Friday, May 1, 2009

Aid for Airlines?

The Associated Press reported yesterday that U.S. Transportation Secretary Ray LaHood believes the Obama Administration will seek financial aid for U.S. airlines to assist them in making the necessary upgrades to their fleets for NextGen--the Federal Aviation Administration's plan to move from a radar-based to a satellite-based air traffic control system.  The system, which is expected to cost at least $20 billion, isn't expected to be completed until 2025. 

There is a not unreasonable tendency for brows to start perspiring when the words "aid" and "airlines" are used in the same sentence.  Following the post-9/11 Air Transportation Stabilization Act which authorized the Government to guarantee loans to the airlines, concerns were raised that the legislation--though limited in scope--could prefigure reregulation.  See Brian F. Havel & Michael G. Whitaker, The Approach of Re-Regulation: The Airline Industry After September 11, 2001, [2001-04 Transfer Binder] Issues Aviation L. & Pol'y ΒΆ 10,051, at 4101.  This time out, however, it appears that the aid will be targeted to assist in upgrading the country's woefully inadequate aviation infrastructure and not to assist the airlines through a tough operating environment.  

For those either unfamiliar with the current air traffic control system or wishing to learn more, the men's lifestyle magazine GQ recently ran a story entitled "Traffic," detailing the system's daily operations and its antiquarian mechanisms.

http://lawprofessors.typepad.com/aviation/2009/05/aid-for-airlines.html

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