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TheStreet Open House

What Lee Moak Learned in Washington

Stocks in this article: BADAL

Delta CEO Richard Anderson said Moak realizes that "the real challenges for the U.S. airline industry are outside the borders of this country, where you have airlines that are government-owned or depend on governments for backstop financing and run a world-domination tour.

"We have two models: the Delta model, which doesn't get government aid, and airlines that don't care about profitability because they are economic development arms of sovereign governments," Anderson said, in an interview.

A major problem, the two leaders agreed, is that while the U.S. lacks a comprehensive airline policy, governments in other countries are intensely focused on financing and promoting the interests of their national airlines. For instance, several Middle East airlines rely heavily on government backing and the Japanese government bailed out bankrupt Japan Airlines.

Among ALPA's recent legislative efforts:

After the DOT adopted regulations imposing heavy fines on airlines whose aircraft sit on the tarmac for more than three hours, Congress considered including those regulations in the FAA reauthorization bill in 2012. But ALPA worked successfully to keep them out, because inclusion would have limited any ability for future modifications. Moak made the point that airlines are not typically responsible for tarmac delays -- an airport may lack facilities or infrastructure to allow unexpected passengers to disembark, or federal inspectors may not be available to process international travelers. Moreover, the regulations "have the tendency to usurp captain's authority and to have a negative impact on the airline industry," Moak said.

When the DHS announced last year that it would establish Customs and Border Patrol "pre-clearance" in the Abu Dhabi airport for passengers flying to the U.S., "We led the charge against that," Moak said. "No U.S. carrier even flies to Abu Dhabi -- it was there strictly to give a competitive advantage to a foreign airline." DHS has promoted the concept that it could establish customs pre-clearance stations in airports around the world. Language enabling the practice is part of a pending DHS appropriation bill, which is opposed by ALPA as well as the AFL-CIO, A4A, the Airports Council International and the Chamber of Commerce.

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