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June 2019 EDITION WASHINGTON AVIATION SUMMARY June 2019 EDITION CONTENTS I. REGULATORY NEWS .............................................................................................. 1 II. AIRPORTS ................................................................................................................ 4 III. SECURITY AND DATA PRIVACY ............................................................................ 6 IV. TECHNOLOGY AND EQUIPMENT............................................................................7 V. ENERGY AND ENVIRONMENT .............................................................................. ..9 VI. U.S. CONGRESS .................................................................................................... 10 VII. BILATERAL AND STATE DEPARTMENT NEWS ................................................... 13 VIII. EUROPE/AFRICA ................................................................................................... 15 IX. ASIA/PACIFIC/MIDDLE EAST ................................................................................ 17 X. AMERICAS ............................................................................................................. 18 For further information, including documents referenced, contact: Joanne W. Young Kirstein & Young PLLC 1750 K Street NW Suite 700 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. ©2019 Kirstein & Young PLLC. Washington Aviation Summary I. REGULATORY NEWS 1. IATA: Solid Passenger Demand Growth in April. Global passenger demand (revenue passenger kilometers) rose by 4.3% in April 2019, compared to April 2018, reports the International Air Transport Association (IATA). April capacity (available seat kilometers) increased by 3.6%, and load factor climbed 0.6% to 82.8%. Africa, Europe and Latin America posted record load factors. International passenger demand rose 5.1% over April 2018. All regions recorded year-over-year traffic increases, led by airlines in Europe. Total capacity rose 3.8%, and load factor 1.1% to 82.5%. Domestic demand rose 2.8% over April 2018, down from 4.1% growth in March year-over-year. The slowing trend is driven primarily by developments in China and India. China’s domestic traffic increased 3.4% in April, up from 2.8% in March, but below the 2016-2018 period when growth averaged 12%, reflecting the impact of the U.S.-China trade dispute and softening in economic indicators. India’s airlines’ traffic fell 0.5% year-over-year, due to the shut-down of Jet Airways; this marked the first time in six years that monthly domestic traffic declined compared to the year-ago period. Total passenger traffic market share by region: Asia-Pacific 34.4%, Europe 26.7%, North America 22.5%, Middle East 9.2%, Latin America 5.1%, and Africa 2.1%. Global air freight demand, measured in freight tonne kilometers (FTK), fell 4.7% in April, compared to same period last year, continuing the negative year-on-year trend that began in January. Capacity, measured in available freight tonne kilometers, grew by 2.6% year-on-year. Capacity growth has outpaced demand for the last 12 months. Air cargo volumes are 3% below the August 2018 peak. Export orders have increased month-on-month only three times in the past 15 months and the global measure has indicated negative export demand since September. Total freight traffic market share by region in terms of FTK: Asia-Pacific 35.4%, Europe 23.4%, North America 23.7%, Middle East 13.3%, Latin America 2.6%, and Africa 1.7%. 2. Boeing 737 MAX Update. The U.S. Federal Aviation Administration (FAA) met in Fort Worth with representatives of international aviation authorities to review Boeing 737 MAX issues, including: how FAA responded to the two MAX accidents and is supporting the investigations; how FAA plans to certify Boeing’s Maneuvering Characteristics Augmentation System (MCAS) changes; how it is sharing information with international regulators; details of Boeing’s proposed changes to the flight control system and pilot training; and technical steps and sequence of events involved in returning the MAX to service in the United Kirstein & Young PLLC / Attorneys at Law June 2019 — Page 1 Washington Aviation Summary States. The European Aviation Safety Agency said it will conduct an independent design review of the MAX. Chinese authorities indicated they will evaluate changes in design and training based on Indonesian and Ethiopian accident investigation results. IATA prefers that a single regulator determine airworthiness to avoid useless complexity and additional costs, said Managing Director Alexandre de Juniac. He urged strong cooperation among certification authorities, schedule alignment to avoid discrepancies and disruptions, and transparency to restore passenger confidence. IATA held a meeting in Montreal with MAX operators and plans another meeting with airlines, regulators and Boeing. Boeing completed development of the updated software and simulator testing, and as of May 16 had flown the MAX with updated MCAS software for more than 360 hours on 207 flights. Boeing has developed enhanced training and education materials, under review with FAA, global regulators and airlines, and is holding regional customer conferences around the world. The Joint Authorities Technical Review (JATR) team held its first meeting. Comprised of technical safety experts from NASA and nine civil aviation authorities, including FAA, the team is reviewing the FAA Certification/Organization Designation Authorization program associated with the MAX, regulations, compliance and training and will report findings and provide recommendations for improvement. Christopher Hart, a former National Transportation Safety Board (NTSB) Chairman, is the JATR Chairman. 3. DOT Tentatively Allocates New Tokyo Haneda Daytime Slots. The U.S. Department of Transportation (DOT) tentatively allocated 12 available daytime Tokyo Haneda slots to: American (Dallas/Fort Worth, Los Angeles); Delta (Seattle, Detroit, Atlanta, Portland, Honolulu); Hawaiian (Honolulu); and United (Newark, Chicago O’Hare, Washington Dulles, Los Angeles). In January 2019, U.S. and Japanese delegations tentatively committed to amending the U.S.-Japan aviation agreement to provide for up to 12 additional daytime opportunities for U.S.-carrier operations at Haneda. DOT expects the amendment to enter into force in time to permit the newly available U.S.-carrier services to begin with the start of the 2020 summer traffic season and in time for the 2020 Summer Olympics in Tokyo. 4. Costa Rica Assigned Category 2 Safety Rating. FAA announced that Costa Rica does not comply with International Civil Aviation Organization (ICAO) safety standards and has been assigned a Category 2 rating based on a reassessment of the country’s civil aviation authority. A Category 2 International Aviation Safety Assessment (IASA) rating means the country either lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards, or its civil Kirstein & Young PLLC / Attorneys at Law June 2019 — Page 2 Washington Aviation Summary aviation authority is deficient in areas, such as technical expertise, trained personnel, record-keeping, or inspection procedures. With a Category 2 rating, Costa Rica’s carriers can continue existing service to the United States but will not be allowed to establish new service. 5. DOT Air Travel Consumer Report for February. Based on data filed by U.S. scheduled carriers. Feb. Jan. 2018 2017 2016 2015 2014 ’19 / ’18 ‘19 On-time arrivals % 73.8 / 78.9 78.4 79.4 80.2 81.4 79.9 76.2 Cancellations % 3.1 / 1.9 3.1 1.6 1.5 1.2 1.5 2.2 Mishandled baggage* N/A N/A 2.78 2.41 2.70 3.13 3.61 Consumer complaints: Airline service 1,067 / 1,047 878 15,541 18,156 17,908 20,175 15,539 Disability-related 59 / 53 48 828 850 865 944 784 Discrimination** 14 / 5 7 96 98 95 65 68 Note: In February 2019, airlines reported 16 tarmac delays of more than three hours on domestic flights, during a major snowstorm at Seattle. There were no international flights with tarmac times of more than four hours in February. * DOT plans to publish revised 2019 mishandled baggage data in May. **I.e., race, religion, national origin or sex. Kirstein & Young PLLC / Attorneys at Law June 2019 — Page 3 Washington Aviation Summary II. AIRPORTS 1. Dallas Fort Worth, American Plan Sixth Terminal. Dallas Fort Worth International and American Airlines plan to develop a sixth terminal, with the airport investing up to $3.5 billion in construction of Terminal F, to open as soon as 2025, and upgrades to Terminal C. A site south of Terminal D provides flexibility for phasing in up to 24 gates at Terminal F as needed. Investment is expected to be financed by bonds and repaid through airline rates and charges over the life of the bonds. American opened 15 new gates in the Terminal E satellite, supporting 100 daily regional flights for American Eagle. The renovated space includes refreshed ticket counters and gate areas as well as new ramp lighting, moving walkways, elevators and escalators. American will open six mainline gates at Terminal B in June with new destinations to include Dublin and Munich. 2. Amazon Breaks Ground on CVG Cargo Hub. Amazon broke ground
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