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TheStreet Open House

How Delta Plays Politics in Washington: Who Needs Eric Cantor?

Stock quotes in this article: BA, DAL, UAL


Anderson was also deeply involved in orchestrating a 2011 shakeup at A4A. One result was that the organization's costs rose substantially: CEO Nick Calio makes $3.6 million annually, while his predecessor made about a third of that. Some question the expense, but A4A appears to have been fortified in its battles with a dysfunctional Congress that continues to look to the airline industry for revenue.

In a sense, while ALPA plays offense, A4A plays defense. It has often been successful in keeping Congress at bay.

In 2012, A4A beat back a plan to tax airline emissions over European air space, winning unanimous Senate support. In 2013, when the sequester slashed government spending, A4A led the charge to get spending restored for air traffic controllers. This January, Congress devised a plan to add 2,000 Customs and Border Protection agents for various assignments, including about 40% at airports.

The plan was for airlines to pay the cost of all the agents, but A4A learned of the plan and reduced airline funding to airports. Anderson has remained A4A's key industry backer.

Boeing shares fell 3% in the three days following Cantor's loss; speculation was that Boeing and Delta might both suffer consequences. (Delta shares were falling 8% on oil price concerns.) But current thinking is that neither company will be hurt significantly. Bank refinancing "is still going to be approved," said a second Washington lobbyist, a Democrat involved in the airline industry, who also asked not to be named.

Delta may be the world's second-largest airline, but in terms of lobbying it is dwarfed by Boeing. In recent years, however, it has found allies in its battle against the bank. Those allies are Tea Party Republicans, who view the bank as a symbol of an overly large government. The Democratic lobbyist said that "reflects badly on Delta, (which must) distance itself."

Delta spokesman Trebor Banstetter distinguishes between the opponents. "We are not against reauthorization of the bank," he said. "We never have been. We are narrowly focused on financing for widebody aircraft, and even there we have said that it is because financing is offered to airlines that have access to commercial markets."

Cantor proposes continued bank financing for one year with a loan cap of $113 billion through fiscal 2013, a third of what the Senate has proposed, while the bank's role is studied. The proposal includes two provisions backed by Delta, one requiring high-level talks aimed at reducing the incentives the European Union provides for Airbus purchases, and the other requiring a detailed analysis of the economic impact of widebody purchases by foreign airlines.

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