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Changing of the guard at ATA; legislative challenges mount

30-Nov-2010

The Air Transport Association named a new president – effective 1-Jan-2011 – in Nicholas Calio who succeeds current president and CEO James May whose contract was allowed to lapse.

This was the first indication of a changing of the guard at ATA. “We thank Jim for his tireless leadership and commitment during some of the most difficult years this industry has ever faced," said ATA Chairman Glenn Tilton, who is also chairman of United Airlines. "Jim's efforts over the past eight years on behalf of the industry have been many and are much appreciated. We wish him well in the future."

Calio, 57, hails from Citigroup but was assistant to the President for legislative affairs in the George W Bush and George HW Bush administrations. He leads global government affairs and where he is a member of Citi’s senior leadership committee.

Calio’s main challenge will be convincing Washington that its policies are hurting an industry that contributes USD1.3 trillion to the US economy annually and is an economic driver of jobs and prosperity. That is a message that has been ignored in the past few years on both sides of the aisle.

Calio’s Republican credentials may give him a leg-up with the increasingly rightist leaning of Congress. But, he still faces an uphill struggle to bring critical aviation issues to the top of the national agenda, something that hasn’t happened since, perhaps, the Hoover Administration when navigation beacons were first laid out. One of ATA’s problems has been its contradictory stances on issues such as opposing increases in passenger facility charges while its member pour on new ancillary fees.

Republic leaders in the House – John Boehner and Eric Cantor – as well as Senate Republic Leader Mitch McConnell put themselves on record the day after the recent US election that their job is to deny President Obama a second term. That means they are set to deny him any legislative victories as well.

But that is unlikely to change the fate of industry initiatives which have never enjoyed much legislative traction on Capitol Hill.

The industry is now in the fifth year of continuing resolutions on the Federal Aviation Administration reauthorisation legislation that has been passed any number of times in the House, under Republican and Democratic administrations, but has never made it out of the Senate because of arguments over how the system would be financed and whether airlines would get a break in paying from much of system operations. Last year, the Senate Bill fell on a provision unfavourable to Federal Express labour relations.

The Obama Administration's attack on the travel industry with its rhetoric against business and commercial aviation and its condemnation of incentive travel and the use of business jets in the wake of the auto bailouts. It wasn’t until much later that the industry was able to convince many in Washington that aviation is, indeed, the perfect nexus between Wall Street and Main Street when it comes to providing Americans with good high-paying jobs.

At the same time, Obama proposed general fund financing for studying high-speed rail, which, if successful would likely be subsidised as it is in Europe, to compete against the privately funded airline industry. Republican leaders recently vowed to kill the high-speed initiative as their first example of denying Obama any legislative advances.

DOT Secretary Ray LaHood targetted airlines with a populist, pro-consumer agenda that has ended up doing more harm than good for the consumer.

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The industry is also threatened by proposed consumer rulemaking that could derail industry efforts to reform global distribution services.

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“Nick has a record of success in managing complex issues and working collaboratively with people at the highest levels both in the private and public sectors,” said Tilton, banking on Calio’s successful record. Tilton went on to say that Calio was a recognised leader in Washington and other world capitals through his work with Citi.

He said, adding the industry is facing critical issues in creating a viable aviation system: "Having a professional as experienced and widely respected as Nick will be vital as the US airline industry confronts a number of key issues – from improving access to international markets and increasing federal investment in air traffic infrastructure to reducing excessive taxation and regulation."

Despite his impressive background, Calio will need a miracle to gain better reception for aviation issues in Washington.

Slight hope was raised recently by the Administration’s focus on infrastructure across all transportation modes. A bipartisan study concurred with the Administration that infrastructure needed to be lifted to the level of national agenda. However, given the Republican stance on Obama initiatives as almost dead on arrival at Hill, that is unlikely to go very far.

The only hope rests on Calio being able to get Obama to use aviation’s impressive economic contribution to run around what is developing into a do-nothing Congress, something that was very successful for Harry Truman.


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