WASHINGTON AVIATION SUMMARY May 2017 EDITION

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WASHINGTON AVIATION SUMMARY May 2017 EDITION WASHINGTON AVIATION SUMMARY May 2017 EDITION CONTENTS I. REGULATORY NEWS .............................................................................................. 1 II. AIRPORTS ................................................................................................................ 3 III. SECURITY AND DATA PRIVACY ............................................................................ 5 IV. E-COMMERCE AND TECHNOLOGY ....................................................................... 7 V. ENERGY AND ENVIRONMENT ................................................................................ 9 VI. U.S. CONGRESS .................................................................................................... 10 VII. BILATERAL AND STATE DEPARTMENT NEWS ................................................... 13 VIII. EUROPE/AFRICA ................................................................................................... 14 IX. ASIA/PACIFIC/MIDDLE EAST ................................................................................ 16 X. AMERICAS ............................................................................................................. 18 For further information, including documents referenced, contact: Joanne W. Young Kirstein & Young PLLC 1750 K Street NW Suite 200 Washington, D.C. 20006 Telephone: (202) 331-3348 Fax: (202) 331-3933 Email: [email protected] http://www.yklaw.com The Kirstein & Young law firm specializes in representing U.S. and foreign airlines, airports, leasing companies, financial institutions and aviation-related companies before U.S. Government agencies, Congress, the courts and in commercial and financing matters. ©2017 Kirstein & Young PLLC. Washington Aviation Summary I. REGULATORY NEWS 1. IATA: Industry Painted with Hue of a Very Regrettable Incident. Videos went viral of a passenger being violently dragged from a United flight at O’Hare by Chicago Aviation Department police, because he refused to give up his seat. And, said Alexandre de Juniac, Director General and CEO of the International Air Transport Association (IATA), headlines began painting “an entire industry with the hue of a single and very regrettable incident.” Questions have been raised about passenger rights, denied boarding procedures, actions of local law enforcement, and overbooking practices, noted de Juniac, but “the best results will not come out of angry, knee•jerk responses that seek resolution in 140 characters, or a newspaper comment piece written before the entire incident has revealed itself. If there is something in this incident that requires changes at an industry level the next step is a robust dialogue.” . The Department of Transportation (DOT) said it is reviewing the United Express Flight 3411 event, and launched a microsite for consumers, “Got Flights? Know Your Rights.” . In initial apologies, United CEO Oscar Munoz said fares would be refunded to all passengers on the flight and enumerated immediate actions to follow “this truly horrific event.” The airline later issued a formal “Review and Action Report” (see Section X). United Continental Holdings said Munoz will not become Chairman as planned, and compensation for senior executives will be tied to progress in improving the customer experience. Members of Congress ordered Munoz and DOT to provide detailed reports of the incident, scheduled hearings and introduced new passenger protection bills (see Section VI). The Chicago Aviation Department officers who were called in by the airline to forcibly remove the passenger were placed on administrative leave. And the passenger, who suffered a concussion, a broken nose and the loss of two teeth, settled out of court with the airline for an undisclosed sum. 2. Federal Government Hiring Freeze Ends. The Administration replaced a January 23 government hiring freeze with guidance to “reorganize federal agencies and reduce wasteful or duplicative functions.” Agencies are to achieve near-term workforce reductions and cost savings and submit a draft plan by June 30. 3. FAA ARAC to Act as Regulatory Reform Task Force. The Federal Aviation Administration (FAA) tasked its Aviation Rulemaking Advisory Committee (ARAC) with evaluating whether any existing regulations should be repealed, replaced or modified, to comply with a February Executive Kirstein & Young PLLC / Attorneys at Law May 2017 — Page 1 Washington Aviation Summary Order. Criteria are those that eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; or create serious inconsistency or otherwise interfere with regulatory reform initiatives and policies. Initial recommendations are due June 1. 4. DOT Reports 2016 Air Fares Down 8.5%. The average 2016 inflation-adjusted fare of $349 was down 8.5% from $382 in 2015, the lowest since 2009, and down 26.1% from the all-time annual high of $472 in 2000, reported DOT. Unadjusted, the 2016 average fare of $349 was up 12.5% from the post-recession low of $310 in 2009, but down 10.9% from the peak of $392 in 2014. In recent years, airlines have obtained additional revenue from fees charged to passengers, and from other sources. U.S. passenger airlines collected 74.7% of total revenue from passenger fares during third quarter 2016, down from 87.6% in 1995; third-quarter data are the most recent available. 5. DOT Air Travel Consumer Report for February. Based on data filed by largest reporting carriers; tarmac data filed by all carriers. Feb. Jan. Full Year ‘17 / ‘16 ‘17 2016 2015 2014 2013 2012 On-time arrivals % 82.6 / 83.6 76 81.4 79.9 76.2 78.34 81.85 Cancellations % 1.5 / 1.6 2 1.17 1.5 2.2 1.51 1.29 Mishandled baggage* 2.16 / 2.64 3.40 2.70 3.13 3.61 3.22 3.09 Consumer complaints: Airline service 950 / 1,501 1,651 17,904 20,175 15,539 13,176 15,338 Disability-related 55 / 68 75 862 944 784 683 741 Discrimination** 5 / 7 12 94 65 68 79 99 Note: In February, airlines reported no tarmac delays of more than three hours on domestic flights and four of more than four hours on international flights. * Reports per 1,000 passengers. **I.e., race, religion, national origin or sex. Kirstein & Young PLLC / Attorneys at Law May 2017 — Page 2 Washington Aviation Summary II. AIRPORTS 1. ACI: Traffic at World’s 20 Busiest Hubs Up 4.7% in 2016. Traffic at the world’s 20 busiest hubs grew 4.7% in 2016, according to ACI preliminary estimates; with over 1.4 billion passengers, this group represents 18% of global passenger traffic. Atlanta remained the world’s busiest airport, with 104 million passengers, 2.6% more than 2015, followed again by Beijing and Dubai. Los Angeles moved from 7th to 4th rank, with 8% growth. Tokyo Haneda, in 5th place, saw growth of 5.5%. The world’s airports saw total passenger growth of 5.6%. Delhi and Doha, the 21st and 50th busiest airports, each achieved growth of over 20%. Cargo markets revived in second half 2016. Hong Kong remained the world’s largest air cargo hub, followed by Memphis and Shanghai Pudong. Doha moved from 20th to 16th rank with a jump of 20.8% in air cargo volumes. 2. St. Louis Lambert Accepted into FAA Airport Privatization Program. FAA accepted the City of St. Louis’s preliminary application for Lambert International to participate in the Airport Privatization Pilot Program. Lambert is the second medium hub airport to join the program. The announcement “demonstrates the Administration’s commitment to leveraging innovative financing strategies to revitalize our nation’s aviation infrastructure,” said DOT Secretary Elaine Chao. “As we’ve already seen in San Juan, this approach to airport management increases productivity, revenue and operating efficiency for airports, creating greater access to capital for infrastructure needs.” With the approval of Lambert Airport, the city may select a private operator to manage the airport, negotiate an agreement, and submit a final application to FAA for approval. “The privatization pilot program was designed to encourage innovative financing solutions, and we’re pleased that an increasing number of airport operators are participating,” said FAA Administrator Michael Huerta. 3. Construction Begins on $1.6 Billion LAX Midfield Satellite Concourse. Construction of the 750,000 square-foot Midfield Satellite Concourse (MSC) at Los Angeles International has begun. The $1.6 billion, five-level facility will include 12 new gates, dining and retail space and a 1,000-foot-long underground pedestrian tunnel with moving walkways connecting to the Tom Bradley International Terminal (TBIT). Buses will also be used to transport passengers between the concourse and other LAX terminals. Construction preparations entailed relocation of the airport’s rotating beacon, fiber communication infrastructure and FAA equipment to other parts of the airfield, and demolition of a former Trans World Airlines hangar. Opening is expected Kirstein & Young PLLC / Attorneys at Law May 2017 — Page 3 Washington Aviation Summary at end of 2019, said Deborah Flint, CEO of Los Angeles World Airports (LAWA). Delta is relocating from Terminals 5 and 6 to Terminals 2 and 3, where it is planning improvements valued at up to $1.9 billion over the next seven years. A total of 28 airlines are affected by the realignment, which began in January when American swapped four gates in Terminal 6 for four gates held by Delta in Terminal 5. After the move, Delta will operate 23 gates alongside partners including Aeromexico, Virgin Atlantic and WestJet. Delta has proposed a facility connecting to TBIT
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