially battered airlines implored the Senate to help lower fuel prices by limiting excessive oil speculation.
But by week's end, debate on the Stop Excessive Energy Speculation Act of 2008 was tied up in partisan knots over whether to add oil drilling amendments, making it unlikely any restraints on speculation could pass before autumn.
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And so it goes for the airlines on Capitol Hill. Whether the issue is curbing oil speculation, shifting more of the aviation tax burden to corporate jets, quickly modernizing the air traffic control system or suspending fuel taxes, the airlines aren't getting help from Washington.
"On the big issues, I don't think they have had much success," said Kevin Mitchell, founder of the Business Travel Coalition, a group representing corporate travel buyers.
It wasn't always so tough for the industry. In the days immediately following Sept. 11, 2001, Congress rushed to help the airlines, which had been forced by the government to ground domestic flights for two days after terrorist attacks. By Sept. 22, President Bush had signed a $15 billion bailout package.
Today, the U.S. airline industry is facing a new financial crisis, this one caused by soaring oil prices.
Last year, the airlines spent $31 billion for jet fuel and made an operating profit of $5 billion. This year carriers likely will spend about $52 billion on fuel, and when it comes to losses, "the numbers will be huge," said Phil Baggaley, an airline analyst for the Standard & Poor's credit rating firm.
Despite the growing crisis, members of Congress have not gotten on board with the industry.
Lawmakers could help cut fuel costs by rushing to modernize the air traffic control system to reduce flight delays. Instead, work on the NextGen system is being delayed along with approval of a long-term budget for the Federal Aviation Administration. Also, the Senate has refused to confirm Bobby Sturgell, Bush's choice to serve as permanent FAA administrator.
The airlines have begged Congress to restructure the aviation funding system to require corporate jets to pay a bigger share. No luck.
Might Congress temporarily suspend some fuel taxes to help the industry? Asked this at a news conference this month, House Ways and Means Chairman Charles Rangel (D-N.Y.) replied, "No, quite frankly, that's not under consideration."
Why is the economically vital airline industry in such a slump on Capitol Hill? Experts see several reasons.
Hubert Horan, a Phoenix-based aviation consultant, says the key problem for airlines is that "the problems are just not amenable to simple solutions."
For instance, modernizing the air traffic control system "is hellaciously complex, so nothing gets done," Horan said.
And in an election year that could bring sweeping change to Washington, politically sensitive issues such as energy prices are caught in a partisan tug of war.
A good example is the bill to curb oil speculation. Republicans are insisting the legislation include amendments expanding domestic oil drilling, which many are touting on the campaign trail as a solution to high gasoline prices.
"You need a consensus to make a breakthrough," Horan said.
On top of that, some airline executives have angered lawmakers by not being sufficiently responsive to complaints about delays, lost luggage and service cuts, said Mitchell of the Business Travel Coalition. "They have shot themselves in the foot too many times," he said.
And finally, Andrew B. Steinberg, an aviation attorney and former chief counsel for the FAA, said the industry's political clout has been diminished because the airlines often are divided, with discount carriers seeking different solutions from big legacy carriers. That prevents the industry from speaking in a single, clear voice.
"The industry as a whole has to present a more compelling message to Congress," he said.
The airlines' main voice lobbying Congress is that of James May, chief executive of the Air Transport Association, the trade group for major carriers.
May spends endless hours testifying before House and Senate committees and meeting with key members to make the industry's case.
In the current fight over oil speculation, for example, he is arguing that "we're not interested in any handouts; we want to fight our own fights," May said in an interview. "But we want to see fuel that is priced at a realistic approximation of supply and demand."
By most accounts, the airlines' huge problems are beyond the power of any one lobbyist to solve.
"It's not a failure of ATA," said Sen. Johnny Isakson, a Georgia Republican whose state is home to Delta Air Lines. "Congress is just doing a lousy job right now."
Rather than looking for compromises that lead to solutions, "Congress seems to be in partisan paralysis," he said.
Only when a particular airline has a particular problem with an obvious solution can airline lobbyists win big victories, consultant Horan said. For example, in Delta's battle to win Justice Department antitrust approval of its proposed merger with Northwest Airlines, "Delta has hired every lobbyist in creation," Horan said.
As a result, the merger is moving forward, he said. "If it's something that can be done in a back room with the administration, airlines can still get it done."
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