It goes without saying that the Obama administration's top priorities will be the economy, the wars in Iraq and Afghanistan, national security and the staffing of hundreds of newly opened positions in federal departments and agencies. The new administration will, however, start reviewing and acting on certain aviation civil issues almost immediately and is expected to take a different approach on important matters affecting aviation policy and aviation industry segments than that of the Bush administration and even the Clinton administration. It is therefore worth an attempt, even at this early stage, to identify what changes may be expected as an aid to planning for the coming years.

U.S. International Aviation Policy

Concerns about loss of unionized airline jobs will likely weigh heavily on the new administration and Congress. Accordingly, the new leaders are unlikely to push strongly for further liberalization of traffic rights, and will not seek to expand trans-border transactions and capital flows, both of which were supported by the Bush Department of Transportation (DOT) and Department of State (DOS). The current efforts by the European Union (EU) and International Air Transport Association (IATA), the trade association representing the world's scheduled air carriers, to open markets and allow greater flows of capital across borders are likely to be thwarted. Mergers of U.S. and foreign carriers will not occur. Expansion of "merger-like" concentrations in the form of anti-trust immune alliances, favored by previous administrations, are more likely to be closely scrutinized by the Department of Justice (DOJ) and DOT in the new era.

US-EU Multilateral Air Transport Agreement, Stage 2 Negotiations

The current round of Stage 2 negotiations looking to further liberalize the U.S.-EU Multilateral Air Transport Agreement is likely to stall, if not fail completely. This will leave the EU with the choice of either suspending rights accorded under the Agreement or keeping that Agreement in place on a "better than nothing" basis. The latter course seems most likely, but a cooling of EU-U.S. cooperation on aviation matters may result.

Open Skies Agreements with China, Japan and Other Major Aviation Partners

The new administration may not press as vigorously for further expansion of Open Skies agreements if it follows a general pullback of the Clinton/Bush efforts to expand trade and reduce market entry barriers as an accommodation to the U.S. unions. This could have an adverse effect on current plans by major U.S. carriers to concentrate more of their assets on foreign markets for growth and profits.

Foreign Repair Stations

Look for a strong effort to force closer Federal Aviation Administration (FAA) review of Part 145 foreign repair stations as U.S. unions fight to keep maintenance jobs in this country with support from Congress.

Nationality Clauses

Efforts by IATA and EU to eliminate nationality clauses from U.S. and other bilateral air traffic services agreements are likely to be opposed by the new administration and Congress as posing a threat to U.S. unionized jobs through the de facto establishment of "flags of convenience," a development which some believe contributed to the weakening of the U.S. maritime industry.

Citizenship and Right of Establishment

The new Congress will continue to oppose any efforts to liberalize the definition of "citizen" in the Transportation Code, thus precluding efforts by the EU (particularly the UK) and IATA to enhance trans-border flows of capital and trans-border consolidations of air carriers. U.S. unions successfully fended off several efforts by the Bush DOT to allow greater foreign investment and involvement of foreign carriers in the commercial management of U.S. carriers. This opposition to change will be stronger in the new administration and the 111th Congress.


Advocates of permitting foreign carriers direct access to U.S. domestic markets, i.e., cabotage, which would require an amendment to the Transportation Code, will have no chance of success in the new administration or Congress due to union opposition.

Environmental Issues

Look for the Obama administration to uphold the recent U.S. protest launched formally against the European Commission (EC) for its decision to impose a "cap and trade" emissions trading scheme on all air carriers (and general aviation operators) operating in the EU, including foreign (i.e., U.S.) air carriers and operators, effective January 1, 2012. The U.S. position is that the EC's action is contrary to operating rights accorded by the Chicago Convention and is therefore illegal. The U.S. would prefer that International Civil Aviation Organization (ICAO) be the forum for setting global standards on emissions control for civil aircraft. The Obama administration will likely join in preferring a global approach to these issues.

U.S. Domestic Aviation Policy

The Bush administration's domestic economic aviation policy bordered on laissez faire, resulting in numerous airline bankruptcies and reorganizations, and in substantial concentrations of market power at hub airports, slot-restricted airports and in regions across the country. The price discipline on the larger carriers expected from new entrants and existing low-cost carriers has been lessened in recent years by high fuel costs and lack of capital. At present, there is now some debate as to whether the deregulation experiment begun 30 years ago will in the end work, or whether a form of quasi-public utility regulation of the carriers may once again be needed in order to guarantee minimum air services in certain markets and fares that consumers can afford which also provide a reasonable return for the regulated air carriers. The Obama administration will face these issues, as well as concerns about replacing an antiquated and inefficient Air Traffic Control system; addressing serious delays and congestion at key airports; ensuring that those employed in the airline industry are fairly compensated; and determining whether further concentration in the industry is to be tolerated without first establishing safeguards in the form of economic re-regulation to protect consumers and communities needing air services.

Structure of DOT/FAA

The Obama administration is unlikely to separate FAA from DOT, despite arguments that FAA would function better as a truly independent agency. Stripping FAA from DOT would leave the latter Cabinet-level department with few active components, with the DOT having already lost the Transportation Security Administration (TSA) and the Coast Guard to the Department of Homeland Security (DHS) post 9/11. The position of Secretary of DOT would, therefore, be even further diminished. On the other hand, establishing the FAA as an independent agency would allow the administrator, appointed for five-year terms so as not to be bound to a particular four-year administration, to be less under the control of one political party as intended and more dedicated to the technological and safety concerns that are the missions of the agency. It is also frequently suggested that ATC be removed from FAA and set up as a separate operating entity (government or private) in order to achieve greater efficiency and to lessen concerns about conflicts of interest in enforcement. That separation is also unlikely to occur. The Obama administration is on record supporting the strengthening of controller and other FAA unions' rights and bargaining powers, which would favor keeping ATC in FAA, and FAA in DOT.

Further Concentration of the Airline Industry

The recent "rush" by Northwest and Delta to obtain Bush DOJ and DOT approvals of their merger is a clear indication that key industry players believe that such further consolidations and increased concentration will not be as well-received by the Obama administration. The new leaders of the Antitrust Division in an Obama administration are much more likely to enforce the Horizontal Merger Guidelines than did their counterparts in the Bush era. Moreover, important Democratic leaders in the Congress strongly oppose increased concentration in the airline industry, because of fear of air service losses to smaller communities and because there is ample evidence that such concentration and market power lead to higher-than-competitive fare levels in many markets, particularly major hub-and-spoke city-pairs, while permitting serious barriers to entry in such markets by new entrants (which are likely to be fictional at least until the current economic crisis is well resolved). Unions also oppose mergers because of extraordinary difficulties in resolving seniority and pay-scale issues, and loss of discrete union members. These concerns will be well represented in the 111th Congress and in the Obama administration. However, do not expect opposition to acquisitions or mergers involving failing companies, e.g., AA's acquisition of TWA, or Air West's acquisition of US Airways—DOJ will make an exception under the "failing company" doctrine, and the new administration will support efforts to keep jobs to the extent possible in such transactions.

Greater Power for Labor Organizations

The unions have made the Employee Free Choice Act (EFCA) legislation their top priority, followed by a replacement of National Mediation Board members with those more friendly to labor. Under the EFCA legislation, supported by Senator Obama, unions could come into being on properties by non-secret card signing with 50% plus one vote. This approach to establishing union shops could have a substantial impact on companies such as Delta. Unions will also seek to recoup "give-backs" of pay incurred in recent years, particularly if the lower cost of aviation fuel starts to result in airline profits. In short, expect much greater union presence and airline properties activity, with enhanced power to threaten job actions and increasing labor costs offsetting any lowering of costs obtained from a reduction in the global commodity price for oil. The resulting inability of U.S. air carriers to project reasonable returns for newly invested capital may further delay acquisition of newer, more fuel-efficient and environmentally friendly aircraft to replace rapidly aging fleets.

Slot Auctions and Airport Congestion

The FAA's recent proposals and rulemaking to cap and auction slots at the New York airports will likely end abruptly with the Obama administration, assuming that current court challenges brought by the airlines are not successful in doing so beforehand. The proposals are strongly opposed by powerful Democrats in Congress, including the New York delegation. There are also substantial legal questions about the FAA's claims to a property interest in the slots derived solely from its regulatory authority over the navigable airspace and practical questions about its speculative impact of relieving congestion. The new administration will likely focus more closely on the NextGen ADS-B satellite ATC system replacement for the current ground-based ATC system, with a view towards accelerating the current 10-15-year plan for implementation. ADS-B shows promise for better use of the en-route segment airspace and for more efficient approaches and departures.

FAA and AIP Funding

Funding for NextGen and additional Airport Improvement Program grants for new airports and runways will be the Obama administration's chief challenge. The recent debates have ranged from privatization of the ATC, as an entity split off from the FAA allowed to set its own fees for use of the system, to a "user fee" system for all current NAS users, strongly supported by the airlines, but opposed by general aviation. The debates also focus on the extent to which FAA general operating funds should come from the Airports and Airways Trust Fund (funded by fuel and excise taxes) as opposed to general revenues, and how much of the Fund should be reserved for AIP capital expenditures on airports and ground facilities. Lastly, PFCs and other direct per-capita passenger fees have continued to rise. The Obama administration and Congress will likely be tempted to move forward aggressively on new technologies that promise more efficient uses of resources and address environmental concerns and provide new jobs. The tough questions will continue to center on how to raise the money—the airlines will push back on more fees and taxes, and general aviation will oppose user fees. ATC privatization (like NavCanada) will not happen, but general aviation will likely lose the battle to ward off user fees, at least for turbine-powered aircraft.

General Aviation

The most serious threats to general aviation arise from the poor state of the economy and loss of lead-based aviation fuel for the huge piston fleet. Manufacturers of general aviation aircraft are already cutting back on production or worse, going out of business completely, due to the failure of the capital markets and drop-off in demand. The same fate has met some of the new operators, e.g., DayJet's Eclipse 500 "individual, on-demand" VLJ service. The Obama administration will be mindful that general aviation employs over a million workers in this country, but it is unlikely to single out general aviation for special economic relief of the type being considered for the major automobile manufacturers. General aviation has always gone up and down with the business cycle, and may be expected to recover from this one without special help from the central government. However, environmental issues and, in particular, the possible end of avgas could have lasting effects. The Obama administration will need to be lobbied vigorously by AOPA, GAMA, NBAA, NATA and EAA working together so that "unintended consequences" of certain decisions do not unduly harm this aviation segment.


Most of the GA fleet is powered by 100LL avgas. There is currently only one manufacturer of the lead used in this gas—a company based in the UK. Avgas is also expensive to produce and requires special transportation to facilities. These considerations always weigh on its continued availability. Additionally, the Environmental Protection Agency (EPA) has recently lowered the permissible levels of lead in the atmosphere by a factor of 10 (one order of magnitude), putting states under a mandate to monitor known or suspected sites where lead is used. GA airports may therefore expect to be monitored in increasing numbers throughout the country over the coming several years. This development may also put avgas under pressure. It is unlikely that the Obama administration will take any action on either front to protect the continued availability of avgas for the GA fleet, unless it is strongly lobbied by the GA trade groups.

WAAS for GA Airports

The FAA has been expanding the availability of the Wide Area Augmentation System to permit enhanced GPS-based instrument approaches at GA airports at the rate of about 500 systems per year. These improvements have been strongly advocated by AOPA as a low-cost alternative to ground-based Instrument Landing Systems, which greatly add to the value and utility of GA airports. The Obama administration and Congress should continue to support and fund this effort.

VLJ "Revolution"

The state of the economy and the lack of capital have largely stalled the much-anticipated Very Light Jet "revolution" in which the ATC system was projected by some to be overwhelmed by personal, single-pilot jet operations or by DayJet-type VLJ charter flights. While Piper, Cirrus and Diamond are continuing to develop relatively inexpensive personal jet aircraft, the Adam 700 and Grob entries—and perhaps the Eclipse 400 and 500 aircraft—seem to be out of the running for want of funding. The Cessna Mustang and expected Embraer Phenom 100 types are being and will be produced, but these aircraft are quite expensive for individual users. In short, near-term concerns about excessive strains on the ATC system from VLJ operations will be unlikely to weigh on the Obama administration, which will more likely be focused on NextGen and other improvements to deal with ATC air and ground congestion.

Security Issues

TSA's recently issued proposed rule to put some 10,000 U.S. operators of 15,000 aircraft weighing more than 12,500 lbs. (i.e., most turbine-powered aircraft) under new security procedures as well as the airports used by such operators will potentially have serious and costly implications for a large and important segment of GA. It will fall on the Obama administration to take comments on, and issue final rules on, this expansion. It seems likely that the new administration will take the proposal seriously in line with its campaign criticism of the Bush administration's uneven approach to security concerns. Important Democratic members of Congress have been concerned about inadequate TSA screening programs. It is too early to predict whether the Obama administration will review the costly and wasteful Washington DC Air Defense Identification Zone and the aggressive use of "pop-up" TFRs that were a feature of the Bush Administration's security program.

Tort Reform

The Obama administration may be approached by members of the plaintiffs' bar about amendments to the federal statute (General Aviation Revitalization Act of 1994) immunizing GA manufacturers and equipment makers from product liability suits for damages caused by aircraft and equipment produced more than 18 years before the accident. Although the plaintiffs' bar has historically been viewed as strongly supporting Democratic candidates, it seems doubtful that the new administration would endorse such amendments because of the serious need to protect a viable GA manufacturing industry and related jobs in this country.

GA Purchaser Tax Incentives

At present there are aggressive depreciation and first-year write-off incentives under the Tax Code that are designed to promote the manufacture and sale of U.S. GA aircraft to business entities. These programs have been important to the manufacturing segment of the GA industry, making it possible for small businesses to acquire and obtain the efficiencies of modern GA equipment, such as the Cirrus line of single-engine, all-composite aircraft, which are becoming increasingly popular for use by air-taxi operators. We would expect such incentives to continue in the Obama era (e.g., the Cirrus aircraft are manufactured in Duluth, Minnesota, within the Congressional district of James Oberstar (D), Chairman of the House Transportation and Infrastructure Committee).


The nation's large airports will continue to battle for AIP funds to build and grow while smaller airports will fight to maintain air carrier services. Small GA airports, the vast majority, will be confronted with numerous issues, including possible new security demands imposed by TSA, possible loss of piston aircraft and FBOs due to environmental and avgas availability issues, and ever-increasing pressures by communities for alternative land uses. The large airports' growth and improvement projects may well benefit from initiatives taken by the new administration to use taxpayer money to help rebuild the infrastructure as part of an effort to create jobs and support the weakened economy, particularly if the demands on the budget imposed by the wars in Iraq and Afghanistan can be lessened. Important Democratic members in Congress are already talking about expanding the Essential Air Services subsidy program to maintain scheduled air services to smaller airports and communities that have lost, or may lose, flights as part of the recent cutbacks and from the Delta-Northwest merger. Maintaining small GA airports will continue to be a battle, as it is unclear whether an Obama administration will commit resources to maintaining the existing and still-large number of small fields, particularly if they are associated with environmental issues under the new ambient lead standards.

Large Airports

There is no doubt that the Obama administration will value and support a strong system of large airports throughout the country as part of its commitment to the maintenance and development of the domestic infrastructure and in recognition of the obvious and vital contribution that the large airports make to the economy and employment. Despite the current economy, FAA is still projecting huge growth in passenger traffic over the next decade, which will lead to congestion problems at 20 or more large airports (in addition to problems already being experienced at New York and other airports). Federally funded work in improving and expanding airports and developing new large airports seems to fall squarely within the Obama administration's domestic agenda. The questions will, of course, arise about funding and timing, but look for the new Congress to find the money if the economy still needs boosting by the time FAA appropriations for FY 2010 are on the table at the end of next year. If such projects are to help the current economy, some relief from environmental laws may also be required in order to get the work under way without extensive delays.

Smaller Airports

Many smaller airports offering scheduled services to larger hub airports have seen a reduction in, or complete withdrawal of, such services in the past year as regional and some EAS services have been terminated. Some services may be restored now that fuel costs have been reduced and turbo-props replace pure jets in some instances. Continued support for these airports in terms of AIP funds will likely depend on particular members of Congress (whose districts are affected) acting to make sure that they remain viable. The Obama administration should be readily approachable if the projects proposed provide jobs. There is also talk about expanding the EAS to maintain services, at least during the current downturn.

Small GA Airports

While small GA airports will continue to be threatened by all the usual forces (alternative land use and homeowner encroachments being the primary considerations), the continued availability of avgas and the risks imposed by the lowering of the ambient lead levels by EPA may become the deciding factors for many small GA fields around the country. Many small GA fields only exist because of the number of piston aircraft based at these locations. If the avgas is withdrawn and these thousands of aircraft are grounded, there would seem to be little likelihood that these facilities could continue based solely on the limited numbers of turbine flights at many such airports. Developing new, low-cost turbine engines or diesel engines for use in the existing and new fleet of small, GA aircraft will be a challenge. AOPA, GAMA, EAA, NATA and NBAA will need to make common cause to protect the base core of small airports by convincing the new administration to devote developmental funds to these projects and perhaps to revisit the ambient lead levels for small GA aircraft in the interim. These will not be easy sales without clear demonstrations of the importance of small fields to the transportation infrastructure and the maintenance of jobs in the industry. The new Congress has lost some of its stronger GA supporters, but there are still many who value this important part of the economy and the flexibility that GA provides to many persons, including campaigning Congressmen.