Balancing the Aviation Equation
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ATA 07 Annual Rpt 7/26/07 1:25 PM Page 1 2007 Economic Report balancing the aviation equation smart skies keeping pace in a changing world ATA 07 Annual Rpt 7/26/07 1:25 PM Page 2 Officers U.S. Airlines by Operating Revenues – 2006 n o i t James C. May More Than $1 Billion $100 Million to $1 Billion Less Than $100 Million a u President and Chief Executive Officer q ABX Air Air Transport International 40-Mile Air Grand Canyon Helicopters Scenic Airlines e John M. Meenan AirTran Airways Air Wisconsin Airlines Aerodynamics Grant Aviation Seaborne Airlines n o Alaska Airlines Allegiant Air Air Midwest Great Lakes Airlines Servant Air i Executive Vice President and t a Chief Operating Officer American Airlines Aloha Airlines Alaska Central Express Gulf & Caribbean Air Shuttle America i v American Eagle Airlines Amerijet International Alaska Seaplane Service Gulfstream International Airlines Sierra Pacific Airlines a Atlantic Southeast Airlines ASTAR Air Cargo Ameristar Air Cargo Hageland Aviation Services Skagway Air e Paul R. Archambeault h t Vice President, Atlas Air/Polar Air Cargo ATA Airlines Arctic Circle Air Service Harris Air Services Sky King g Chief Financial Officer and Treasurer Comair Champion Air Arctic Transportation Homer Air Skyway Airlines n i Continental Airlines Continental Micronesia Arrow Air Iliamna Air Taxi Smokey Bay Air c n Basil J. Barimo Delta Air Lines Evergreen International Asia Pacific Airlines Inland Aviation Services Spernak Airways a l Vice President, Operations and Safety FedEx Express Executive Airlines Bemidji Airlines Island Air Tanana Air Service a b Frontier Airlines ExpressJet Airlines Bering Air Katmai Air Taquan Air Edward J. Barron JetBlue Airways Florida West Airlines Big Sky Airlines Kenmore Air Tradewind Aviation Vice President, Government Affairs Mesa Airlines Gemini Air Cargo Boston-Maine Airways Kitty Hawk Air Cargo Tradewinds Airlines and Legislative Counsel Northwest Airlines GoJet Airlines Cape Air L.A.B. Flying Service US Helicopter SkyWest Airlines Hawaiian Airlines Capital Cargo International Lynden Air Cargo Victory Air Transport David A. Berg Southwest Airlines Horizon Air Cargo 360 M&N Aviation Vieques Air Link Vice President, United Airlines Kalitta Air Caribbean Sun Airlines MAXjet Airways Vintage Props & Jets General Counsel and Secretary UPS Airlines Mesaba Airlines Centurion Air Cargo Miami Air International Warbelow’s Air Ventures US Airways Midwest Airlines Chautauqua Airlines NetJets Ward Air James L. Casey North American Airlines Colgan Air New England Airlines West Isle Air Vice President, Industry Services Omni Air International CommutAir Northern Air Cargo Wings of Alaska and Deputy General Counsel Pinnacle Airlines Ellis Air Taxi Pace Airlines Wright Air Service David A. Castelveter PSA Airlines Empire Airlines Pacific Airways Xtra Airways Vice President, Communications Ryan International Airlines ERA Aviation Pacific Wings Airlines Yute Air Alaska Southern Air Everts Air PenAir Marc C. Gonzales Spirit Airlines Express.Net Airlines Piedmont Airlines Vice President, Congressional Affairs Sun Country Airlines Falcon Air Express Primaris Airlines Trans States Airlines Focus Air Promech Air John P. Heimlich USA 3000 Airlines Freedom Air RegionsAir Vice President and Chief Economist USA Jet Airlines Freedom Airlines Republic Airlines World Airways Frontier Flying Service Salmon Air Patricia G. Higginbotham Vice President, Policy and Chief of Staff I Member, Air Transport Association Report Content Sharon L. Pinkerton Unless otherwise noted, the data provided in this report reflects the worldwide operations of the 141 U.S. passenger and cargo airlines shown on this page, as recorded by the U.S. Department Vice President, Government Affairs of Transportation (DOT) in 2006, under Chapter 411 of Title 49 of the U.S. Code. Due to rounding, in some cases, the sum of numbers in this report may not match the printed total. Also, certain historical data has been restated to reflect the most current information available. Nancy N. Young Vice President, Environmental Affairs For a glossary of terms and other information regarding this report, visit www.airlines.org. 2 ATA 07 Annual Rpt 7/26/07 1:25 PM Page 3 Mission Contents ounded in 1936, the Air Transport Association of b a l a Consistent with its founding America is the nation’s oldest and largest airline trade Officers . .2 n c Mission . .3 i F n principles, the Air Transport association. The association’s fundamental purpose is g Association of America, Inc. Goals . .3 t (ATA) serves its member airlines to foster a business and regulatory environment that ensures President’s Letter . .5 h Highlights . .6 e and their customers by: a safe and secure air transportation and enables U.S. airlines Eleven-Year Summary . .7 v i Results by Region . .8 a t • Assisting the airline industry in i to flourish, stimulating economic growth locally, nationally Industry Review . .9 o continuing to provide the n Safety . .9 e world’s safest system of and internationally. Environment . .9 q u transportation E-Business . .9 a By working with its members in the technical, legal and political arenas, ATA leads industry t i • Transmitting technical expertise Fleet . .10 o and operational knowledge efforts to fashion crucial aviation policy and supports measures that enhance aviation safety, Operations . .10 n to improve safety, service security and well-being. ATA goals include: Revenues . .11 and efficiency Expenses . .12 Earnings . .13 • Advocating fair airline taxation • Championing the world’s safest transportation system Capital Structure . .13 and regulation worldwide to • Protecting airline passengers, crew members, aircraft and cargo, working collaboratively with the Jobs . .13 foster a healthy, competitive Department of Homeland Security (DHS) and the Transportation Security Administration (TSA) Outlook . .14 industry Special Topics . .15 • Developing and coordinating • Modernizing the U.S. air traffic management system via the Federal Aviation Administration (FAA) Smart Skies . .15 industry actions that are • Challenging government policies that impose unwise regulatory burdens or impinge on Environment . .16 environmentally beneficial, marketplace freedoms Safety . .17 Cargo Security . .18 economically reasonable and • Reducing the disproportionate share of taxes and fees paid by airlines and their customers technologically feasible Index of Charts and Tables . .30 • Improving the industry’s ability to attract the capital necessary to meet future demands ATA Members . .31 • Shaping international aviation policy to ensure that U.S. and foreign carriers can compete on equal terms During its more than 70-year history, ATA has seen the airline industry grow from the small, pioneering companies of the 1930s into indispensable facilitators of the global economy. ATA and its members continue to play a vital role in shaping the future of air transportation. 3 ATA 07 Annual Rpt 7/26/07 1:25 PM Page 4 If two jets – one airline, one corporate – left Chicago for Denver at 6:35 p.m. and traveled 800 miles, both arriving at 8:05 p.m., which plane would have used more air traffic control services? . Both would have used the same services. same the used have would Both . Neither Answer: On a given route, all high-performance aircraft – regardless of size, speed, weight or number of passengers – use the same air traffic control services. In the air traffic controllers’ world, a blip is a blip, whether routing a passenger jet with 200 passengers, a cargo jet with 100 tons of freight or a corporate jet with only one passenger. However, while the demands on the air traffic control system are equal, not all users pay equally. Building a system that can meet the needs of the 21st century requires us to balance the aviation equation – matching the costs that users impose with the taxes that they pay for air traffic control services. ATA 07 Annual Rpt 7/26/07 1:25 PM Page 5 b a l ike so much in life, success in the airline business is often a matter of balance – that is what brings affordable air a n c i travel, reliable shipping, customer satisfaction, reduced delays, improved fuel efficiency, minimized emissions, a n g t L h healthy economy and, ultimately, the type of air transportation on which we all rely. By the numbers, 2006 was e a a year of real improvement for the nation’s airlines – a welcome return to profitability after five years of record losses. v i a t i The industry’s profit margin of 1.9 percent, given the near tripling of insert on Page 15 and in the full-page graphics throughout the report, which clearly illustrate o n the price of jet fuel over the past four years and with fuel costs for the problem and attainable solutions. e q the first time exceeding labor costs (previously the largest cost center), u a t i is a strong testament to the tremendous commitment and effort put We need a 21st century air traffic control system that will safely, efficiently and equitably o forward by the people of the airlines. That effort has involved scruti- meet the growing needs of consumers. Beyond the needed transformation of technology n nizing literally every detail of airline expenses and operations to and procedures, this also involves establishing a dynamic funding system to pay for the maximize safety and efficiency. ATC services that everyone uses. ATA member airlines are asking for a system in which they and their customers pay fairly for the services and facilities they use, but they are also Though this report provides a snapshot of what has been accomplished across a broad asking for an end to the subsidies that airlines and their customers are paying to support spectrum of industry issues, I would like to direct your attention to one key issue: the other ATC system users. For more information about this formula for success and to learn growing imbalance between the demand for air traffic control (ATC) services and the ability how you can lend your support, please visit www.smartskies.org.