Delta makes best argument yet for waiting to equip for NextGen

The industry has been saying for some time it wants to see proof that NextGen equipage will deliver results to the industry’s bottom line for a long time, but Delta, at its 1Q2011 earnings call, expressed doubts about the necessity for equipage in the near term, suggesting promised improvements may be little more than a sales job by the avionics industry.

Delta CEO Richard Anderson made the best argument yet for waiting to equip fleets with NextGen technology voicing two arguments not heard beyond the beltway. The industry has long contended that without proof of significant benefits it will likely just be adding technology and costs for something it may never use. It has happened often enough in the past.

Interestingly, he seemed to be echoing US Airways Chair Doug Parker in saying that the US may be overspending on infrastructure because the industry is far more circumspect about growth than airframe and government forecasts would indicate. For his part, Mr Anderson extended the argument saying the US has yet to eek out all the performance in its air traffic control system and it is up to FAA to fix it.

See related story: US Airways doubts need for big infrastructure projects

“First, as an industry, through the Air Transport Association, we are supportive of NextGen,” he said during yesterday’s earnings call. “But, we believe there is significant latent capacity with our existing equipage. Many carriers - Delta, American, United, Southwest - have made significant investment on equipage for our existing fleets that we are not using. So we believe there is significant uptake if we were to just use required navigation performance procedures and RNAV procedures at airports around the country and use the existing latent capacity in the air traffic control system.

“The controllers handbook needs to be revised to use the existing airspace we have before we make any additional investments,” he continued, adding in extremely frank language that the advantages of NextGen have to be proven. “When we do make those additional investment we want to be certain it results in block time and fuel savings and is not just a big sales program by the avionics sales people. We’ve got to see demonstrable improvement in the ATC system before we can make that kind of investment. And if we do make that investment it should be funded as part of the NextGen process and it should have specific paybacks in terms of block time and fuel burn.

“The point is, we support NextGen, but our experience so far has been with very significant investments in our fleet - Delta is today investing in the fleet to use GPS technology - but we aren’t using the capabilities we have today across the system and we have to leverage the technology we have today before we add more technology and more costs.”

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