In her first major public speech as the US Federal Aviation Administrator, Jane Garvey may not have set the industry on fire, but the underlying message - coupled with recent announcements made by the Department of Transportation - was unmistakeable. Garvey is putting the FAA back on the straight and narrow.
Garvey has clearly set out her four priorities as safety, security, system efficiency and ensuring an adequate and stable source of funding for the FAA. Top of those comes safety and Garvey makes it clear that the FAA will stay focused on these goals during her term in office.
The unspoken message which comes across is that the boundary has finally been drawn between watchdog and industry promoter; the dual mandate with which the previous administrator was forced to juggle, and which came to grief with the ValuJet accident last year.
Focusing on safety should secure support for Garvey from all quarters. Few are going to argue with a programme that aims to reduce the accident rate and airline safety has become something of an en vogue topic in the US during 1997. The General Accounting Office, Congress, the White House Commission on Aviation Safety and Security (or Gore Commission), the Inspector General, the National Transportation and Safety Board and the industry have each submitted safety-related proposals to the FAA, adding to those of the administration's own internal reviews and recommendations. So there will be no shortage of support and ideas.
The problem, as Garvey herself acknowledges, will lie in sifting through those proposals - some 1,000 in all - and deciding which to pursue first. 'Even when you eliminate the duplicates, that leaves 450 proposals. That is not a focused agenda,' admits Garvey. 'Which is why we are putting together a safety agenda that ranks the recommendations based on hard data, using established and tested methodologies.' In other words, Garvey will be applying the pragmatic approach for which she has a reputation.
Garvey also promises that she will improve the relationship between the regulator and the regulated and work with the industry on the safety agenda. 'We will not abrogate our regulatory responsibility. Not at all,' says Garvey. 'It's just that there is so much to gain from collaboration.'
So what becomes of the industry promoter role? Remembering that Garvey and DOT secretary Rodney Slater worked well as a team before at the Highways Department, it was probably not coincidental that while Garvey was outlining her safety-focused agenda the DOT was putting some bite behind its bark over competition issues.
Having warned that it was concerned about the prospects for new, low-cost competition in the US and, in particular, about the high level of air fares at major slot-controlled airports, the DOT has stepped up to the task and granted takeoff and landing rights to several low-cost carriers to establish new services at Chicago /O'Hare and New York /LaGuardia.
In so doing the DOT used its authority to grant slot exemptions on an 'extraordinary' basis, something it says it will continue to do to a limited extent. Future requests, says the DOT, will be given priority if the applicant meets Stage 3 noise rules, can demonstrate operational and financial viability, and will introduce new, nonstop and competitive, especially low-fare, service.
AirTran Airlines (formerly ValuJet) has won 11 slots for service between Atlanta and LaGuardia and its merger partner of the same name has been awarded four slots for service between Knoxville, Tennessee, and LaGuardia. Meanwhile Frontier Airlines has been given six exemptions for a Denver to New York service. On the same principle, O'Hare gets two airlines - Reno Air and Trans State Airlines - which will each now be able to offer service from some of the smaller cities in the US directly into the country's busiest airport. Analysts agree that once these new services are up and running, fares will drop.
As if that wasn't already enough to get the attention of the majors, what might happen next has them warning that the pro-competition pendulum could swing too far.
Senator John McCain, the transportation committee chairman, has introduced a bill - the Aviation Competition Enhancement Act of 1997- that includes several pro-competition provisions. Among these are slot auctioning and the establishment of a 90-day deadline for the DOT to respond to complaints of predatory behaviour. The legislation would mandate a slot allocation among new entrants and those limited incumbent carriers that hold 12 or fewer slots at a major airport. Most controversially of all, where it is not possible to create new slots at congested airports, the DOT would be compelled to withdraw a number of slots from those major carriers that acquired them through the 'grandfathering' system in 1985.
McCain suggests that up to 10 per cent of slots be reallocated initially, then 5 per cent every subsequent two years. The withdrawn slots would be auctioned among only new entrant and limited incumbent carriers, with the proceeds to be deposited in the aviation trust fund - a funding source for the FAA.
If all of this falls into place, it will provide some very neat answers to some vexing problems that the FAA and DOT have faced over the past 18 months.
The FAA would regain its credibility with the US public as a watchdog while also developing better relations with the industry. The DOT would provide the environment in which low-cost competition can regain its footing. And the heat that doubtless would be generated by the creation of that environment could be directed towards those most used to taking it - the politicians. The lobbyists will be working overtime in the New Year.
Karen Walker
Source: Airline Business
