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Airline Industry Makes Its Case at Democratic Convention

Stocks in this article: DAL LCC

CHARLOTTE, N.C. ( TheStreet) -- Tens of thousands of people visited Charlotte for the Democratic National Convention, and most of them flew in.

For Sean Kennedy, a lobbyist and senior vice president at Airlines for America, the airline industry trade organization, this is a good place to start a conversation as he buttonholes key convention participants to promote the industry and its causes. Kennedy, it should be said, is not shy, and this is probably among the most important prerequisites to be an effective lobbyist.

"There were three senators on my plane," said Kennedy, who flew from Reagan National Airport to Charlotte on Monday. "I chatted with two of them. I reminded them that they were going to have a great flight and that ticket prices are lower than they were 10 years ago" and that the airline industry is a major employer and could be an even bigger employer if it were not so heavily regulated.

Fortunately, the US Airways (LCC) flight arrived 15 minutes early -- an indication of the industry's continuing operational improvement. In the first six months of 2012, 84% of all U.S. flights arrived on time, the best record since the Transportation Department began keeping track in 1995. And in June, 99.7% of bags were properly delivered, the best June performance ever. These are the sorts of facts that Kennedy likes to mention to the people he meets in Charlotte.

A key event during the convention was a Wednesday transportation industry reception at the Charlotte City Club, hosted by A4A along with trade associations for the rail industry and the trucking industry as well as the air traffic controllers union. In addition, Kennedy said he attended state delegation breakfasts, where he chatted about industry concerns.

But the true value of the convention, he said, is that "the entire universe of Washington policy makers and state policy makers is converging on a small area. You cannot walk a few blocks without seeing a member of Congress, a key staffer or a "thought leader.'" Here we should add that the broad category of "thought leaders" can even include extremely minor luminaries such as airlines reporters.

A4A has a team of four representatives, including CEO Nick Calio, at the Democratic convention, just as it did at the Republican convention in Tampa, Fla. Calio has a background in Republican politics: He worked for both Bush administrations. But Kennedy has worked for Democrats since 1992, spending two years in the Obama administration before joining A4A. After all, he said, airline industry issues are bipartisan.

"We need to raise awareness of airlines, not only of the great service, but of how much better things could be if we had a national airline policy," Kennedy said. Among the industry's issues are these:

-- Congress is now committed to Next Gen satellite technology for air traffic control, replacing World War II-era satellite technology. Airlines want policies to enable them to begin using the satellite technology they already have on their planes.

-- Many airline tickets are still distributed through a few "global distribution systems," and these systems want the Transportation Department to mandate that airlines enable them to sell airline tickets. This is costly: Kennedy said the government does not need to select the airline industry's distribution systems.

-- Airlines would like relief from a system that makes them one of the country's most heavily taxes industries, as well as one of the most heavily regulated, with new regulations constantly being suggested. For instance, some members of Congress want legislation that requires airlines to carry each passenger's first checked bag free of charge.

-- The European Union wants to force all airlines that land in Europe, including U.S. airlines, to pay a tax on emissions. Under the plan, U.S. airlines would have to pay the EU $3 billion by 2020. Every major country outside of the EU is opposed. The airline industry wants Congress to file a legal challenge.

The A4A is not the only airline industry representative at the convention. Delta (DAL) also has a lobbyist at the event, pursuing a similar course to A4A's. And US Airways is "taking advantage of opportunities with the convention here in our hometown," said spokeswoman Michelle Mohr.

US Airways is a major contributor to the convention, according to media reports, which list the carrier as one of six companies, each with a major presence in Charlotte, that contributed a total of $20 million towards the cost of the event. Mohr said the carrier made a cash contribution of an undisclosed amount.

US Airways has said that having a convention in its biggest hub is nice, but has no particular financial benefit, because convention traffic will replace the usual business traffic.

>To contact the writer of this article, click here: Ted Reed

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