Tuesday, October 27, 2015

Delta Air Lines to Leave Airline Trade Group: Carrier intends to drop out of Airlines for America in April

Delta Chief Executive Richard Anderson, who once served as chairman of the trade association, recently stopped attending meetings of the group’s board.

The Wall Street Journal
Oct. 27, 2015 5:43 p.m. ET

Delta Air Lines Inc. said Tuesday it intends to pull out of Airlines for America, the leading U.S. carrier trade association, in April. The move, which will save Delta $5 million in annual dues, will free up the carrier to find “a more efficient way of communicating in Washington” on issues important to Delta, its customers and employees, the company said in a statement.

Airlines for America said the move wasn’t unexpected because Delta “has not been aligned with other… members on a few key industry positions, including the need to modernize and improve the nation’s air-traffic control system,” said association CEO Nick Calio.

Delta’s departure will reduce the trade group’s airline membership to nine big airlines, including three cargo carriers. Left among the passenger airlines will be American Airlines Group Inc., United Continental Holdings Inc., Southwest Airlines Co., Alaska Air Group Inc., JetBlue Airlines Corp. and Hawaiian Holdings Inc.’s Hawaiian Airlines. The loss of Delta, the third-largest passenger carrier by traffic, could weaken the group’s lobbying efforts.

Doug Parker, CEO of American and the current chairman of the trade association’s board of directors, said the group has been and will continue to be more effective as an industry advocate “with a unified voice in Washington,” Mr. Parker said in a statement. Other issues the association is working on are fighting higher taxes on airlines and unnecessary regulations, while pushing for updated infrastructure and modernizing the nation’s air-navigation system.

Delta Chief Executive Richard Anderson, who served as chairman of the trade association for the first two years of Mr. Calio’s tenure, recently stopped attending meetings of the group’s board, although other Delta employees still serve on number of trade group councils and committees.

Mr. Anderson, chief of the Atlanta-based airline since 2007, isn’t shy about taking a contrarian view. Delta is the only leading U.S. airline to pick a fight with the U.S. Export-Import Bank for offering loan guarantees on Boeing Co. aircraft to well-heeled foreign carriers. The export bank, whose mandate wasn’t extended earlier this year, currently is fighting for its life in the budget battle playing out in Congress.

Mr. Anderson also lead the charge, later joined by American and United, against three large Persian Gulf airlines. The three U.S. carriers want the U.S. government to curtail the Gulf trio’s access to the U.S. on the grounds they are highly subsidized by their government owners, assertions the Gulf carriers deny. The U.S. position has led to conflict within the trade association, with JetBlue, Alaska and the cargo carriers decrying what they fear is protectionism on the part of the largest three members. The other U.S. carriers also fear retaliation by the Gulf airlines, with whom some of them have close ties.

And the Delta CEO has said numerous times this year that he doesn’t believe a privatization or corporatization of the nation’s air-traffic control system is a good idea. Many other U.S. airlines think the government should take air-navigation activities out of the Federal Aviation Administration and put it into a federal corporation, a public-private partnership or a nonprofit company. More than two dozen foreign countries have made that move.

U.S. advocates believe the FAA’s big air-traffic-control modernization program would roll out faster and surer under privatized authority. Mr. Anderson has said he thinks the FAA is doing a good job, and he recently assumed the leadership role of an influential committee that advises the FAA on that modernization effort.

Original article can be found here:  http://www.wsj.com

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