August 2005 | Commentary | Checking In

More Lift, Less Drag

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There is an inexplicable failure on the part of many in Washington, D.C., to understand that airlines are in business to make money, according to Air Transport Association of America President James May.

May's recent comments to The Wings Club of New York piqued my interest as I sometimes get the impression that our airline industry is treated like a utility that holds a monopoly.

To illustrate what must be done to ensure the air system's long-term health, May uses aeronautics analogies: An aircraft can increase payload by reducing drag, he says—so too can the airline industry, by reducing the weight and drag of excessive taxes and regulations.

What you tax, you get less of, May says, and asks: is that in the shipping public's best interest, the general public's best interest?

One certain way to "boost lift and thrust" of today's air industry is to get rid of the air traffic control system, says May. "The antiquated system should be retired to the Smithsonian where it can be admired as one of the marvels of 1950's technology," he suggests.

Perhaps before GPS becomes obsolete, the people controlling the purse strings will realize that a new ATC system will optimize air traffic flow by better matching demand to supply, much like you do every day with your hard assets and inventory.

Dealing with high fuel costs is another thing you do every day. The airline industry faces the same issue—the cost of jet fuel has doubled in the past three years.

Yet, with all these challenges, several areas of improvement in the air segment help companies create real value and become better global competitors:

  • Continuing investment in technology by the airlines, integrators, forwarders, and all-cargo carriers.
  • Substantial growth in the all-cargo segment and Pac Rim airlines.
  • The successful move to airline alliances in the past five years, which will likely continue as airlines find mutual efficiencies to help them deal with current business realities.
  • Retasking military airports and infrastructure for commercial cargo use and joint military/civilian use.

Another key trend making a world of difference is that forwarders, who acted as an extension of the airlines in the past, now act more as an extension of your transportation or logistics department. Day in, day out, the increased forwarder role goes a long way toward helping you face your airfreight challenges.

If the air industry is going to be a key driver for U.S. economic growth in the future, and to ensure the air industry can serve your growing needs, shippers and carriers need to roll up their sleeves and work together. One way to start is by contacting the Air Transport Association's government affairs office at 202-626-4006.

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