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The FAA Reauthorization and Modernization Act of 2012 Should be Welcomed by Airlines

February 15, 2012

For airlines the new legislation should be a welcome event. Authorization of funding for Federal Aviation Administration (FAA) through fiscal year 2015 is, itself, a major legislative accomplishment. Assuming the $63.5 billion in authorized funds are actually appropriated, FAA will be able to engage for multi-year planning and contracting with a measure of certainty not seen for many years. The establishment of a special NextGen manager and oversight board within FAA should help in directing the new resources on the much-needed modernization of the ATC system. The mandated NextGen development metrics and frequent reporting to Congress hold promise that the expected efficiencies for NAS users will one day be realized. The capping of PFCs at current levels and maintenance of the current tax structure and levels for funding FAA operations and AIP are also good news, but may soon be re-visited by Congress in response to federal debt-reduction initiatives.

The new legislation does burden the airlines with some additional operational reporting and employee training requirements, but these are limited. And the consumer protection provisions cover subject matter that the Department of Transportation has already dealt with by regulation under previous statutory language or has announced for rulemaking in the near future. Similarly, cockpit crew fatigue issues brought into focus by the Colgan crash are being addressed by FAA rulemaking.

Issues that held up the legislation have been compromised in a manner that should be acceptable to the airlines. The troublesome effort to require extensive FAA oversight of Part 145 foreign repair stations has been modified to take into account the valid interests of foreign aviation authorities in certifications and inspections. And the compromise amendment to the Railway Labor Act (requiring 50 percent group approval to organize, rather than the previous 35 percent) at least allows for one-half of the group to be organized to support union representation, notwithstanding the NMB's recent requirement that only a majority of those actually voting is needed for the final unionization vote. Lastly, the complex issues surrounding the carriage of lithium batteries on board aircraft have been addressed by U.S. deferral to ICAO standards, subject to possible higher U.S. standards if actual experience so requires.

On balance, then, airlines should find the new legislation a welcome development.