NE WSBRIEFS For daily news stories, go to atwonline.com/dailynews
For daily news stories, go to atwonline.com/dailynews
Manufacturers | 10 Airline News 11-12 | NEWSBRIEFS
Trump budget seeks to reshape FAA, TSA
US President Donald Trump is proposing
to restructure FAA and the Transportation
Security Administration (TSA) dramatically, removing air traffic control (ATC)
from FAA and shifting the majority of
responsibility for funding aviation security
to airline passengers by significantly raising the flight ticket security fee.
The Trump administration’s “budget
blueprint” was released in mid-March
for fiscal year 2018 starting Oct. 1, 2017.
It calls for a 13% decrease, or $2.4 billion reduction, in the Department of
Transportation (DOT) budget compared
with fiscal year 2017. Included in the DOT
proposal is the administration’s support
for moving FAA’s ATC function to an independent, non-governmental organization
to make the system more efficient.
The White House’s backing for sepa-
rating ATC from FAA provides a power-
ful ally to proponents of such a plan,
including US mainline airlines with the
exception of Delta Air Lines, air traffic
controllers and House of Representatives
Transportation and Infrastructure
Committee chairman Bill Shuster
IATA offered its support for Trump’s
ATC reform proposal, saying it was time to
move forward with airspace transformation in the US through a separate, corpora-tized non-profit entity.
But another Trump budget proposal
is likely to be much less popular with
airlines. It would raise the US airline passenger security fee to recover 75% of the
cost of TSA aviation security operations.
The security fee, implemented after 9/11,
is $5.60 per one-way trip for all flights
departing from a US airport, and cannot
exceed $11.20 for a roundtrip ticket under
legislation passed in 2014. TSA has said
aviation security expenses totaled just
over $6 billion in fiscal year 2016, $2.2
billion of which was covered by offsetting
aviation security collections—well under
50% of costs.
Even if every dollar of flight-ticket passenger security fees (totaling $3.7 billion
in fiscal year 2016) were allocated to
airport security screening—which is not
the case now—there would be a substantial shortfall versus the 75% of costs the
White House is seeking. That implies that
the security fee hike would have to be
The blueprint, however, is essentially
just the opening salvo in a budget process that will be debated in Congress
through spring and could continue into
September. So changes and compromises
Delta buys additional 32% of Aeromexico for $620 million
Delta Air Lines has acquired an
additional 32% of Grupo Aeromexico’s
outstanding shares for approximately
$620 million, and now owns 36.2% of
Atlanta-based Delta, which already
owned a 4.2% stake in Mexico City-
based Aeromexico, acquired 228 million
additional shares at MXN53 ($2.71) per
share in the tender offer. Delta holds
options to acquire another 12.8% stake in
Aeromexico, so eventually it could own
49% of the carrier.
Delta and Aeromexico late last year
gained regulatory approval to establish
an antitrust-immunized joint venture
for transborder flying. Both carriers are
members of the Sky Team alliance.
Delta CEO Ed Bastian said the completion of the tender offer “is yet another
milestone that strengthens the Delta-Aeromexico relationship as we move
toward implementing our joint cooperation agreement in the second quarter.”
Boeing 737 MAX 8 certified; MAX 9 and Embraer E195-E2 rolled out
The Boeing 737 MAX 8, the first variant of the re-engined
737, gained FAA certification just two days after the next, the
MAX 9, rolled out from Boeing’s facility in Renton, Washington
That same day in São José dos Campos, Brazil, Embraer
rolled out the second E-Jet E2 variant, the E195-E2, marking the
unveiling of the largest jet aircraft ever produced in Brazil.
After a more than year-long flight test program with four
aircraft, FAA verified the 737 MAX 8 “design complies with
required aviation regulations and is safe and reliable,” Boeing
said. The MAX 8 is expected to enter service this summer with
Norwegian Air Shuttle. Dallas-based Southwest Airlines, which
placed the launch order for the 737 MAX, is expected to put
its first MAX 8 into service Oct. 1. American Airlines is also
expected to begin taking MAX deliveries this year.
The first flight of the 737 MAX 9 — which has a maximum
capacity of 220 passengers and a range of 3,515 nm — is
expected “in the coming weeks,” Boeing said. The 737 MAX 9 is
scheduled to enter service in 2018.
All MAX variants are exclusively powered by CFM
International LEAP-1B engines.
The E195-E2’s first flight is officially scheduled for the second
half of 2017, but the rollout occurred ahead of schedule and
“I would not be surprised if the E195-E2 does enter into flight
testing in the first half of 2017,” Embraer Commercial Aviation
president and CEO John Slattery told ATW.
Slattery believes the E195-E2 will be strongly considered as a
replacement aircraft by mainline airlines flying 737s and Airbus
A319s and by low-cost carriers seeking a cost-efficient option.
The first E-Jet E2 variant, the E190-E2, is slated to enter
service in the first half of 2018 with Norwegian regional
airline Widerøe. The E195-E2 will enter service in the first
half of 2019 with Azul Brazilian Airlines. Azul, which placed
the launch order for the E195-E2 at the 2014 Farnborough
Airshow, has 30 E195-E2s on firm order, plus purchase rights
for 20 more.