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Eased Rules Sought Amid Airlines' Woes

Airport executives offer proposals for relief during airline crunch

Alison Grant,  Sep 03, 2008

The aviation industry's fuel-driven financial jam calls for bold steps, even the temporary suspension of limits on foreign ownership of commercial carriers, leaders of the nation's airports said in a policy report to be released today.

The American Association of Airport Executives say that cuts in airline capacity are fundamentally changing U.S. air service - and that they need both flexibility from government regulations and government support to deal with the crisis.

Their report was drafted after an emergency summer meeting of airport officials, called in response to aviation's fuel-related quandary. Director Ricky Smith of Cleveland Hopkins International Airport participated.

The executives cited findings of a House subcommittee that domestic carriers have stopped flying more than 400 routes since March as their profit margins vanished with escalating fuel prices.

Small airports are hit especially hard, the executives said. Others affected by reduced air service include general-aviation airports, fixed-base operators that sell jet fuel and other services, and charter companies.

The 15-page report calls for a number of government initiatives to bolster airports hammered by air service losses.

One idea calls for an aviation fund financed by airlines or the federal government - or both - that would subsidize service to small cities. Another calls for the Federal Aviation Administration to raise the passenger facility charges on airline tickets, money that builds runways and other airport features.

The report also sketches out a national energy policy that includes giving the industry greater access to the country's strategic petroleum reserves and an "aviation draw," or priority use.

Besides these long-range goals, the executives recommend a number of emergency-response measures to be implemented in an "immediate crisis," which isn't defined in the report. The recommendations include temporarily:

Suspending the 25 percent limit on foreign investment in U.S. airlines, with "buyback provisions" for later restoring a larger ownership share by domestic investors.

Permitting U.S. airlines to discuss routes and fares, under the supervision of antitrust regulators, and with participation of local communities offering incentives such as tax waivers.

Allowing airport improvement money to be used to service airport debt.

Suspending changes to an airport's category or priority for navigational aids such as air control towers because of a drop in operations.

The airport executives' group declined to comment on the report until its official unveiling today at the National Press Club.

Airport executives offer proposals for relief during airline crunch

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