At the Washington Nationals baseball park, the National Air Traffic Controllers Association is flashing a banner ad that runs along the first and third base lines and under the scoreboard. It reads, “Air Traffic Controllers: We Guide You Home.”
True to their promise, air-traffic controllers continue to guide planes to and from their destinations despite a partial shutdown of the Federal Aviation Administration that has lasted 11 days and placed some 4,000 government employees on unpaid furlough and halted hundreds of construction and engineering projects.
All bravado aside, NATCA is apoplectic about the shutdown, watching more than 1,000 of its members go without a paycheck. “Don’t lose focus on the employees that are having to pay this price every minute,” said NATCA’s Mike MacDonald, who represents the units that have been laid off. Similarly, airport managers are in despair as they watch runway and tower projects go down the tubes. Airports Council International-North America has set up its own website listing airport projects that are stalled, some for a year or more.
Yet because the planes keep flying, neither passengers nor the airlines seem to have noticed that something strange is going on.
“We’ve not at our level seen impact,” said American Airlines spokesman Ed Martelle about the shuttering of FAA’s research and airport improvement activities.
“It’s not affecting us at the moment,” agreed Southwest Airlines spokeswoman Beth Harbin.
“There has not been an impact,” said United Airlines spokesman Michael Trevino.
US Airways referred me to the Air Transport Association, the official airlines spokesman in Washington.
ATA’s statement about the FAA’s partial shutdown was tepid in comparison to the “Oh, my God” reactions from airports and air-traffic controllers. “The ATA has long advocated for completion of a multiyear FAA bill, and we encourage members of Congress to expeditiously resolve their differences and pass a bill that moves the system forward,” said ATA spokeswoman Jean Medina.
The airlines are being slightly disingenuous about the impact of the FAA’s demise on their business. It actually has resulted in a small windfall for them. As soon as the partial shutdown commenced (at midnight on July 22), most airlines raised their ticket prices to make up for the lack of the 7.5 percent federal aviation tax.
“We adjusted our prices so that they were the same price as before,” said American Airlines’ Martelle.
“We did adjust our fares to account for that tax,” said Harbin of Southwest Airlines. “The ultimate price point is the same.”
“We matched other carriers who made changes,” said United Airlines’ Trevino.
A few of the smaller airlines took several days to catch up. Virgin America, Alaska Airlines, and Spirit Airlines all lowered their prices to account for the lack of a federal aviation tax as soon as the shutdown began. “We thought it was the most transparent and fair way to handle it with consumers,” said Virgin spokeswoman Abby Lunardini. By Monday, “given the dynamic nature of fares,” some of Virgin’s ticket prices increased again.
Outraged lawmakers have seized on the airlines’ pricing as reprehensible behavior, given the potential savings to customers. Their anger is somewhat disingenuous as well. Since the Airline Deregulation Act of 1978 took effect, airlines have been well within their rights to price their tickets at any point that a passenger will pay. But politics is politics, and airfare increases in the face of an FAA shutdown creates a public-relations problem. “We’re everyone’s favorite whipping boy,” Martelle said.
ATA has countered the criticism by offering data on this year’s big-time Washington bugaboo, federal taxes. From 2000 to 2010, the average round-trip domestic fare fell 21 percent, while the average federal tax for the same trip grew 37 percent, said ATA President (and longtime Washington insider) Nick Calio in a letter to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and Sen. Maria Cantwell, D-Wash. “It is not misleading to state that the excessive tax burden on the airline industry does depress consumer demand,” the letter said.
To make matters more confusing, the Internal Revenue Service has said that customers who have paid a tax on an airline ticket and then fly during the partial shutdown are entitled to a refund. The IRS and Congress want customers to seek that refund from the carriers, while the carriers say that the rebate is the government’s responsibility. Neither the airlines nor the government want the hassle of processing thousands of refund requests. But if the standoff on the overall FAA bill continues, they may have no choice.
Meanwhile, the enraged aviation contingent—the Transportation Department, air-traffic controllers, flight attendants, airports, mayors, construction workers, and others—point out that the loss of an aviation tax is costing the country $200 million per week. The airlines look aloof by comparison. They say that high fuel prices have cost airlines more than $1 billion just in this year’s first quarter and $55 billion over the past decade.
Baseball fans aren’t likely to know any of this, and perhaps it’s best that they don’t. “We’ll Guide You Home” is a more comforting message.
This article appears in the Aug. 2, 2011, edition of National Journal Daily.