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Document 7 of 110.

September 14, 2000, Thursday

SECTION: CAPITOL HILL HEARING

LENGTH: 28807 words

HEADLINE: HEARING OF THE SENATE COMMERCE, SCIENCE AND TRANSPORTATION COMMITTEE

SUBJECT: AIR TRAFFIC CONTROL

CHAIRED BY: SENATOR JOHN MCCAIN (R-AZ)

LOCATION: 253 RUSSELL SENATE OFFICE BUILDING, WASHINGTON, D.C.

WITNESSES:

RODNEY E. SLATER, SECRETARY OF TRANSPORTATION;

JANE GARVEY, ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION;

KENNETH M. MEAD, INSPECTOR GENERAL, DEPARTMENT OF TRANSPORTATION;

DONALD CARTY, CHAIRMAN, PRESIDENT AND CEO, AMERICAN AIRLINES;

LEON F. MULLIN, PRESIDENT AND CEO, DELTA AIR LINES;

CAPT. DUANE E. WOERTY, PRESIDENT, AIR LINE PILOTS ASSOCIATION INTERNATIONAL;

ROBERT POOLE, DIRECTOR OF TRANSPORTATION STUDIES, REASON PUBLIC POLICY INSTITUTE;

JOHN CARR, PRESIDENT, NATIONAL AIR TRAFFIC CONTROLLERS ASSOCIATION;

BODY:
SEN. JOHN MCCAIN (R-AZ): Good morning. This hearing will come to order.

At one time, our nation had what was considered the largest, most efficient aviation system in the world. Today, our aviation system has reached the almost untenable position of gridlock predicted by the National Civil Aviation Review Commission in 1997. As a recent Washington Post editorial pointed out, people are no longer scared of flying--they're scared of not being able to fly.

According to the FAA, there has been a 58 percent increase in flight delays over the last 5 years. Last year, flight delays were up 22 percent over the prior year. And unfortunately, the FAA has reported a 12 percent increase in flight delays over the first 6 months of this year compared to the first 6 months of 1999. We don't really even need these numbers. You only need to go to an airport or pick up the newspaper and read the horror stories of middle-America stranded in various airports around the country. As USA TODAY noted in one of its headlines, "Frustrated Flyers Now Expect Delays."

While flyers may come to expect these delays, no one seems to want to bear responsibility for them. It's clear that each segment of the aviation community, including the Congress, bears some responsibility for these problems.

The fact is the airlines tend to schedule their flights at the same time during peak periods, and often at levels that they know are greater than an airport can handle. A recent Department of Transportation Inspector General audit on flight delays pointed out that for one day in January, Newark Airport's scheduled arrivals exceeded the airport's capacity to handle them during four peak hours.

This year, more than ever, airline employees have caused enormous delays. Recently, the pilots at United have undertaken work stoppages to satisfy their personal greed. Last year, pilots at American engaged in similar tactics. And who bears the brunt of the stoppages? Middle-America. Average Americans plan for months to take a vacation, only to be greeted at the airport by cancelled flights and lost vacations due sometimes to pilot greed. These are people who can't afford to change their plans at the last minute and don't take flights that can be billed to a client.

In 1998, per capita income in the U.S. was $20,120. USA TODAY reported that the top pilots at United will make almost $342,000 per year in 2004 if the latest contract is ratified, or $355.84 per hour.

And you know what saddens me the most? A large number of these pilots are former military whose code is supposed to be "duty, honor, country." Now they take actions without a thought for the Americans that rely upon them to ferry their families across the country for a family vacation, attend a wedding, or be at the side of a sick relative.

I also recognize that one of the most significant problems is the explosion in air travel. The airlines now carry nearly 3 times as many passengers as they did when the industry was deregulated in 1978, and air fares are 40 percent lower when adjusted for inflation. Air traffic control has not kept up with this exponential rise in passenger traffic.

But this has not been an unexpected development. In 1993 - in 1993 - the Baliles Commission Report stated that "for too long, too many people ... have been spending too much of their time sitting on the ground in airplanes and not enough time flying in them."

The Commission called for further development of the Global Positioning System (GPS) and its expedient application to the air traffic control system. In 1997, the White House Commission also advocated the utilization of GPS and the advent of modernization as early as possible.

The FAA's modernization program was originally intended to be finished, completed, in 1993 at a cost of $12.6 billion. Modernization is currently not scheduled to be finished until 2012 at a cost of more than double that. The FAA's GPS-based system, the Wide Area Augmentation System (WAAS), has been significantly scaled back, is over budget, and is not scheduled for implementation until the end of 2002 at the earliest. These delays must be rectified and we must give much greater focus to modernization of the air traffic control system.

It is also clear to me that we need to pour new concrete and expand our capacity on the ground in order to handle the increasing number of flights. We are predicted to reach 1 billion air travelers in less than 10 years. According to the Department of Transportation Inspector General, in the last 5 years, only 3 new runways were put into service at our 28 largest airports. Unfortunately, some of the very passengers that are complaining about delays are going to have to get rid of the "not in my backyard" mentality and allow new or expanded airports to be built.

As I have outlined here, I don't believe that there is one particular solution to this problem. However, I do believe that we must keep the pressure on and remain vigilant in our efforts to meet this ever increasing demand and make our aviation system more efficient for the American people.

One additional comment I made. I think there's been some legitimate criticism. And I will look forward to some comment from Mr. Mead on this as to how the Congress has authorized and appropriated funding. In other words, has monies gone to smaller and less necessary projects in the name of pork barreling rather than to the places where they are most in need?

I know that is a difficult question for Secretary Slater and Ms. Garvey to address, but I think Mr. Mead might also do that in his testimony.

So if we in Congress bear responsibility for not using the proper priorities in wasting American taxpayer dollars and pork barrel spending, I think the American people need to know that as well. I thank the witnesses for coming.

Senator Rockefeller. I'm sorry, were you here first, Senator Bryan? I apologize.

SEN. RICHARD H. BRYAN (D-NV): You go right ahead.

SEN. MCCAIN: Senator Rockefeller, the ranking member of the aviation subcommittee.

SEN. JOHN D. ROCKEFELLER, IV (D-WV): Thank you, Mr. Chairman. I want to do something I do not usually do. And we have on our side a fellow named Sam Whitehorn. He has been here for a long time. And he wrote a briefing memo for our side and it was just an absolutely excellent memo. And I just want to say that.

Secondly, this is a complicated subject. And I think, Mr. Chairman, as I heard you at the end indicate, I think there is a lot of - we can finger point or we can solve. And I think our instinct is try to solve. And I agree with you. I think that in meetings I just did with Secretary Slater and others, there is a lot of blame that goes to us in Congress, that we have tended to ignore this subject and infrastructure and the rest of it just because it for some reason has not caught on in terms of acting policy. So we try to solve problems. And AIR-21 was part of trying to solve those.

But on the other hand, Secretary Slater, Administrator Garvey, Ken Mead, Don Carty, others, pilots, controllers, the airlines, all of them, they are the ones who really deal with this issue day-to-day. We like to criticize them. But again, I think this is a joint - I do not necessarily like to. But, I mean, it is generally a kind of shared responsibility that we have on this because it is incredibly important.

Of course, it is true the passenger complaints are at an all time high. There are a lot of reasons for that, having to do with weather and having to do with over scheduling which we need to talk about and our system. You know, we have not done anything about your system until very recently. And the question is, is that in time? We really do not have time to spend ten years, Mr. Chairman, building a runway - which is what it takes now - to replace some of the controller workstations. It should not take new laws and regulations for passenger satisfaction and I hope it does not. But on the other hand, airlines are going to have to really respond very, very well on that and treat passengers better.

So I would hope that we would not make this into a finger pointing session, but a problem solving session. And one of the things that I would love to see and this could not come from me. It would have to come from DOT, FAA, et cetera. But I would love to see a kind of a chance to get all of the parties together and to sit down and figure out how to do this, how to make this work, over scheduling, what is weather? What is the problem with construction in the five and ten years for these things that should not take that long which we have now done some of the money for. But how much of the money? And what are the problems? How can we all kind of react to them in a constructive way?

Having said that, I need to apologize because I am not leaving now, but I will be leaving before we get to Dr. Sue Bailey, David Plavin and Althena Joyner. All of them I strongly support, Mr. Chairman. I want to go on record saying that for confirmation. And I thank you for your courtesy.

SEN. MCCAIN: Thank you, Senator Rockefeller. Senator Hutchison.

SEN. KAY BAILEY HUTCHISON (R-TX): Well, thank you, Mr. Chairman. You have had quite a week and I appreciate the tenacity that you are showing and the hearings that have come under the purview of the Commerce Committee.

I am especially pleased that we are talking about the airline delays of this summer. I am pleased that we have both the panel from the government and the panel from the industry who will be able to talk about this because obviously the cause is not just one thing. Air traffic control and airport problems have been part of it, but certainly not all.

I want to commend the Secretary for calling a meeting when things got really bad to start talking about the problem and seeing what solutions could be done. I thought that did bring home to the industry that this is very serious.

And I want to say that in the second panel we will hear from the industry and talk about some of the things that are being done on a voluntary basis that I think are good. One is American is going to be rewarding managers and pilots for on time performance, giving them incentive bonuses. That is good. Also, American I am told is taking steps to ensure that delays at central hubs do not cause consequent delays throughout the system.

I was pleased to see that United announced that they were going to cut back on their number of flights to make sure that the flights they have will give the service to their passengers that they deserve. I think that is a step in the right direction because clearly it seems to me they are trying to schedule too many flights with too little equipment. And that squeeze will cause part of the problems with canceled flights.

I want to just say that I think part of the answer to this is better information to the passengers. Sometimes when I have been caught in this situation - and I certainly have many times this summer had the same delays that other passengers have felt and have missed events where I am the speaker which is very frustrating. Sometimes the airline will work with a passenger to tell them if another flight is taking off on another airline to the same destination. Sometimes they do not.

And I think it is very important that the airline inform the passengers when they know there is going to be a delay to give them a reasonable timeframe for the delay and to give them the information for alternative flights. Because I can tell you as a traveling passenger that I feel much better about the airline I am flying if they help me get on another airline to get to my destination. I am going to be a loyal customer to the first airline that went to that trouble.

So I hope that as we are looking at solutions here that information to the passenger is a big part of the answer.

So, Mr. Chairman, I thank you for calling this hearing.

SEN. MCCAIN: Senator Bryan.

SEN. BRYAN: Well, thank you, Mr. Chairman. Let me preface my comments by following up on Senator Hutchison's observations. I could not agree with her more. I think all of us understand that there are circumstances beyond the control of a carrier in which cancellations occur, weather related, mechanical problems. That is part of travel.

But nothing is more aggravating and frustrating than as a passenger you are not provided any information. You are not given alternatives or information continues to be posted on time. And when you race to the desk, you find out that the plane has not even left the city of its origin. Those are the kinds of things that are just totally inexcusable and frustration. You have ignited a hot button with me, Senator, when you talked about that. Because that really is very frustrating.

Mr. Chairman, let me thank you for holding this hearing. This is a hearing following a summer of frustrating flight delays, weather conflicts and a staggering amount of cancellations. Since becoming a member of the Senate, like most of my colleagues, I have made frequent trips between Washington and Nevada, virtually every weekend. I have traveled extensively, experienced as well as witnessed some of the frustrations that are increasingly a part of air travel and our over crowded skies. And let me just say parenthetically most of us would agree. This has been the most difficult and frustrating time in the 35 years that I have been a regular airline passenger. It is not just an incremental increase. It has been an exponential increase, at least in the number of flights canceled, delays, frustrations that I have experienced. And I think most Americans would share that perspective.

While serving on this committee, I have had the opportunity to address and take part in the enormous task of modernizing the airline industry.

Recently, we were able to pass AIR-21, enabling a significant amount of funding to facilitate the growth of our airports and the air traffic control system. This was a major piece of legislation that I believe will help in correcting many deficiencies that were evident this summer. But there are still a number of issues to address and much to be done.

Air travel has grown at a considerable pace and we now find ourselves when the amount of air space is becoming more and more restrictive. Passenger projections in the FAA have been a target for this growth. So we can only assume that future projections estimating the growth and the current 607 million passengers to an estimated one billion by 2010 will prove to be accurate.

This growth is coming at a time when the on time arrival rate is declining, dropping to 66.3 percent in June of this year to 70.9 percent from June a year ago. Undoubtedly, these numbers have been effected by the cancellation of the nation's largest carrier, United, with an on time performance record during this time period of 48.3 percent and an astounding 4,800 cancellations this summer.

Mr. Chairman, this is simply not acceptable. Congress must move faster and more aggressively to solve these problems to stem the tide of problems that the airline industry is facing in the wake of ever increasing passenger counts and frustrations that accompany them. It is clear to me that weather has been more severe this summer and was considered as a major contributing factor to recent delays. However, the FAA has estimated that 75 percent of the delays is a result of weather this summer. But this is only slightly higher than 1999 when the weather was much less severe in many parts of the country.

Taking this into account, it is apparent that other factors including over scheduling, significant travel growth and disputes over contracts with United and ALPA and both airport and flight path congestion were possible contributing factors. The largest problem we face is current capacity. Our current ATC system desperately needs to be modernized. And we seem to be headed in that direction as funding becomes more available.

Mr. Chairman, I once again want to thank you for your perseverance and your efforts for providing leadership on this issue. And let me just conclude, this is not just a question of convenience and frustration. The airline infrastructure in America are parts of the vital arteries of commerce which make for our country's economic prosperity. Some of us are in states in which that airline travel is an absolute indispensable part. Thirty-five million Americans visit my home town each year in Las Vegas. More than 50 percent do so by air.

So it is not just a question of frustration. That is certainly a major part of it. But this is an important part of our economy. We must do a better job. And I look forward to working with you, Mr. Chairman, and others on this committee in trying to seek solutions to this situation.

SEN. MCCAIN: Thank you, Senator Bryan. Senator Cleland.

SEN. MAX CLELAND (D-GA): Mr. Chairman, I would just like to echo Senator Hutchison's thought that this has been an incredible week for you and this committee to tackle this week the Firestone tires, Ford suburban vehicle question. You have tackled violence in the media targeted at children. And now you are tackling airline delays. And it is not even Friday yet. So we admire your tenacity and being part of this panel.

SEN. MCCAIN: Thank you.

SEN. CLELAND: Mr. Chairman, let me just say that strong storms in the midwest this week grounded almost 500 flights just at Chicago O'Hare alone and stranded thousands of passengers. This is just the latest incident in maybe our historic long hot summer which the FAA has called the worst travel season in U.S. airline history. In a sense, the problems we will discuss today are an offshoot of our aviation success.

Deregulation in 1978 transformed air travel actually from a specialty thing that occurs in your life into mass transportation. And we know with mass transportation of other forms, after a while you get gridlock and choke points. Pure and simple, America can afford an airline ticket. As a result, since deregulation, we have seen the number of Americans choosing to fly increase by some 300 percent. And the real cost of fares has actually dropped some 40 percent.

So 650 million people boarded planes last year. Wow. By 2009 though, the FAA has figured that that number will skyrocket to an incredible one billion passengers. That is incredible. Most of that increase is expected to occur at the country's just 28 largest airports. Welcome to choke point.

Unfortunately, our capacity has not kept up with this surge in air travel. The alarm was sounded some three years ago by the National Civil Aviation Review Commission's landmark report. It says, "Given the delay and congestion problems that already exist, anticipated growth without needed expansion of capacity in the air and on the ground will simply reach a point at which it cannot be accommodated.

Mr. Chairman, I think we are fast reaching that point. Some may attest that that choke point is already here, especially in the northeastern corridor. Air space is approaching gridlock. My latest flight on a great airline, Delta, left on time, sat on the runway, took off in weather, circulated around Harts Field, attempted to land. But there was a plane on the runway and had to make another turn around.

That, unfortunately, is becoming more and more the norm in terms of transportation in this country. On the ground, we have built only one major airport in the last 25 years. And from 1995 to 1999, only three new runways have been put into service at the 28 biggest airports in the country.

My home state in Georgia, we have the world's busiest airport, 78 million passengers annually. Harts Field is the country's most delay impacted airport. It both creates delays nationwide and reacts and is impacted by delays nationwide more than any other airport in the world.

The bottom line is that Harts Field desperately for one thing needs a fifth runway, more air traffic controllers certainly, but definitely a new runway. We have to expand capacity or we will be that nationwide choke point.

In 2005, with 100 million passengers projected to go through Harts Field, and with just four runways, it is estimated each flight at Harts Field will average 14 minutes of delay. That is programmed. That is planned. Double the average today. Most Americans are getting used to circulating around Harts Field and taking the tour of Atlanta from about 12,000 feet.

Now, with the construction of the fifth runway, it is estimated that Harts Field will be down to five minutes of delay. But that is planned delay. That is not zero delay. It is a savings of nine minutes per flight. It is going in the right direction. And it will save hundreds of billions of dollars and it will benefit passengers not only in Georgia but around the country. So we need that.

The problem is much bigger than this. We should not be getting into this blame game. I just appreciate Secretary Slater's initiative to bring parties to the table as we discuss this and met with the traveling public, the airlines, in Atlanta at Harts Field. I appreciate that very much. That meet occurred recently.

Today, Mr. Chairman, we will hear some of these suggestions from our witnesses as how to move beyond gridlock, how to avoid choke points, terms that we normally apply to interstate highways. But now in the interstate highway of the air, these terms are more and more applicable. Let me say that I am extremely pleased that my dear friend Leo Mullin, the great head of Delta Airlines, is an extremely perceptive policy person and a consummate businessman. Under his leadership, Delta's now the world's most flown airline, working out of the busiest airport in the world.

Last year, Delta flew a record 106 million passengers safely and with its customers in mind. I have been a Delta passenger all my life. My interest in air safety is that I would like to extend my life.

So, Mr. Chairman, I thank you for holding this important hearing. And we look forward to our witnesses.

SEN. MCCAIN: Thank you very much, Senator Cleland. Thank you for your kind words. Welcome to the witnesses. Secretary Slater, thank you for being here today.

SEC. RODNEY E. SLATER: Thank you, Mr. Chairman, Senator Rockefeller, Senator Hutchison, Senator Bryan, Senator Cleland and the other members of the committee that I am sure will join us over the course of today's hearing.

Mr. Chairman, members of the committee, I and my colleagues appreciate the opportunity that you have afforded us to come and join other leaders of this magnificent industry as we discuss the importance of the service that we provide to the traveling public. And as we deal with the critical issue of unacceptable airline delays and cancellations and customer service problems that are now of the matter at hand accompanying me today are FAA Administrator Jane Garvey and also our Inspector General Ken Mead. And again, we look forward to the discussion that I am sure we will have over the course of today's session. Let me also, Mr. Chairman, commend you for the work of the week and the work of the committee. I have been here on one occasion over the course of the week.

SEN. MCCAIN: We are sorry we missed you yesterday.

SEC. SLATER: Well, I had to rest up for today after the day that I was here just prior to yesterday. So I am back today. And again, I am pleased to be here with my colleagues.

Mr. Chairman, last evening I was at the National Air Space Museum, there for a special dinner, but just above me was the Wright Brothers flyer and to the left as I recall the Spirit of St. Louis. And overhead, some hundreds of miles, Lieutenant Colonel Dan Burbank who is a member of the flight team of the space shuttle Atlantis as they now work on the international space station and prepare for permanent presence on that space station in but a few years to come.

Really, that is the context in which then we have the opportunity to deal with the challenge at hand, recognizing that over the span of less than a century, man took to the wings of flight and now we construct an international space station in outer space.

At the dawn then of this new century and new millennium, we together-government and industry, management and labor - just as we together in years past can build on the tremendous economic success that we have brought into being and also implement our flight plan for aviation's second century. With a focus on passengers first, their safety and security to be sure, but also the quality of service they receive.

Many of you have made reference to the fact that a few weeks ago leaders of the industry responded to my request to meet here in Washington to discuss this issue. And I want to just underscore the fact that all who were invited came. All sat at the table of discussion and debate, aired our concerns and left with a commitment to put passengers first, to deal with matters pertaining to their safety and security, but also to deal with this issue of the quality of service they receive.

As we face then this second century of aviation, three broad areas really challenge us, and one I am going to deal with specifically over the course of my remarks.

But first the challenge of continuing to open markets and access to new destinations around the world. We are working to do just that. The challenge of enhancing access and competition in the aviation marketplace. This committee has worked with us and with the industry to do just that. And also, the challenge of improving system efficiency and capacity. This committee has also worked with us to deal with this important issue. And it is the subject of our discussion for today as we will continue to deal with the challenges we face in that regard.

But clearly, this industry is in a different position than it was in, not only at the time of deregulation in 1978, but also at the time that we had our opportunity to begin our work together.

When President Clinton and Vice President Gore took office in 1993, the U.S. airlines were collectively losing literally billions of dollars, some $10 billion over the previous three years, the first three years of the 1990s. The aviation industry was on the verge of slipping into an economic abyss.

President Clinton traveled to Washington State to meet with airline industry and labor leaders almost immediately upon taking office. The President and the Vice President advocated the creation of and the purposes espoused by the Baliles Commission that has been mentioned to ensure strong competitive airline industry. That was in 1993. Soon thereafter, the White House Commission on Aviation Safety and Security in 1996, and then the Mineta "National Civil Aviation Review Commission" in 1997.

And you are correct, Mr. Chairman, that all of those commission reports started to deal with the challenge that we come today to really grapple with first hand, that of gridlock.

We know then where we stand and the distance over which we have come. Eight years ago, we focused almost solely on the health of the industry, and, of course, on continued safety and security.

Today the industry is back on its feet with six consecutive years of growth, safety records that continue to improve, carriers are experiencing record level passenger demand and revenue growth. We have focused on opening new markets abroad and opening new access at home to more and more travelers across our nation.

We met the Y2K challenge. We got modernization back on track. We implemented our Spring/Summer plan and we have learned a lot from that experience. And we also successful worked with this Congress, and especially the leadership of this committee to successfully enact one of the most comprehensive and significant aviation bills in recent history a bill that will provide record level infrastructure investment and that also provides management reforms and also other reforms that will be important to our endeavors.

Here let me take the opportunity, Mr. Chairman, to especially thank you and ranking member Hollings and also the subcommittee chairs, Chairman Gordon and ranking member Senator Rockefeller and all the members of the committee for the wonderful leadership that you offered in helping us move forward, again, AIR-21, and to now have the opportunity to use the tools that it provides.

Let me acknowledge also that, as has been stated, there is responsibility for all, shared responsibility, by government, the airlines, the airports, and others as we gather to deal with the challenge at hand. And we want to clearly step to the table, step to the front line in underscoring the important role that the Department of Transportation has to play in this regard and especially the FAA in addressing the institutional and operational aspects of our air traffic control system.

And here I want to commend Administrator Garvey and her team working with the industry and really getting our modernization efforts back on track after a very significant decision frankly made early in this administration to change course. And we commend the leadership at that time as well.

In summary, Mr. Chairman, let me just say that the FAA and the department's strategy has been to focus on strategic issues, modernization of the air traffic control system in incremental fashion and on infrastructure growth. We have also focused on more efficient operations such as Free Flight Phase I and II. Hopefully, we can get into a fuller discussion of these issues as we go forward.

Administrator Garvey has also implemented an approach, an approach supported by industry and labor that has been successful as well, to build a little, test a little and deploy a little as relates to the awesome challenge of modernizing our air traffic control system.

And here if I may, let me just say that in our in route centers, the equipment that we are using today is no more than two or three years old. This is equipment that was installed in 1997, most of it no later than 1996, any remaining portion of it.

Also, earlier this year, we announced the Spring/Summer plan. And again, I think that that has worked very, very well. The FAA has worked with NATCA and the airline industry in identifying "choke points", most of those east of the Mississippi We have talked about some of those over the course of the morning and I am sure we will get into that a bit more as well.

And then, Mr. Chairman, closing with this, as a result of the meeting that was held here in Washington some weeks ago that has been referred to, I have asked our Associate Deputy Secretary Stephen Van Beek to head up a task force on airline service quality performance that will draw on many areas of the Department to produce an action plan over the next few months. This deals with really bringing a sense of community and understanding around how we measure the performance of the aviation system. And we hope to be successful in that regard.

I have also asked Assistant Secretary Francisco Sanchez to put together a report dealing with best practices. Many of you have mad reference to the leadership provided by many companies, some here today, in dealing with the passenger service needs. We want to lift those up as well so that they will become commonplace practices by the entire industry.

Also, Administrator Garvey will continue to work with the industry to finalize our vision for modernization as we go into a new century and a new millennium and we look forward to those efforts as well.

Later today, I will be meeting with members of the Air Transport Association Board of Directors. We will continue our work.

But, Mr. Chairman, let me just conclude by saying we have brought the industry a long way, working together with the leaders of the industry. There are challenges that we face. But these challenges in many respects are the result of the success that has been brought about by a strong industry that now enjoys record level resources, record level demand that it must respond to.

Clearly, if the Wright Brothers could put man into flight, and clearly as our team now makes provisions for putting individuals into the far reaches of space on a permanent basis, we can deal with the ground level. And even the air level challenges that we face to ensure improved service to the American people.

And again, we thank you and the members of the committee for affording us this opportunity to come and discuss this very important issue.

I will be pleased to respond to any questions that you may have after we hear from other members of the panel and over the course of our work in the future together.

SEN. MCCAIN: Thank you, Mr. Secretary.

Ms. Garvey, welcome back before the committee.

MS. JANE GARVEY: Thank you. Actually, the Secretary has given the statement. I think I will defer to Mr. Mead.

SEN. MCCAIN: Okay. So you have no opening statement?

MS. GARVEY: No, I will be glad to answer any questions.

SEN. MCCAIN: Thank you. Mr. Mead.

MS. GARVEY: I would be happy though to answer questions.

SEN. MCCAIN: I do not think we will let you go scott-free. Mr. Mead, welcome back before the committee. How many years have you been appearing before this committee, Mr. Mead, out of curiosity?

SEC. KENNETH M. MEAD: I think 1986, 1987, a number of times. I was going to say it is always an honor to appear before this committee. And it is also an honor to be here at the table with my colleagues, Secretary Slater and Administrator Garvey. And not just because of their positions, but because of their openness to oversight and willingness to discuss and air the problems.

The topic of the hearing today, Mr. Chairman, as a matter of fact, we have discussed many, many times. And I am sure we will discuss it many more times.

The first seven months of 2000 experienced record levels of delays and cancellations. I think we all know that. On the front page of my testimony, I have included a chart. It shows by month delays and cancellations in 1999. That is not why I included the chart though. I included it because it shows that we have a small window of opportunity before the cycle begins again late this fall, early this winter. So we have about three months. September comparatively speaking is supposed to be a good month for delays and cancellations.

The Secretary highlighted a number of important initiatives. And I think the common thread in all those initiatives is people coming to work together. We testified several weeks ago about the - it was almost a blame game going on. And I think the Secretary forcefully took that in hand. And that is an important common thread.

Now, an overarching point I would like to leave with the committee today is that the potential for the initiatives that Secretary has announced and the efforts of the airline industry will be greatly constrained until a key question is answered.

That question is what traffic load can the system reasonably be expected to handle in the immediate term, now, going out about two years, intermediate term (next 4 or 5 years) and the longer term (8 to 10 years)?

And specifically, what I mean is what is the departure and arrival rate by time of day at your top 30 airports that under good weather conditions can be accommodated without experiencing major delays or compromising safety? I am not suggesting in any way that there should be scheduling controls. But for the benefit of everybody concerned, after the experience of the last several years, we need a set of capacity benchmarks to understand the impact of airline scheduling and what relief can realistically be provided by the ATC modernization effort, new controller procedures and new ground infrastructure in the near and longer term.

FAA can speak to this today. I think they are within a couple of months of being in a good position to announce that publicly. But we need it to get at the core issues and to work through solutions. They are going to announce what?

MR. MEAD: Capacity bench marks, by airport, by time of day, for your top 30 or so airports. And I am saying I think FAA, from my discussions with Administrator Garvey and others will be in a position to do that within the next couple of months.

SEN. MCCAIN: Is that true, Ms. Garvey?

MS. GARVEY: Yes, it is, Mr. Chairman. And we agree fully with Mr. Mead and are working very hard toward that. It is very important information to have.

MR. MEAD: Now, the relevance of this in the timeframes I mentioned, immediate, intermediate and long-term, is this. New runways or technology that may be in place in five or ten years holds promise for the future, but it offers little bottom line relief now. I also believe that FAA needs to clearly explain the extent to which this ATC modernization effort can realistically be expected to provide material relief.

I know as everybody has said that the answer lies in a cumulative mix of interdependent solutions. And the role of the ground infrastructure cannot be understated.

I would like to offer, Mr. Chairman, several databased observations to illustrate just how serious the situations has become.

We reported in July that last year one in five flights arrived late. Each delay averaged about 50 minutes.

When cancellations are added to that, it is nearly one in four flights, either arrive late or were canceled.

The number of flights with taxi-out times of one hour or more has increased 130 percent over the past five years (from 17,000 to nearly 40,000 flights.

To compensate for growing delays, the airlines have expanded their flight schedules on nearly 80 percent of their domestic routes over the past decade, ranging from 1 to 27 minutes. And the reason I mention that is that these expanded schedules also reflect system inefficiencies that do not show up in the delay and cancellation statistics.

And as you know, for the first seven months of 2000, the trends have gotten worse. The top chart here shows that for the first seven months of 2000, 11 percent more delays than in the same period in 1999. The average delay is now about 53 minutes. So a three minute increase in just one year.

And between January and July, over 870,000 domestic flights either arrived late or were canceled. That does not count August. And that affected about 90 million passengers.

Now, Mr. Chairman, the increasing number of delays and cancellations are occurring against the backdrop of a remarkably safe system but it is one that is showing signs of strain.

I think the committee should know that FAA is reporting very significant increases between 1995 and 1999 and into this year in both runway incursions and operational errors. I think they are disturbing trends. FAA has actions underway to deal with them. But the trend lines still are disturbing.

Some data on that.

Runway incursions, which as you know, are incidents on the runway that create a collision hazard. They have increased 34 percent (from 240 to 321) between 1995 and 1999. In the first 8 months of 2000, there were 288 runway incursions. If that trend line continues, the year 2000 will be a record year for runway incursions.

Operational errors. They occur when a controller does not ensure that separation standards are maintained between aircraft. Operational errors have increased 23 percent (from 764 to 939) between Fiscal Years 1996 and 1999. In the first 11 months of Fiscal Year 2000, were slightly over 1,000.

SEN. MCCAIN: Does that correlate with increased traffic?

MR. MEAD: I think to a degree it certainly does, Mr. Chairman. I have a list with me of the different facilities in our system. And you would recognize their names. Mostly in the route center and terminal environments.

I would like to talk about the ATC modernization effort for a moment. I think there is a great deal of confusion over the extent of relief that the modernization effort can be expected to provide.

Congress, industry and the traveling public need to know what can be realistically expected from these investments. Much of the modernization effort is geared to replacing aging equipment with modern equipment that is easier to operate, maintain and is more reliable. But they do not in and of themselves provide capacity enhancements.

And there has been a number of important successes with those efforts. For example, at the en route center, Mr. Chairman, much of the equipment there is new. It is not antiquated. It is two or three perhaps four years old. There is a lot of good going on, particularly I think in the last four or five years after we got over the AAS, the microwave landing system that set things on the right track.

The Free Flight program which is about $700 million in cost is now the agency's key effort for enhancing capacity through 2004. That is an important initiative, but it will provide incremental capacity improvements once fully deployed. And that full deployment will extend out to the 2005, 2006, 2007 period. But I think it would be a mistake to view that as a panacea.

And I think the extent of the impact of the capacity initiatives at FAA do need to be quantified so we all know what can be expected. And I think that is very important because the projections of what lie ahead. What FAA has been experiencing over the past several years, two big caveats.

One is that as they make a dent in the capacity or the delays, the demand fills it up. It is like filling up a glass. As soon as you empty out some of the water, you pour more back in. And it is almost as though we are treading water. Another is all these planes in the air, you have to have a place to put them. And you cannot under estimate the importance of the ground infrastructure.

I have a chart at the back of my testimony. It shows 13 of 15 runways under construction or a plan at major airports. You cannot count on those except within the next three years. It is going to be between three and seven years before you have those.

And finally, as illustrated by Mid-America Airport, which is intended to be a reliever to Lambert Field - Lambert Field, by the way, has had a record of runway incursions that they are trying to deal with. But still it was number one in the country for a while. Mid-America cost in the neighborhood of $300 million. It is a new commercial airport. I guess next to Denver, it is the second new commercial airport. But just establishing an airport out there does not guarantee its use.

So I think with that, I will conclude my statement. Thank you, Mr. Chairman.

SEN. MCCAIN: So it is not a field of dreams?

MR. MEAD: No, sir.

SEN. MCCAIN: I thank you very much, Mr. Mead. I thank the witnesses. Ms. Garvey, Mr. Mead makes the point that we as Americans have a right to expect to know what to expect. In other words, tragically, the modernization program was originally intended, as I mentioned in my opening statement, to be finished in 1993 at a cost of $12.6 billion. Now it's about double and we are still some time away. Perhaps you could give us briefly your projections. And second of all, maybe you could provide in writing for the committee some very much more specific detail at your convenience. Please.

MS. GARVEY: Mr. Chairman, thank you very much. And I would be happy to do that. First of all, the Secretary mentioned the decision in 1994 to scale back the AAS. That was a very difficult decision, I know from my predecessor, for Mr. Henson and Linda Daschle. But it was the right decision. And I think it did lay the groundwork for the approach we are taking which is the building block incremental approach.

Secretary Mead mentioned that in 20 of our centers we have the most up-to-date hardware and tools for the controllers. That is right. Those are the platforms that we can use to add the capacity as Mr. Mead suggested.

SEN. MCCAIN: He suggests actually that these do not necessarily mean an increase in capacity.

MS. GARVEY: He is absolutely right. And I will try to even be clearer than that. It is the platforms. You have to have the foundation or the platforms in place. That is what HOST does. That is what DSR does. It is the platforms.

So as we move forward with Free Flight Phase I and Free Flight Phase II, we can add the capacity. So we have the platforms in place at the centers. We are focusing on the terminals now going at it step-by-step, building block-by-building block.

Mr. Mead also suggested, which I am in full agreement, that we need to measure what are the capacity benefits to the technologies that we are putting in with Free Flight Phase I.

SEN. MCCAIN: When can we expect Free Flight Phase I?

MS. GARVEY: Free Flight Phase I is underway now. It is being deployed now. It will be in place by 2002. I am pleased to say we have met all of the benchmarks. But again, just to -

SEN. MCCAIN: Right now, what percentage of flights in America are free flight - commercial aviation flights?

MS. GARVEY: Very few, Mr. Chairman. And that is again tying in with what Mr. Mead said. It is incremental. The fuller deployment nationwide is more a part of Free Flight Phase II. And as he suggested, that is 2002 and beyond.

SEN. MCCAIN: What can I expect by this time next year, what percentage?

MS. GARVEY: I would like to get back to you with an actual percentage. I can tell you that what Mr. Mead suggested measuring the benefits to it is what we are doing with the airlines. We have got a pretty straight forward contract with the airlines which is we will deploy it. You help us measure it. Tell us where it is working. Tell us where it is not.

One quick example. In Dallas/Fort Worth where we have PFAST, which is the conflict probe, we have been able to increase the arrival rates about five per hour.

But Mr. Mead is absolutely right. These are incremental. These are step-by-step. And we agree that sort of laying out, that in very clear fashions what those capacity enhancements are is important.

SEN. MCCAIN: We have people like FedEx that are installing their own equipment.

MS. GARVEY: That is right, Mr. Chairman.

SEN. MCCAIN: Is that one way that we can?

MS. GARVEY: I think that is a wonderful way. We have got a lot of work underway with the cargo industry right now, with some technologies that they are putting in place. Our challenge and the airlines are right to push us on this which is make sure our procedures are ready.

SEN. MCCAIN: Do you believe that we should consider - and I emphasize the word consider - the privatization of the air traffic control system?

MS. GARVEY: Well, certainly, Mr. Chairman, from our perspective we have put two proposals forward. One was the government corporation. The other was a performance based.

I think it is the right debate to have. I know there are a number of questions associated with any of those proposals, but those I believe are the right debate to have, included in AIR-21 which I think is going to be very - I think holds a lot of promise - was the provision that allows us to enter into a public/private partnership with airports.

And also included in that could be some airlines to do some public/private capital investments. We are excited about that. We have got that in the Federal Register and getting some comments and our guidance and expect to get some applications we hope by the end of this year.

So I think all of those are the right - hold some potential and certainly the issue about how best to handle air traffic control I think is the right debate. I thought the government corporation and the PBO certainly had a lot of promise. But we certainly appreciate all we got in AIR-21 and before that, CEOO and the ability to put in place the oversight board, tremendous help to us.

SEN. MCCAIN: Mr. Secretary, some argue that we have not been using the funds as efficiently as we could. For example, there is no limit on the amounts of money that can go to a smaller airport my understanding, but on the major airports there is a limit as to how much of the federal dollars can go. I do not want to put you on the spot here, but do you not think we could do a better job or could have done and should in the future do a better job of allocating existing funds?

SEC. SLATER: I would say we can do a better job. I think we've been given some tools in AIR-21 to actually do that, Mr. Chairman.

Not only did the administration work with the Congress to get record-level dollars for the AIP program, the Airport Improvement Program, but we are also able to work with you to give local aviation authorities, airports, and the like to raise the passenger tax as well. And that, I think, I increased from possibly three dollars up to four-fifty.

SEN. MCCAIN: And, yet, do we not charge every passenger, is it $6 per trip? I've forgotten. We just increased it. And, yet, corporate aircraft fly around this country for free.

SEC. SLATER: You and I have talked about that. That's right.

SEN. MCCAIN: Do you agree that that's really obscene?

(Laughter)

SEN. MCCAIN: It's really remarkable. The wealthiest people in America and the wealthiest corporations fly around this country for free, yet the average taxpaying citizen that gets on an airliner has to pay a tax on it. Another argument for Campaign Finance Reform.

(Laughter)

Mr. Mead, I have one brief thing. I think Senator Rockefeller is right. We don't need to point fingers. We don't need to go back and put blame on people, et cetera. But I remember being startled when Governor Baliles sat in your seat and said, you know, unless something is done, by the Year 2000, every day in an airport -- or 2001 -- everyday in an airport in America is going to be like the day before Thanksgiving. And all of us were shocked. All of us, oh, my God, this could be terrible.

And, yet, almost inexorably, like watching a train wreck, if I might use that, we've seen this problem compound and compound and compound, to where people are -- we now have a new phrase, air rage. What happened here?

MR. MEAD: Well, I think we spent an awful lot of time talking about things like antiquated aircraft or patrol system. We spent a lot of time pointing fingers at structural issues. You know, should we privatize, should we leave FAA alone, should we do something in between. And I think it took us a long time, frankly, because what he predicted has certainly come true. And I think we have to make some very hard decision.

You asked in your opening remarks about funding. AIR-21 has done an enormous job in terms of making financial resources available. In a sense, Congress has done its part.

That's a lot of money. And AIR-21, alone, over the next two years is $9 billion.

I think time will tell whether that money, the bulk of that money, will go to your big priority, big capacity enhancing projects. I think that the Department of Transportation could do a better job in being more forceful in doing that.

And I think the Department will need the support of the Congress in doing that, because sometimes that's going to require leveraging to local communities. And you don't do ground infrastructure projects without the clearance of a local community. That's one issue.

And I also believe that, as I mentioned in the testimony, Mr. Chairman, we need to face the facts about what the capacity limits are.

It's like out here on Shirley Highway in the morning. There's only so many cars that go across it. We're cleaning Wilson Bridge right now, as the Secretary goes, and you have to decide how much traffic can Wilson Bridge handle.

And that's what we're suggesting here.

SEN. MCCAIN: You may end up with a limitation on the number of flights that people can take.

MR. MEAD: The other point, I guess my answer is not complete without saying that there were some very difficult decisions made in the '94-'95 time frame that essentially pulled back on a direction that the FAA was going in, and they had to go back to a drawing board, so to speak, to set a new direction.

Now that happened at about the time that -- just a couple of years before the Baliles Commission report came out.

SEC. SLATER: Mr. Chairman, if I may offer one or two comments?

SEN. MCCAIN: Sure.

SEC. SLATER: Also during this period, we were really dealing with some broader issues of importance to the nation, putting our economic house in order, strategically investing in those things that would strengthen us.

Fortunately, transportation was a part of that and, again, we just passed a major bill earlier this year with the leadership of this committee, to put us on the right track.

So we have made some progress, but we are at the magical moment now. Our house is in order. Economic surpluses. There is the opportunity to really invest, to do so strategically. The parties have come to the table. Hearings like this continue to put the pressure on those of us who have a responsibility here. I think this is a unique moment.

And on the point that Mr. Mead made about strategically investing in critical airports around the country, the Department of Transportation is ready to play a stronger role in that regard, but we do have to work with local and state authorities because, for the most part, those investments are made at that level, and the decisions about when to go forward, how to go forward, dealing with balancing the environmental concerns and the like, community concerns, are made at that level. But we can provide stronger leadership and are prepared to do so.

SEN. MCCAIN: Very amusing and entertaining, too bad it's true, by Evelyn Brody, called "Three Perfect Days in O'Hare Airport." Seems to me that one of the reasons why we remain in gridlock in Chicago is because of poor political forces, and unless somebody starts holding these politicians accountable, then things are going to get a lot worse at O'Hare Airport. Would you agree, Mr. Mead?

MR. MEAD: Yes, I would.

SEN. MCCAIN: We either expand O'Hare Airport, or we build another airport, or both. Is that? Do you agree with that?

MR. MEAD: Yes. Either that or change the usage profile of Chicago O'Hare in a fairly dramatic fashion.

SEN. MCCAIN: How do you mean?

MR. MEAD: Well, Chicago O'Hare is obviously a major domestic and international hub, and it seems when things go wrong at O'Hare, they go wrong nationally. If part of the traffic load, if a significant hunk of the traffic load at Chicago O'Hare was someplace else, I think that would have some effects. I'm not suggesting that, but that's one plausible outcome.

I think you'll hear from Mr. Carty of American later today on an interesting proposal he has about the use of the airplane asset, whereas they go from Chicago O'Hare to New York to some third or fourth location during the day. I think part of his proposal is that he limit the number of destinations. I think that's fairly intriguing.

SEN. MCCAIN: Senator Hutchinson. Excuse me. I'm sorry. Senator Bryan. I apologize, sir.

SEN. BRYAN: Mr. Mead, let me just compliment you. I'm not sure how many more times I'll have the opportunity to hear you, but your testimony is always as clear and it's concise and it's very helpful, so let me preface my comment by saying that.

Let me try to explore for a moment with you. I take it that implicit in these capacity benchmarks, when we ascertain what those are, that they will tell us that's the limit at which flights can continue to fly in a safe manner? Is that what we're talking about when we're talking about capacity benchmarks?

MR. MEAD: That's right. It doesn't help you on weather. You'll notice I said, let's do it for good weather conditions.

SEN. BRYAN: No, I understand.

MR. MEAD: Yes, that's it exactly.

SEN. BRYAN: So that's what it will tell us. So when Ms. Garvey gets this information to us in a couple of months, it'll tell us that these 30 airports, this is the capacity; beyond that, under the current usage, you can't add more flights to that airport? Is that essentially what we're saying?

MR. MEAD: I didn't go that far.

SEN. BRYAN: Maybe you can explain that for me, then. I don't want to misconstrue your comments.

Where I'm coming from is once these capacities are reached, and they're going to be reached at the rate air travel is, what are the options for us to expand the number of flights into these critical areas of commerce?

This isn't just a question of passenger convenience as you and I have talked. This is a matter that's indispensable to the growth of the economy, air travel, air service. Whether we're talking about visitor destination or cargo is essential to the expansion of our country's economic base.

MR. MEAD: I would stop quite short of saying that they should be mandatory or controls.

SEN. BRYAN: No, and I'm not asking that question.

MR. MEAD: But I think you need them at least for the next two or three years, and the reason why is because you are not going to get material relief from other sources.

SEN. BRYAN: Very briefly, Mr. Mead, what are our options? Assume in the airport, Las Vegas is one of the largest airports in the country, as you know; assume, that Ms. Garvey indicates, the capacity benchmarks, and let's assume hypothetically they're reached. What does that tell us? That no more flights can be added during particular times during the day? What is the significance of that question?

MR. MEAD: The significance of that is that if you continue to add flights beyond that, you're going to increase the pain threshold for the travelling public. You're going to be stressing the air traffic control system beyond what is reasonable, and hopefully people won't do that.

SEN. BRYAN: What are the options; in other words, if there are two or three things that we can think of that would enable us to expand that capacity benchmark, what are some of the things that we ought to be looking at?

MR. MEAD: Well, the free flight program, certainly, at FAA is one. If you're speaking of that particular airport, I'm not that fluent with the Las Vegas, particularly.

SEN. BRYAN: But just in general. Las Vegas is obviously of particular concern to me.

MR. MEAD: I think with the AIP money leveraging that or capacity enhancements, that will be truly meaningful.

SEN. BRYAN: Okay.

MR. MEAD: That's two areas.

SEN. BRYAN: Those are a couple of things. Okay, fine.

MR. MEAD: I would also look to the time of day that planes are arriving and departing. I can point to Newark's profile. Everybody thinks Newark's profile is terrible. Well, actually, there are points in the day where Newark has some valleys, and I don't believe we use those valleys enough.

SEN. BRYAN: You've given us three options here, and I appreciate that. That's very helpful.

Now let me ask you. I don't want to use "benchmarks," but what kind of indicators? You're talking about looking at our short-term, our intermediate and long-range situation here. What are the things that we may need to look at in terms of how well we're doing in addressing those problems, short-term, intermediate and long-term? What should we focus on? Let's take the short-term first.

MR. MEAD: Right. If you were to set those capacity benchmarks, you'd want to come in, I would say, every six months to see what the delay and cancellation factors were, to see that they were working.

I don't mean one or two-minute delays. I think that -- personally, I'm used to -- I don't get upset until I'm delayed by about a half an hour now. So you want to have an increment of time that's meaningful. But you come back and you benchmark that.

And I also think that the load that the controllers are handling, I would want to see not only the delay and cancellation figures, the load the controllers are handling, but how do the runway incursion and operational error rates look for that particular facility?

SEN. BRYAN: And would you use the same criteria with respect to the intermediate and long-term or would you --

MR. MEAD: Yes. I would have some -- I think you need some goals. Anytime you set a limit or a benchmark, I'm not sure that that's futuristic enough. I'm hopeful that with free flight and satellite navigation, that we have something to look towards, and we can set some benchmarks for what our goals would be, say for Las Vegas.

And we could use those very same indicators, sir, to track progress towards reaching them.

SEN. BRYAN: In your judgment, Mr. Mead, have we provided the sufficient legislative framework or authority for the Department of Transportation, Ms. Garvey's agency, in particular, to do the job? I'm talking about the legislative framework not the level of appropriation.

MR. MEAD: Yes, I believe you have.

SEN. BRYAN: So essentially the framework is there, the authority is there, as you view it?

MR. MEAD: Yes, sir.

SEN. BRYAN: Okay. How about the level of appropriations?

MR. MEAD: The Secretary can speak to this. My own view is that the offices -- this is not inside FAA, actually, this is inside the Office of the Secretary -- I think the Office of the General Counsel, the Office of Aviation and Policy, both of which oversee the enforcement of consumer rights, is inadequately staffed.

You have fewer staff -- I don't know exact numbers, sir, but you have fewer staff there that you did in 1995, and you've got more than a doubling of complaints. These people, they can't get to the complaints, and I think that enforcement sends the signal. And, frankly, we need more resources in enforcement.

SEN. BRYAN: In enforcement. Any other areas that you would suggest that would need more resources?

MR. MEAD: No, sir.

SEN. BRYAN: And my last question, Mr. Mead, in terms of procurement for the 12 years that I have been on this committee, we talked about some of the procurement delays and how long it takes to acquire and update, and you can buy things off the shelf in a shorter period of time, and you can go through the procurement, and by the time the procurement criteria are established, the equipment is obsolete, and there's three new generations of new equipment.

Give us your assessment, generally, where we are on procurement in terms of both the policy and the actual implementation?

MR. MEAD: As you know, Congress enacted procurement and personnel reform for FAA.

SEN. BRYAN: Yes.

MR. MEAD: Clearly, under procurement reform, they're awarding contracts quicker.

SEN. BRYAN: Okay.

MR. MEAD: Clearly, for the technologies like the HOST computer, contracts that were let for Y2K, they got the job done. Another one was the display system replacement in your en route centers. But these were not software intensive projects. The software intensive projects continue to plague FAA, although FAA is much more open about the problems, much earlier in the process.

The satellite navigation system, ISR, is an example of one where software problems continue. I don't think it's a function so much that the government has the contract. I mean, a private sector firm, a private sector firm is running the contract; that they're trying to get to a 99.9 percent reliability rate, you can't have a satellite signal falling off on a final approach.

So software intensive procurements are still having -- they're still having more then their share of problems.

SEN. BRYAN: Are we making perfection the enemy of the possible in terms of setting the standard 99 percent too high? Is that something that's not attainable as a practical matter?

MR. MEAD: In some programs, that's so. Some years ago, there was terminal weather Doppler radar which detected windsheer. That was intended to replace a system that wasn't good. It was good about 50 percent of the time, and I think that we probably lost a few years in that procurement, because if we were striving for a 99 percent reliability.

Satellites, though, is another matter. You're going to have these airplanes relying on the signal that says exactly where you are, and there's not much room for error.

SEN. BRYAN: No.

SEN. MCCAIN: Senator Hutchinson.

SEN. BRYAN: Thank you very much, Mr. Chairman.

SEN. MCCAIN: Thank you.

SEN. HUTCHISON: Thank you, Mr. Chairman.

I think the capacity issue and the infrastructure needs have been well questioned. There's one other point I'd just like to ask about on that issue. That is, does the FAA have a system that you feel comfortable with, Ms. Garvey, that gives air traffic controllers a big enough picture, that if there are weather delays in Detroit and they are going to either keep flights from going in there or reroute, that they can look at the rest of the country and avoid delays by either rerouting all to the same airport or those kinds of issues.

Do they have a -- you know, I've been in those air traffic control centers, and you see what their air space is. So can they look --

MS. GARVEY: That really gets to the heart of I think a number of the issues that we have. We have at the command center at Herndon -- and it's a wonderful place to visit if you have an opportunity to do that -- but at the command center, they have terrific weather technology. Some of the members, I know, have had a chance to see that. So you really do get, as you've suggested, a comprehensive, big picture look at the command center.

For the first time this year, which is a very, very important step forward, we're all using common weather information, both us and the airlines, and that's a significant step forward.

However, your point about is there more information that we can give to the controller, is there even more precise information, that's really, I think, the next iteration of technology.

SEN. HUTCHISON: This is not just seeing the weather everywhere, it's knowing what the other controllers are facing and having the instant information so that they can make other judgments? Is that it?

MS. GARVEY: That's true. And I think in weather there still is another wave of technology that's going to be very critical.

But you know it's interesting. We were up in New York last week and talking both with the controllers and with the managers, and there's a balance to strike. One of the controllers said when I am at a really busy time and things are really hopping, I've just got to take care of my sector, I've got to take care of what I'm doing.

When it slows down a little bit, it's good for me to step back and look at the big picture, and we are putting in a number of the facilities, some of those bigger screens, very similar to what we have at Herndon. So we're getting there.

We're not fully there yet, but the common weather information is I think extraordinarily helpful this year, and still that right balance about focusing on what you need to get done, but then also having time when it's a little bit slower to take a look at the bigger picture.

SEN. HUTCHISON: Mr. Slater --

SEC. SLATER: Yes.

SEN. HUTCHISON: -- part of air rage is this information to passengers' issue, and I think if people know what to expect and are given the information either before they come to the airport or when they get there, if there is something unavoidable, I think the information issue is a big one in the rage factor.

Also, I think the feeling that people get that sometimes flights are cancelled because they're not full, because there's another flight that leaves 45 minutes or an hour later, what do you do to monitor? And I know it's against the rules to cancel a flight just because it's not full, but what do you do to monitor that that doesn't happen?

And, secondly, without going into more regulations, which I would like to avoid and I think most of us would, do you look at the information factor and try to see if airlines are giving the information that they have to passengers, or is that even something that you have the ability to do?

SEC. SLATER: Well, first of all, let me say that it's our desire to avoid the need for additional regulation as well, and that's why the collaborative process is so essential, where we work with the industry. And we've had some considerable success in that regard.

Secondly, when it comes to information, clearly, we found that the biggest issue with passengers is, more often than not, the question of information. They know that there will be delays for any number of reasons, most of them involving weather, and they just want timely, accurate information that they can rely on.

And, clearly, they would like to know when they're delayed whether there are options with out airlines as you have noted in your earlier comments.

We actually have, I think, two of the best companies in that regard here today, and you'll have an opportunity to hear from Leo Mullin with Delta and Don Carty with American.

During our roundtable discussions, we've gotten into that issue. That's with the task force that Mr. Sanchez will head dealing with best practices is all about, to collect the best information out there that deals with programs employed by individual companies, and then to share that across the aviation enterprise. That's exactly what we're trying to do.

I know that Delta has invested significant dollars to streamline their technology and to make sure that all of the players on the front line are getting the same information at roughly the same time.

Again, Mr. Mullin can get into that to an even greater extent.

Mr. Mead talked about some of the decisions that Mr. Carty is going to make as it relates to the scheduling.

Well, they've relied on their information flow to make those kinds of judgments, and those are the kinds of things that have to happen as we manage better the process and the capacity of the system, and clearly the benchmarks that will help us know what the high point is will help us then deal within that frame of capacity that is reasonable.

So I think all of these things are actually helping us to enhance the efficiency of the system we have.

Now, the last point --

SEN. HUTCHISON: What about cancellation?

SEC. SLATER: Yes. There is a provision that's -- I think it's 49 U.S. Code, 41.712, which gets into the question of accuracy and truth in advertising and in scheduling and all of those questions. And, clearly, those powers that are at our disposal.

But we, also, in our consumer reporting activities, stay on top of the information, really monitoring flights that are, you know, sometimes they have a 100 percent delay record over a period of time. In the most recent consumer report, we actually identified some of those flights.

We do monitor the situation. You know, we have tried to use a collaboration process. We will continue to do so. But in a situation where we find that we cannot resolve matters in that way, we do have authority for dealing with those questions.

Now I'd like to close with a comment that Mr. Mead made earlier when responding to Senator Bryan. He said, are there other powers or resources that would really be helpful.

I can tell you that when it comes to our consumer protection functions, we do not have the resources to do what needs to be done. Now we do have the authorization. And here, Mr. Chairman, we had a discussion the other day on the same matter as it relates to NHTSA, and we got into a discussion about resources.

And at the time, I was not as clear as I wished to be now, and that is, when it comes to authorizations, this committee has been very helpful to us in providing the resources through the authorization process.

But when it gets to appropriations, sometimes we just don't, at the end of the day, get the resources we need to give us the ability to follow through on some of the authority that we have.

SEN. HUTCHISON: Thank you, Mr. Chairman.

SEN. MCCAIN: Senator Rockefeller.

SEN. ROCKEFELLER: Thank you, Mr. Chairman.

I want to reemphasize what has been said. I think this kind of a hearing is very, very useful because I'm not talking about particular problems associated with West Virginia. We're not discussing noise in Arlington.

I think this is sort of the whole blame type of thing, and what we're trying to do is rise above that. I think one of the reasons we haven't been able to rise above that is because we do, when we come to markups and things of that sort we tend to, on our side, become to look after those particular things which constituents are talking to us about and which we feel we need for out states, which takes us away from the national aspect of all of this.

On the administration side, I would have to say -- others on this Committee would disagree with me, but I'm very much of an off-budget person. The administration was not off budget, but they weren't for the amount of money that we wanted to spend. And so there's that factor.

The airlines -- and we'll get into this also -- scheduling 50 or 60 flights where only 30 are possible, and yet they feel they have to do it because if they don't do it somebody else will do it, and so that's part of the competition. So, again, a blame all around.

So in a sense what we're talking about is, in fact, a national system, which is in some ways coordinated as in the case of runways and airports by state and local decision-making, which predominates, and you have a terrific conflict on that whole thing. And we don't address those problems because we're dealing in smaller things and ignoring the larger problem.

So having said that, let me ask any of you, of the three distinguished witnesses. Yes, we put some money into infrastructure and runways and air traffic control, but it was also, I thought, just as interesting that in view of what was said about the appropriations process that we put the infrastructure and the air traffic control to the appropriators, and we put that in as mandatory, so to speak, and then said, all right, if you don't want to pay for FAA and air traffic control people, then you go ahead and do that, thus, calling the hand of the appropriators.

Because they, all through the conference period, were reluctant as were the budget committee people, reluctant to give us any money to do any of these kinds of things. So, in a sense, we had to manipulate our own process in order to get the money that we need.

But the money that we need, Mr. Mead, is that in fact enough? I notice that you said 5 to 7 years to build a runway. I'm sort of more schooled in the 8 to 10 years thought.

So the first question I want to ask is: How much in the way of new runways? You know, I know you get to California and you talk about building a new runway in the San Francisco Airport. Everybody goes crazy because you can't do anything offshore.

But on the other hand, are we going to have to bypass San Francisco? Are they going to have inadequate service because of local decision-making?

LaGuardia, obviously, is going to have to build out in the water. I don't know how their environmentalists or local people feel about that, but there aren't going to be more runways unless they do that.

So my question is twofold: One: How many runways can be built? I mean, there's a vast, talking about what kind of planes you're using, an enormous, hundreds of millions of dollars of cost differential in what these runways are.

How many do you see being built or what percentage of what needs to be built, do you see being built, as a result of AIR-21? In other words, how far have we fallen short in AIR-21 in terms of what we need to do when, really, all of these things have to be done tomorrow and obviously can't be?

Secondly: Would you address this question of, you know, when we build interstates, highways, the feds provide the money; the states, more or less, determine the route. The feds have something to say with that but not a whole lot to say with that.

And I'm very concerned about your views about do we need to start looking and dealing more forthrightly with states about this is a national problem, that when something goes wrong in Newark and O'Hare or any of those big airports, I need to tell my people, as I do, in West Virginia, that the first people to suffer will be Charleston, West Virginia, Huntington, West Virginia, because they always take the end of the food chain and chop that off.

So the national dimension of this calls for some new thinking, I think, on our part.

And I would be interested in your response to the question of runways and the question of local versus national input.

Chairman McCain won't remember this, but I remember, I was a governor for eight years, and I tried for eight years to raise the drinking age in West Virginia from 18 to 21, and I succeeded brilliantly by getting it in 8 years from 18 to 19, and then I came up here, and in my very first year there was national legislation that said, okay, you want your federal highway funds, you put it at 21, and it was done like that.

Now these are things that states may or may not like, but it sure helped a lot.

So I'd appreciate some responses on those things.

SEC. SLATER: Senator, I think you afford all of us an opportunity to comment on the question. Let me just offer a few and then turn to my colleagues.

First of all, I do think that it's very important for us to communicate to the nation the importance of this industry. We've talked about passengers increasing, you know, threefold over the last 30 years or so. I mean, we're moving now 670 million passengers this year, 650 million last year, about 200 million more annually now than when this administration came into office.

It is a critical industry to the long-term viability of our economy and to an improvement in the quality of life of our citizens.

Senator Cleland, earlier you talked about extending life. Well, when you can move faster and more efficiently by adding to the quality of life, you actually extend it. You extend it.

In the closing years of the last -- or in the middle of the last century, the vision of the interstate to lock all of our communities and cities together, really unleashed the economic power of this nation.

In the coming century, aviation can do that as we play on an international stage, giving us access to communities and cities around the world.

Right now, beyond the movement of passengers, aviation accounts for only about 3 percent of the tonnage, the freight that we move, but it accounts for about 45 percent of the value of the freight that we moved.

We mentioned Federal Express and UPS and some of those companies a little earlier, along with the freight that's moved by the passenger carriers, very important to the overall health and well being of the economy of the nation.

SEN. ROCKEFELLER: Mr. Secretary, I have time limits. I need to get my two questions answered.

SEC. SLATER: I understand. But I think as we make that case, we can then, as a federal government, better work with state and local governments when it comes to meeting the infrastructure challenges because they do have a role.

I don't think that we'll have a time when the federal government will be dictating a new runway at O'Hare or at Hartsfield. We have to do those things together. So the vision, the case, I think will help us in that regard.

As relates to the runways --

SEN. ROCKEFELLER: But then what do you do with San Francisco? I mean, I don't know San Francisco well enough to say that they would absolutely refuse to have another runway built out into what turns out to be a rather large body of ocean, called the Pacific Ocean, but I think they would fight it. I think they would fight it.

It might be a small group, it might be an environmental group, or whatever. But they would fight it. And at some point you have to have the proper number of runways in San Francisco.

SEC. SLATER: That's right. But Mr. Mead touched on that particular question a second ago when he said that character of the runway, and it's important in the overall national scheme of things, may have to change.

Once those issues, again, are considered by those at the state and local level, there may be then the political will to really deal with some of the challenges that have to be balanced and met to make those kinds of investments.

San Francisco, a gateway to Asia, has to consider its role in that regard as it relates to L.A. or Seattle. And now with the planes that can move greater distances, other gateways becoming major U.S. gateways to those important markets.

Those are the kinds of things that would come into play.

SEN. ROCKEFELLER: So you're suggesting, in that we all recognize we don't have 10 years for local decision-making to rise to the level of Confucious in its wisdom, you're suggesting that there might have to be a reconfiguration in the traffic allowed into or routed into San Francisco, so that they have to -- I'm not picking on them, but that they have to deal with the possibility of fewer flights, less traffic, in return for keeping that local control?

SEC. SLATER: I'm glad, first of all, that we made it more general. We've been talking about San Francisco.

But I think that what you have to do is have the big picture understand what the competing demands are, and in a collaborative way, if you can, try to address these needs. But where you have powers to do other things, you have to put those issues on the table as well, and we're just getting to the point again where we're beginning to talk it through.

Up to this point, it was maintaining the health and viability of the industry. We have met that challenge. We have opened access and markets and liberalized aviation agreements with international partners, and now we have the service issue that is the challenge at hand.

Also, on the issue of the runways, with the 9 or so billion dollars in AIR-21, we really have the resources to deal with most of the runway issues that are on the table. Many of them will be different costs based on the local challenges, but generally around 300 or so million for an average size runway.

A lot of those runways can be paid for with the $9 billion in AIR-21.

And we've also talked about how we might be able to use some incentives from our level to actually encourage communities as they seek our participation in those kinds of investments.

MR. MEAD: And I don't think money is the problem, particularly when you throw in the PFC revenue. You combine that with the 9 billion, that's a very good piece of change.

The other question, it's actually right. Why should the entire national airspace system, the air traffic control system, have to put up with an endless number of flights being scheduled out of an airport that can't accommodate the capacity?

And I think there are some hard decisions ahead on that. If we're not going to improve the infrastructure in a particular location, some corresponding adjustments need to be made about what the air traffic control systems must be prepared to handle.

SEN. MCCAIN: Good solution.

Senator Gorton.

SEN. SLADE GORTON (R-WA): Thank you, Mr. Chairman.

I'd like to have you put an opening statement in the record.

SEN. MCCAIN: Without objection.

SEN. GORTON: But just to say, to a certain extent, it seems to me the discussion has involved perhaps 2 million subjects with some sub-subjects.

One of those subjects is the capacity of our airports. With the two subsets, perhaps one of which we solved, at least according to the people here, the money necessary for the concrete, the other the issue that Senator Rockefeller brought up; and that is, local opposition to that kind of increase in capacity.

The other is the technology. Using what we have now, you know, more efficiently with a better air traffic control system; the latter right now is a purely federal responsibility.

SEC. SLATER: That's right.

SEN. GORTON: One of the things we're talking about is very clearly not.

With that in mind, I'd like to start with one other thing, Mr. Chairman. I'm not a great fan of this administration by any stretch of the imagination, but I do want to say that the three people who are in front of us, Mr. Chairman, I think have done a magnificent job with the complex challenges that they have faced, and this may well be the last hearing with this three-group in this Congress.

Each one of these people has been extremely constructive, I think, in dealing with each one of these very, very many challenges.

Now with that, if I may, I'm going to share an experience with you. I had a rare occasion yesterday of coming back from Seattle to Dulles in the middle of the week, and by United flight, and in a delightful exception to its recent history, pulled right out of the gate on time and then pulled right back in.

United Express flight from Eugene had landed and distributed passengers two of them to our flight. And its baggage was being unloaded, one of the suitcases, almost knocked out a baggage attendant with its fumes. It turned out that this particular passenger seemed to be carrying an entire meth lab or chemical laboratories in his checked baggage.

And they had to pull both of the passengers who transferred to our flight out. They pulled passengers out of perhaps half a dozen other flights. We left and arrived here 2-1/2 hours left, and when we left there was a police line around this poor little prop commuter plane and a yellow band.

But that will appear on this chart, you know, the next time around. There was no rage among the passengers on our plane. You know, this whole thing was very clearly done, you know, for our safety.

And that leads to the principal question I have for you all know that is mentioned in passing; and that is, how soon are we going to be able to understand not just the gross figures that appear on this chart, but how soon are we going to have a single definition of what "late" is and what "on time" is and a reasonable breakdown of weather, the kind of problems that afflicted United, labor problems, overscheduling at a particular time because the airport, even at best, can't do it, and pure safety, obviously, necessary things like what took place with me yesterday.

When will we have a chart, in other words, that's more meaningful than this was that can tell us the whys? Because it's only, it seems to me, that when we know the whys that we can really focus in on controlling those we can control, and not forgetting the one we can't control, like what happened to me yesterday, but at least to isolate them?

SEC. SLATER: Mr. Chairman, a little earlier we talked about capacity benchmarks that Ms. Garvey and her team will have for us pretty soon. I think we were talking about, what?

MS. GARVEY: Just about a month or so.

SEC. SLATER: At about a month or so.

And then we also have a task force that has us following through on a measure, a provision in T-21, that deals with the issue of having the same factors of measurement, and our Associate Deputy Secretary Steven Van Beek is heading up the effort, and it's supposed to be done with that work in about, oh, 90 days, and we're into that, so it'll be less than that. But by the end of the year.

MS. GARVEY: Senator, also just to add that we've made a lot of progress in the last six months, and just arriving at the definitions, because you're right. Our common language has not been the same.

SEN. GORTON: When will it be?

MS. GARVEY: Well, the common definitions, we're very close to having completed, and this will be part of the work that the Secretary referred to that Steven Van Beek is heading. So by the end of this year, we'll have the common definitions.

The challenging part, and Mr. Mead and I have talked a lot about this, is then putting in place the right methodology so that we're tracking them correctly. But even the definitions have been difficult, I will tell you, and we're working this both with the airlines, with our colleagues at BTS, and the Inspector General will be a part of that as well.

MR. MEAD: Yes. There is one pet peeve that I have on the statistics. I try to always mention, and I would like to see it changed by the end of the year.

I do not think there's anybody in the travelling public that believes they are leaving on time when they pull out of the gate at 14.5 minutes and then sit on the runway for two hours. And that seems to me to be a self-evident change that ought to be made.

I understand that it's useful to have an internal measure for an airline about how quickly you pull away from the gate, and that's good to know. But we shouldn't be telling the American public they're leaving on time. They must wonder what's going on here sometimes when we suggest that.

But that's something that could be changed, and I think without a lot of controversy.

SEN. GORTON: Well, I hope it is and I hope it is promptly.

Thank you, Mr. Chairman.

SEN. MCCAIN: Thank you.

Senator Cleland, sir.

SEN. CLELAND: Mr. Mead, I just want to commend you for that. The last hearing we had here a few weeks ago, I mentioned the idea to an airlines president who shall go nameless. I said, aren't we gaming the system here, when if you pull out from the gate, about less than 15 minutes, and you sit on the runway for an hour and a half, and we've, in effect, I guess, all been there, done that, got that T- shirt.

You know, why is that "on time departure" and "on time arrival"? You know, da. I don't get it. And I thank you for that. I think that's one positive change that I think could be part of the information that we're talking about that consumers want.

For me, I guess it's my time in the military, I guess being in a helicopter so much or whatever, in Vietnam. But if you can walk away from it, it's a good flight, you know?

(Laughter)

My standards are pretty low, and the airlines here exceed by standards every day.

(Laughter)

But I do think if the travelling public, which expects delays, problems, lots of planes in the air, weather, I mean, the American public is not dumb. If they just have a realistic appraisal of the situation and some real facts in real time, I think that's going to help this situation in terms of perception, a whole lot.

When I say, Mr. Secretary, you have been before this committee twice this week, and may I say you've jumped from the Firestone into the fire here.

(Laughter)

I'll tell you, in Atlanta, we need your help. If we don't get that fifth runway at Hartsfield, the space station will be the second Atlanta airport. We are running out of time, and we are not reluctant guests. You're not having to drag the Atlanta City Council at Atlanta business community up into this concept that they need another runway. We're out there pulling the rope not pushing it, and we need all of the help that you and your department can give us.

I might say, Ms. Garvey, I have just a couple of pet peeves. I guess my question to you is that we have world class carriers, no question. We have a world class number of passengers, and it does seem to me that we need a world class nerve center; in this case, an air traffic control system, a world class air traffic control system.

By that I mean, the most up to date equipment known to the mind of man. If you can get out on a little boat and have a little bitty thing like that, a GPS, and know exactly where you are in the world, it seems to me we ought to have a world class system of knowing where every aircraft is at every moment, and a communication system that everybody talks to one other with.

And then we ought to have air traffic controllers that are happy. I want a happy air traffic controller. I don't want them sad, I don't want them on bad equipment, I don't want them to have a bad day.

(Laughter)

It's all part of the nerve center around which whatever capacity we have works effectively and safely.

When do you think we can get or say that we have a world class air traffic control system?

MS. GARVEY: Well, if the question is, when is modernization going to be finished, it's always evolving. I think we're always going to be looking at new technologies.

But I'll tell you something. I think we do have a world class system. I think we've got the best controllers in the world, and I agree with you. You want them feeling good about their job, and I think you're going to have a chance later to hear from the president of NATCA and HIA. They're terrific.

I think they are the best.

The challenge for us in government is to make sure we get them the best technology that we can.

The chairman said earlier we've got to be vigilant about that. I think we are. We're putting in place as many building blocks as we can and I think aggressively as we can.

If you look at a place like Memphis where we've got some of the free flight tools, the controllers defined it and called it in the New York Times "the most modern facility in the world," and it is. And that's what we're doing, incrementally, benchmark by benchmark, step by step.

I think the airlines are right to keep the pressure on us. I think Congress is right to keep the pressure on, and we're right to keep the pressure on ourselves. But I'll tell you, we've got a terrific workforce out there. We've got great technology in the centers. We've got a lot more to do to keep up with this growth, but I think we're really staying the course.

SEN. CLELAND: I would hate for the FAA to get caught up in bureaucratic inertia or budgetary hassles where you can't move forward and get what you need. I mean, I think everybody in America, we want you to have what you need.

Now, I understand that the FAA does not have the authority to borrow funds to purchase equipment, although a program to do so passed the Senate, with my support, I might say, as part of the FAA reauthorization legislation, but it was dropped in conference because of rejections from OMB.

Would you be better off, would you be able to move faster, quicker, better, more assuredly toward the top of the line world class equipment that you really know you want if you had the authority to borrow funds to purchase equipment?

MS. GARVEY: Senator, I think some of those suggestions for financing were suggested by the Benetta Commission and it may have even been by the Baliles Commission. OMB raised some objections to them. I think others in the administration had raised some objections. There were some objections even on the Hill.

So we're proceeding with what we've got. We've got some great possibilities, I think, with the program that AIR-21 included, the public/private partnership that I suggested earlier.

We're willing to try that out and see whether that offers us some good examples to move forward. So I think we're moving forward. We're going to be more vigilant.

SEN. CLELAND: Mr. Chairman, may I just call that to the attention of our staff. It's something that we might want to look at in terms of additional authority to let these good people go as fast as they can to where they want to go.

Mr. Mead.

SEN. MCCAIN: We've got to press on here pretty quick.

SEN. CLELAND: Yes, sir.

Thank you for allowing us to have your insight. Thank you for the concept of capacity, benchmarks. I do think that that will help us all not stack up these airports unrealistically in terms of flights and therefore create multiple problems.

Thank you very much, Mr. Chairman.

SEN. MCCAIN: Thank you very much, Senator Cleland.

Ms. Garvey, I hope you'll pay attention to the story in the Wall Street Journal. "Efforts to ease delays in summer air travel also produced snarls. FAA centralized controls and radar screens are cited for lost efficiency." I hope you'll keep us informed in that area.

MS. GARVEY: We will, Mr. Chairman.

SEN. MCCAIN: I want to thank the witnesses. And I apologize to you for such a long period of time of questioning, but these are very important issues, and I appreciate your input. I thank the panel.

SEC. SLATER: Thank you, Mr. Chairman, members of the panel.

SEN. MCCAIN: Thank you.

And I appreciate the patience of the next panel, which is Mr. Leo F. Mullin, President, Chief Executive Officer, Delta Airlines; Mr. Donald Carty, the Chairman and President and Chief Executive Officer of American Airlines; Captain Duane E. Woerth, President of Air Line Pilots Association; Mr. Robert Poole of Reason Public Policy Institute; Mr. John Carr, President of National Air Traffic Controllers Association.

Thank you for your patience.

We'd like to begin with Mr. Mullin, who can acknowledge the compliments of Senator Cleland.

MR. LEO F. MULLIN: Thank you very much. I do acknowledge the compliments of Senator Cleland.

Thank you, Senator.

And thank you very much for inviting all of us, but particularly me, here.

Mr. Chairman, much of what I would have said --

SEN. MCCAIN: I agree with his statement.

(Laughter)

MR. MULLIN: Thank you, sir. This is off to a good start.

I would like to just make succinctly, hopefully, just a couple of comments that have not been made previously.

But, first, I just want to emphasize how important it is that capacity increases be made in every single segment of the system, the airplanes, the airports, and the air traffic control.

And I think as we think about as we're moving ahead, into the future, it's very important to keep in mind one crucial governing aspect of why we're here; and that is, that we should put the customer first in terms of providing air transportation.

We exist every single component of this system to provide service to customers, and so as we go through and we consider any kind of limitations on the system, any kind of constraints, anything that involves the metering of slots, et cetera, we have to recognize that we are, in fact, constraining the fundamental ability of Americans to travel and that that is very, very important.

I would also add that I think that each of the components of the system have got to take responsibility for what they do, and I would like to acknowledge, Mr. Chairman, that the airlines still have a lot of work to do ourselves.

We've worked hard in the past six months relative to the customer service plan to really put the focus back on to customer service where it belongs.

In the case of Delta Air Lines, when I came three years ago, we were dead last in almost all of the customer service indexes, most notably, on-time performance, 10th out of 10. And we're proud right now that Delta is in the top 3 with respect to on-time performance, complaints to the DOT, and baggage handling statistics, consistently.

So we've made a lot of progress in that. And relative to the report Mr. Mead will be giving on implementation of our customer service plan, we are looking forward to getting good marks on that later this year.

I'd like to point out, however, three points that I don't think anybody mentioned as we went through.

To make a quick comment, regional jets, the requirements for better management and labor relations and industry consolidation.

On the regional jets, frequently regional jets are pointed out as a burden on the system, wherein, they will increase the necessity for capacity in the air space and on the ground.

Regional jets are one of the most fundamental, wonderful technological developments of our industry. In particular, they provide the opportunity for service to small and midsize cities to a degree that they have not had before. These cities have frequently been referred to as "pockets of pain" as a result of the deregulation that took place in 1978.

Now they are getting back and tied to the major cities of America, and we have to build a system that accommodates them, not limits them in the future.

My second point is that we've had, this past summer, difficulties in management labor relations. The United situation, of course, was the biggest example of that.

Let me say that I think both management and labor need to operate according to the Hippocratic Oath that all medical students take, and that is, with respect to the customer, first, "Do no harm." It is a crucial ingredient of moving forward. I appreciated your earlier -- Mr. Chairman, your comments on duty, and I thought those were particularly appropriate.

The last point is on industry consolidation. United and U.S. Airways are proceeding with a merger. I think certainly mergers should be of business technique that is available to airlines as to everybody in all industries.

I do think that it is going to raise questions of customer service moving forward, and that this committee should take a clear examination of that as we move ahead, because all of us, who will become competitively affected, will need to take steps.

In response to that, I do think it is a prelude to further industry consolidation as that merger moves ahead.

So I appreciate very much the fact that we've had the opportunity to talk here today. It is crucial we take the steps now to save our wonderful system now, and it does require saving.

And if a number of these steps that have been outlined today, I think we will look back 5 to 7 years from now and feel good about what we've done.

Thank you, Mr. Chairman.

SEN. MCCAIN: Thank you.

SEN. MCCAIN: Mr. Carty, welcome.

MR. DONALD CARTY: Thank you, Mr. Chairman, and good morning and good morning to all members of the committee.

I, too, appreciate the opportunity to talk about the single most critical issue that faces our industry today, and that, of course, is the need to expand our nation's capability to safely meet the extraordinary growth and demand of air transportation.

Now, rather than rehashing the problems in the current system, some of which are described in my written statement, I want to spend my allotted time, I think laying out some specific recommendations for actions that would address the problems of delays and considerations, which do result from inadequate air space and ground infrastructure capacity.

In order to meet the demand for safe, reliable, commercial air service, we have to address three areas simultaneously, and they've been all mentioned, all of them this morning, but the end route air space capacity and traffic management, terminal arrival and departure, air traffic control capacity, and of course ground infrastructure that a number of people have alluded to already this morning, including runways and taxi ways.

Fixing any one of those things, even two of them, is going to leave us, if we do not have simultaneous and comparable improvements in the other areas, it's simply not going to solve the ATC problems in the long run.

The total system capacity is always to be defined by whatever choke point, to use Senator Cleland's reference. Going to leave us with that stroke point still existing.

Before getting into the specific solutions, I do want to elaborate on one part of my written statement regarding charges by some, and they were again alluded to this morning, but the only problem we have is oversheduling by airlines.

Now in it I wrote that from a market demand point of view, and Leo just touched on this, we certainly do not over figure. In fact, we have record high load factors, and we're turning more passengers away on our peak hour flights than we can handle.

So from a market, from a customer perspective, of course, we're not overscheduling.

But with that said, at any given airport, the total schedules of all the airlines when added up, can and increasingly to exceed the capacity of that airport to handle the volume.

I think that's one of the important reasons that we need to understand pretty precisely what the capacity of an airport is defined to be.

Now at hub airports, we do have some tools to deal with capacity problems since an individual airline has a large percentage of the flights operating at that airport.

Indeed, I think as all of you know and it was alluded to this morning, American announced a number of major schedule readjustments about bout Chicago O'Hare and at Dalles-Fort Worth, which are our big domestic hubs, which we think will significantly improve our reliability.

But we're only one of many operators, and to cite some examples -- LaGuardia, Boston, Los Angeles -- a reduction of capacity by one airline is just as likely to result in an increase by another. Therefore, no one can disarm unilaterally, and obviously we can't discuss scheduling with each other to reach an industry-wide solution in these circumstances, hence, this scheduling problem really is a really issue, just like weather and just like air traffic control modernization, but it is only one piece of what is increasingly a very complex puzzle.

The airlines, I think, have to work together, they have to reach consensus on a multifaceted plan of action with all the users of the system and with government. Now this includes our own employee groups, general and military aviation, the many professionals that are involved in air traffic control and of course the airport operators.

Of course, it also includes the many levels of government that are involved in aviation, and there are many levels of government involved, from state and local officials that control the local airports, the FAA, and other administrative agency, and of course the members of Congress and, in particular, this committee.

So let me turn to some very specific recommendations, which I'll group into near-term, medium term, and long-term objectives.

In the near term, the next two to three years, we simply must do a better job for our customers, with the tools and the infrastructure that we already have.

We, the airline industry, I'm talking about now, needs to better understand the perspective of the air traffic controllers and the causes of the capacity restrictions that exist. Now that's going to allow us to better predict the impact of weather or scheduling, routing decisions, that we make in the system as a whole.

With better tools and communications, is going to come an ability to mitigate the impact on our customers by a combination of operational measures, such as rerouting connecting passengers over alternate hubs and on alternate airlines if necessary, and certainly better and more timely customer information.

Between the industry and the FAA, the development of common metrics, to define goals, and then to assess progress is a prerequisite to improve predictability, efficiency, and communication about ATC system capacity.

There's an old saying that you can't fix what you can't measure. Ken Mead alluded to this morning, and he's absolutely right, and it certainly, most definitely, applies to the air traffic control system.

In addition, a number of procedural change could be made to better utilize capacity. For example, with the full cooperation of the FAA and Jane and her people, the airlines have already begun to use some lower altitude, alternative routings, instead of operating all jet aircraft in the same altitude lanes.

Similarly, through a partnership with the FAA, the military, and the industry, we are working towards making restricted air space temporary available for commercial operations to navigate around adverse weather conditions more often.

We're also collaborating with FAA and the air traffic controllers on the use of existing traffic management tools and the implementation of available technology for aircraft routing alternatives when weather restricts the normal flow of traffic.

Now although I list these suggestions as near-term, we should be clear that each of them requires the cooperation of all the parties that I referenced here.

In most cases, new procedures, in particular, if they are to be implemented safely, requires careful planning, new training, and of course a culture that's going to accept some change, and we must never let the desire to eliminate delay and disruption impact that commitment to safety.

Now in the midterm from 2003 to 2005, I've placed those efforts aimed at the implementation of new tools, and certainly implementation of new technologies that make more efficient use of the existing capacity. Thus, in this category, we have to take steps to develop more efficient ways to use when route terminal and airport ground capacity.

En route capacity utilization can obviously be increased safely by beginning to redesign the current air space, and a number of the programs that Jane alluded to earlier will result potentially and reduce vertical separation minimums and using technology to redistribute controllers' workload.

In the terminal environment, we need to deploy new technology such as GPS, coupled with wide area and local area augmentation systems to allow more precise tracking and reduce separation.

Another example, today, together with NASA, we're testing new technology that detects weight vortex. That is, the turbulences caused by another aircraft. If that's successful, that system will ultimately allow us to safely decrease aircraft spacing when landing and make better use of the concrete that's already poured.

Now at the airports, we need to implement new tools for controlling traffic on the ground. We need to improve communications to allow airlines to predict precise gate arrival and departure times and respond in a far more dynamic way than we've been able to heretofore.

You can easily imagine a day when you no longer arrive early only to have to wait on board if there's no gate available at your destination.

And, finally, long-term solutions, in my estimation, that inevitably can only occur in 2005 and beyond are characterized by the need and there have been several references to it this morning, construction to new airport capacity.

We need to continue to enhance the performance of the en route terminal area air space, particularly for airports in congested areas with the development and implementation of new and even more precise technologies.

Nevertheless, there is and there will continue to be a critical need for increased infrastructure -- runways, taxi ways, and terminal space -- and they have to be planned today if we're even going to have a chance of having them post-2005.

As I said at the outset, the air traffic control problem has to be addressed, I think, in all areas simultaneously. There is simply no golden key to this.

Until the last piece is in place, we will achieve only the incremental improvements that have been referred to. But most importantly, all participants in that system must first recognize there's a need do work collaboratively towards the common goal of increasing the movement of aircraft through the system without compromising safety.

And I agree with the Secretary, the Administrator, that we are making very good progress on that front.

Speaking now on behalf of all the carriers that make up the Air Transport Association, you do have our pledge to continue the efforts that have already begun to work with Administrator Garvey and the air traffic controllers and general aviation interest to achieve this goal.

Again, I'd like to thank you for the opportunity to come before you today, and in turn, I'll be delighted to answer any questions.

SEN. MCCAIN: Thank you, Mr. Carty.

SEN. MCCAIN: Captain Woerth.

MR. DUANE E. WOERTH: Good morning, Mr. Chairman.

As you know, ALPA represents the professional interest of 58,000 pilots who fly for 50 airlines in the United States and Canada, and I do appreciate the opportunity to appear before you today to discuss the very complex issues of flight delays and proposed solutions to the problem.

Let me say at the outset that all airline pilots of ALPA are grateful to you, as well as your colleagues in the House, for the enactment of AIR-21. Your actions go a very long way to providing a stable and adequate funding to modernize our air transportation system.

Although the benefits provided by AIR-21 will not be fully realized in the near term, we are hopeful that the monies called for during the life of AIR-21 and future authorizations and appropriations will lead to the completion of the core, NAS, modernization projects contained in the NAS architecture.

Now at the end of the summer of 1999, the collective thought of the aviation community was that the air traffic control delays could not have been worse and that positive steps needed to be taken to avoid a repeat performance. ALPA believes that FAA and the industry took a positive step with the spring 2000 initiative.

Spring 2000 is a daily collaborative planning process designed to allow significantly better response to weather and other system constraints.

Its goal is to employ the tools and processes that will provide predictability, accountability and the reliability to the national air space system.

It's a tactical approach to managing the national air space system on a real time basis, and we urge that the FAA's operating budget be increased to fund the spring 2000 process on a continuing basis.

Now air traffic control delays and their relationship to system safety is an issue at which ALPA has a considerable interest. Delays are symptoms or manifestations of a larger problem or uncontrollable situation in the national air space system.

The causes of delays are primarily weather, scheduling that is based on optimum weather scenarios, usable runways and gait availability, among other things.

Now it is important to note that the Eastern third of the nation experienced approximately three times the average number of days of severe weather this summer. It's also true to note that there are also locations throughout the system that sometimes are at absolute maximum capacity even without the influence of other factors, such as weather.

When these other external elements are added, the system simply collapses. We have possibly created a false expectation for the flying public by promising that people can fly where they want to, when they want to, 365 days a day, 24 hours a day.

To satisfy this demand, we have created a scheduling system that allows more aircraft into the same environment at the same time that the system can efficiently handle even on its very best days.

Environmental concerns have a great impact on the aviation industry -- noise restrictions, constraints, arrival and departures routes -- thereby, exasperating the delay problem. Airlines and manufacturers have developed and spent billions of dollars designing newer and purchasing quieter aircraft. Pilots are compelled to fly highly complex procedures at less than operational performance standards to comply with ground-based constituent concerns.

This industry has done all it can to alleviate these complaints. There must be a paradigm shift in the public to understand that part, that part of the cost of reducing delays may be more efficient use of terminal air space and aircraft performance capabilities, and this may result in an aircraft overflying somebody's house.

This wholesale acquiescence to environmental concerns may have to be amended if we are to thoroughly address the entire scope of the delay problem.

Additionally, resectorization of the en route air space can eventually produce some efficiency gains. In fact, RTCA has a special Committee looking into this concept, among others, to better utilize our national air space. However, any recommendations that will result in better management of our scare air space resources will not be possible without allowing the FAA to consolidate facilities, and that will require some tough political decisions.

ALPA's motto is and always be, "Schedule with Safety." We will continue to champion that standard and we will work with the FAA and the members of the aviation industry to develop initiatives that will improve efficiency as well as maintain and hopefully improve the safety of air operations.

We will oppose innovative capacity-enhancing procedures that do not maintain and improve safety standards. This is our bottom line, and it always be.

Thank you, Mr. Chairman.

SEN. MCCAIN: Thank you, Captain Woerth.

SEN. MCCAIN: Mr. Poole.

MR. ROBERT POOLE: Thank you, Mr. Chairman.

As director of transportation studies at the Reason Public Policy Institute in Los Angeles, I've been involved with air traffic control reform studies since 1981, and I've seen the debate change greatly over the years.

Today, I would maintain it's pretty widely agreed that, first of all, air traffic control is essentially a commercial service while air safety regulation is inherently governmental.

Number two: That FAA's corporate culture is poorly suited to running and modernizing a high-tech service business, which is what air traffic control is.

Number three: That air traffic control funding should be driven by the growth of activity and not by the ups and downs of a federal budget process.

Now who agrees with these points? If you look carefully at them, the Baliles Commission Report in 1993, the Vice President's National Performance Review ever since 1994, the DOT's Executive Oversight Committee in 1995, and the National Civil Aviation Review Commission in 1997.

We're all here today because of record air traffic delays caused by air traffic finally having bumped up against the limits of an obsolete air traffic control system, costing airlines and passengers literally billions of dollars.

That's why we've heard a number of airline CEOs start to talk about air traffic control possibly being spun off from FAA into some kind of a corporation.

The good news is we now have 13 year of actual experience with corporatized air traffic control in 17 countries, including Australia, Canada, Germany, Switzerland, the U.K.

What can we learn from that experience? First, these governments have all spun off the air traffic control service provider, but they properly kept safety regulation in government. Putting safety regulation at arm's length from service delivery actually increases air safety.

Second: The air traffic control companies are all operated on a nonprofit basis. Since air traffic control is a monopoly, it should be nonprofit with the excess revenues either reinvested in the business or used to reduce fees and charges in future years.

Third: These companies are all funded directly by their users by means of fees and charges. That makes the company accountable to its customers, and as they say in Canada, "User pay means user say."

Fourth: These companies all fund modernization by issuing long- term revenue bonds based on their predictable stream of revenue from fees and charges.

I think we have enough evidence now to see that air traffic control commercialization works. And by that I mean it solves that problems that have plagued ATC in country after country. After commercialization, we see costs go down, modernization speed up, and flight delays get reduced.

In no country has there been any reduction in air safety, so how can we apply this experience to the United States?

My organization has been working for the past year on a detailed proposal for a U.S. air traffic control corporation. We're getting input from the entire aviation community. We're not done yet, although we hope to have the airport out before the end of the year, but I can give you some general outlines of what we've concluded.

First: We think the stakeholder controlled, nonprofit corporation as they've implemented in Canada, is really the best model. It's working very well in Canada and has been for nearly four years now.

The proposed corporation would hire all the civilian air traffic control employees currently with the FAA, would provide civilian ATC in the United States and oceanic regions.

It would keep its books like a normal business, using general accepted accounting principals, would pay market based compensation to all its employees, and it would be free to define and purchase the best technology, like any private business does -- like any other high-tech business does.

The most important element of this reform, in our view, is to develop a corporate culture driven by user needs, and the best way to do that is to make the company depend on direct payments by the users for the services it provides.

Now, obviously, developing fair and simple ATC fees and charges is, in fact, the most difficult part of this project, and we haven't quite finished with that, but the general principle is that the users should pay for the services they receive and that all users and other stakeholders should be represented with seats on the Board of Directors. That's the way they do it in Canada and it's working.

Overseas experience shows that this kind of an air traffic control corporation can easily be self-supporting from fees and charges, and just like any other infrastructure business, electricity or telecommunications, they can use that predictable revenue stream from fees and charges to issue long-term revenue bonds for modernization.

And I'll note that most of these companies, their bonds are rated investment grade by the rating agencies because this is such a good business.

Of course, the company should be regulated for safety. It should be regulated at arm's length by the FAA just as the airlines are, just as pilots, mechanics, airports, and manufacturers are. And DOT should have oversight to make sure that the fees and charges are, in fact, reasonable, and Congress of course will continue to have oversight responsibilities over FAA and DOT as it exercises those supervisory functions.

Finally, let me just stress the urgency of this kind of structural reform. We've had all these Commissions dating back to 1993 that have said, this is what we need to do, and we haven't done it.

The current system has failed again and again to truly modernize this vital infrastructure, yet the shift to free flight technology, which you heard about this morning, is essential if we're going to avoid gridlock in the next decade.

A user-focussed air traffic control corporation will be up to the task of making this major change and then keeping up with the continually changing state of the art. This is not a one-time change, it's an ongoing process.

Most important of all, because it would be paid for directly by the users, it will be accountable for results to those users.

Thank you very much, and I'll be happy to do questions later.

SEN. MCCAIN: Thank you, Mr. Poole. A very stimulating proposal.

SEN. MCCAIN: Mr. Carr, welcome. And thank you for the great job that you and your people do.

MR. JOHN CARR: Thank you, Mr. Chairman, and members of the committee.

My name is John Carr. I am the newly-elected president of the National Air Traffic Controllers Association, and I represent over 15,000 air traffic controllers, serving the FAA, the Department of Defense, and the private sector.

I'd like to thank you for this opportunity to appear before the Committee to discuss the problems and solutions related to aviation delays.

I may be new to my position as president of the union, but not to the problem of aviation delays. I have over 20 years of experience as an air traffic controller, including 10 years at Chicago O'Hare.

I want you to know that the men and women I represent want to be part of the solution to this complex and very critical problem.

Continued dissatisfaction with the progress of national air space system modernization and the mounting problem of aviation gridlock has led some industry and government officials to calling for privatization or restructuring of the FAA.

I'm here today to tell you that privatization of air traffic control operations is not the answer. Privatization will not increase airport capacity. It will not speed up construction of more runways or airports.

Safe, reliable equipment will not be developed or installed any faster.

Privatization would, instead, chart a course towards undoing many of the benefits found in AIR-21 and would fracture the delicate balance of a workforce that holds this system together.

Privatization is a business oriented solution being offered by the airlines and others who might stand to profit from it. Proponents argue that competition in the private sector allows companies to provide services more efficiently while reducing costs. Yet, these same private companies will constantly balance their bottom line against an air traffic controller's bottom line, the safety of the flying public.

While on the surface, the solution may seem to save a dollar, in reality it makes no sense. As a matter of fact, we believe the safety of the flying public and the commercial efficiency of our air traffic control system are so intimately related to the exercise of the public interest as to mandate performance by federal employees which, as I'm sure you all know, is the very definition of inherently governmental in OMB Circular A-76.

In today's environment, controllers are under extreme pressure to squeeze more aircraft into already congested air space. We go to enormous lengths to ensure the safety of millions of flyers each year. We have no incentive to delay or hinder air traffic. Our motivation is simply to move aircraft as safely and efficiently as possible. The longer I work you the more difficult my job becomes.

However, the primary function of an air traffic control is to ensure the safety of the flying public, and we do not believe that we should be put in the position of compromising that safety to accommodate more passengers, more flights, or more profits.

Aviation delays are a multifaceted problem, and no single element is responsible A number of contributing factors, including growth in the number of travelers, scheduling decisions by airlines, bad weather, new air traffic equipment, underutilization of airports and policy changes have led to this record number of aviation delays.

One simple yet controversial solution to this complex problem, as others have discussed, would be to construct new airports or to expand existing airports by adding runways to accommodate larger numbers of aircraft.

Another solution involves a close examination of the use of our nation's existing airports. We believe certain city airports are more uniquely suited for increased flights than their associated hubs. Most hub airports throughout the country have underused secondary airports nearby.

NATCA believes that increased usage of these airports by passengers and airlines alike will help alleviate system congestion and delays. All you have to do is look at the success that is enjoyed by Southwest Airlines to see that there is unused capacity waiting at secondary airports.

System users must understand that they cannot continue to intentionally overload the system. As long as the airlines overbook runways during peak hours, delays will continue and passengers will wait. Even if controllers have the most up to date equipment and technology, delays will not be eliminated.

There is nothing on the shelf now that will eliminate the delays we have now.

We would simply be better able to keep track of your delayed aircraft.

Another solution of the problem of delays --

SEN. MCCAIN: The free flight proposal would not --

MR. CARR: It will not eliminate the delays you currently face. It will incrementally improve the performance of the system, but during peak hours it will not eliminate the delays.

SEN. MCCAIN: Thank you.

MR. CARR: Another solution to the problem of delays which we currently work on involves national air space redesign initiatives, which Captain Woerth alluded to.

Together with the agency, we have created numerous teams and redesigned groups each manned by specialist tasks with alleviating choke points and built in systemic congestion.

Critical sectors and routes have been identified, and we are working closely with the FAA and the users to rapidly change the dynamics of these traffic patterns while carefully examining each and every one of them from a safety perspective.

You see safety as foremost concern of FAA controllers. Private companies, however, have accountability to their stockholders, and profits are achieved at the expense of not only the employees but the system.

For example, the current Federal Contract Tower Program is characterized by inadequate training, inadequate staffing, communication lapses, and poor working conditions.

Proponents of privatization will often point to restructured aviation departments by governments abroad, such as NavCanada.

We feel this is akin to comparing our Cadillac with their Yugo. Countries that have partially or totally privatized air traffic control systems have air space which is very confined, relatively compact, fewer employees, fewer airplanes, and fewer facilities. The largest of which has been privatized is smaller than one-tenth of our system.

The United States, on the other hand, maintains the largest and most complex air traffic control system in the world. Together, we're responsible for moving half of the world's passengers and cargo.

Under the leadership of Jane Garvey, the FAA has turned the corner on its modernization efforts with the help of the people I represent, the air traffic controllers, engineers, and other employees.

A single organization with one mission, one head, and no ambiguities about the priority of human life is in this nation's best interest. Safety is our bottom line, and air traffic controllers are this committee's partners in fulfilling that single, very fundamental mission.

I thank you for your time, and I'll answer any questions that you might have.

SEN. MCCAIN: Thank you, Mr. Carr.

SEN. MCCAIN: Did you hear Ken Mead's comments that there has been an increase, incursions, and other --

MR. CARR: Yes, sir, I did.

SEN. MCCAIN: What needs to be done about that? Because there's a certain inevitability, the law of averages, obviously, is going to prevail here at some point. What needs to be done?

MR. CARR: Runway incursions and operational airs are up, and I believe that there are symptoms of problems that are associated with the increased demand we've discussed. They're also related, in small measure, to the installation of new equipment.

It should be remembered that while we're using 1970s radar and 1980s radios on 1990 scopes, as controllers and pilots, we are using 1950s separation standards.

Collectively, as a group, we need to examine whether or not it's safe and reasonable to change separation standards, and I believe that a wholesale decriminalization of the operational error and runway incursion problem would leave both pilots and controllers to knowing that not every minor error that they make jeopardizes their career in the field, and I believe that you would use those opportunities more for training and learning than for punitive discipline; and I believe that you would free up, to be perfectly honest with you, more capacity in the system if it was less punitive to both the pilots and the controllers.

SEN. MCCAIN: You have additional information, will you provide it to the committee?

MR. CARR: Absolutely. I would be happy to.

SEN. MCCAIN: I think one of the most disturbing things I've heard in a while is Mr. Mead's comments that these clear safety warning signs are on the increase.

MR. CARR: It's --

SEN. MCCAIN: Mr. Poole -- go ahead, Mr. Carr.

MR. CARR: Well, it's just very interesting the linkage between operational errors and delays because we have separation standard minimums. For instance, five miles comes immediately to mind. We don't have a published maximum, and with the FAA recently implementing more punitive measures towards controllers and pilots alike, similar to a three strikes and you're out policy.

After my first strike, I'm not going to be inclined to run them five miles apart, sir. I'm going to put a little extra room in for my family and my future, and that decreases capacity. It's only human nature.

SEN. MCCAIN: Mr. Poole, at least on this issue, he agrees.

MR. POOLE: I do, indeed. I think that makes a lot of sense.

MR. CARR: Mr. Poole, how do you respond to Mr. Carr's comments that a privatization of the ATC would then cause aviation safety to be relegated to a less than paramount importance?

MR. POOLE: I'd like to speak to that directly.

First of all, I very carefully avoided the term "privatization" because what I am recommending is not shifting air traffic control to a for-profit entity. I agree completely that there should be no question in anybody's mind about a conflict between profit and safety. This should be run in the public interest as a nonprofit organization with all the stakeholders represented.

But I think there are three reasons why safety would be improved by this kind of structural reform.

First of all, as ICAO itself, the International Civil Aviation Organization, recommends, and this is a direct quote from their director, the separation of these two functions, and they're pushing hard for this to be done in Europe, as well as around the world, you want to have independent third party oversight, not the FAA regulating itself in its role as service provider. It should be at arm's length, like it is at arm's length from the airlines.

Secondly, this kind of a corporate restructuring will indeed make it easier to modernize efficiently and faster by freeing up the financial resources through revenue bonds and completely private sector type of procurement process, that you'll get newer technology in place faster. That will inherently improve the safety level of the system.

Third: All of these corporate entities that have been created abroad are required to obtain private liability insurance in addition to having the safety oversight from their government agencies, so that provides yet another layer of safety oversight because they have to satisfy the liability industry that they are, in fact, using safe procedures and state of the art techniques and so forth.

So you add that additional layer of oversight to make this an even more safe system.

So I think on safety grounds there's no question this will be a winning proposition.

SEN. MCCAIN: Captain Woerth, I understand that you represent a union and you have the right to go on strike after you go through certain process, and that is a treat that I not only respect but do everything in my power to make sure you keep.

I'm disturbed at the sick-out of the American Airlines Pilot, I'm disturbed at what United Airline Pilots did, because it didn't resort to the tradition right to strike. They basically inflicted punishment on travelling Americans.

Now, how do you justify that kind of behavior, specifically both the American Airlines, although I recognize they are not a member of your union, but what the United Pilots just did in order to exercise leverage, rather than take the traditional path, which is available to you, and say, we are going on strike because our demands in the interest of our pilots are not satisfied?

MR. WOERTH: Well, Mr. Chairman, as you already pointed out, ALPA does not represent the pilots of American Airlines, and perhaps the person sitting next to me can better answer that question.

SEN. MCCAIN: I don't think so.

(Laughter)

MR. WOERTH: I don't think so either. Maybe not. Nice try.

But, sir, as to United Airlines, specifically, I think it is in the record that the pilots of United Airlines did about a year and a half ago try to work with management, actually warned their system, which was, let's face it, we're in a very success economy, everybody wants to add as much capacity as they can. They've got some ferocious competitor sitting at this table that are more willing to take their passengers.

And they said, you know, we're not sure that you can continue to rely on all this extraordinary overtime the pilots have been flying year after year, so please cut your schedule back so not to inconvenience the customer.

They're on record as saying that. They've said that on television, and as to that matter, the airline did not really downsize its system, and really until this month, to really match up what the airline can provide.

So the pilots did not fly as much overtime as previously. They told them they were going to, and actually, now I think it's about what they were doing for the rest of the summer, the airline's running very well.

It should also be noted, sir, as I mentioned, United was especially affected, I believe, with the location of the convective activity this summer. It appeared in June and July, it was just unbelievable the line of thunderstorms. When you have two hubs -- and I know Mr. Carty is trying to address his issues with Chicago -- in between Chicago and our other massive hub in Washington Dulles, the system really did become overloaded.

SEN. MCCAIN: Well, I don't want to belabor the point, and I won't. I've made my point, and there's no point in continuing to bash these people.

But what I would just finally add is a footnote. Many of these people are friends of mine who used to be in the military, and they should appreciate what this does not to rich Americans, but particularly in the summertime when people literally have saved for a year to take a vacation and find themselves out of any capability of doing that. It's really inflicted a lot of harm on innocent Americans with this kind of work stoppage.

I do take your point, that United Airlines warned management that they would not fly that much overtime, but they should also, I think, take into consideration a lot of people's lives were significantly disrupted by this action.

Again, I won't belabor the fact. In fact, I don't intend to speak further on it unless I'm asked for an opinion because I think it would be rather gratuitous, but I hope you'll communicate with the members of your union that one of the important assets they have is the goodwill of the flying public and that's put at risk.

MR. WOERTH: Thank you, sir. If I could response in this regard. I have done that. I actually pulled it out, and I can give you a copy of it, what I put in our Airline Pilot magazine, which is distributed to about 72,000 people, with a message from the president on the importance of following to the letter the Railroad Labor Act. I'll make that available to you, sir.

SEN. MCCAIN: Thank you very much, Captain Woerth.

Mr. Mullin and Mr. Carty, I just have a comment. I think you have been diligently pursuing better conditions for the flying public. I also think you have a long way to go. Mr. Carty, do you share Mr. Mullin's concern about the U.S. Air-United merger?

MR. CARTY: I do agree with Mr. Mullin that because of the importance of network to our business, a step by a major competitor dramatically strengthen, broaden the network of that carrier, and in this case, United-US Air, has got to cause carriers like Delta and American to think in turn about what they must do as a counterbalance to get their network as broad and as strong as their competitor. But I think it could lead to subsequent mergers.

SEN. MCCAIN: I.e. it would lead to subsequent mergers?

MR. CARTY: Yes, sir.

SEN. MCCAIN: Thank you very much.

Senator Cleland.

SEN. CLELAND: Thank you very much, Mr. Chairman.

I just want to applaud all of you for being in this tough and exciting world. It's got to be one of the most difficult jobs in the world to try to manage or lead an airline today, and Captain, you and your colleagues have my undying admiration and support for literally the risk you take on behalf of us, the flying public, everyday.

Mr. Poole, thank you for trying to analyze these challenges; and, Mr. Carr, thank you very much for your wonderful group of air traffic controllers who day in and day out, 24 hours a day, try to do the best they possibly, humanly possibly, can do.

Mr. Mullin, let me just say everybody knows this has been a tough season the last six months in terms of on-time performance for the whole airline industry, and yet Delta went from 10th to 3rd. You improved your on-time performance.

To what do you attribute that, other than great leadership at the top?

(Laughter)

MR. MULLIN: You took away my line.

Actually, it's a system that has no silver bullet to it. When we were 10th in 1997, we actually put together a task force that identified 70 separate initiatives to be taken across the system at every single one of our airports and hubs, and thinking through how it was that we could better schedule the airline.

I would also add that we have periodically taken steps, particularly in Atlanta, to de-peak the system, to get a better flow. Several references have been made to schedule, and how you run your schedule is crucially important. It is also very important that you have your team and your employees with you throughout this kind of a process.

We've worked very hard on that, but it is a system where you have to take it every single location, one by one, and put an improvement program in and then hopefully put the pieces of the puzzle together and away it works.

SEN. CLELAND: Thank you very much. We appreciate your leadership.

Any reaction to the phrase, "Capacity benchmarks," owing to the fact that given the, in effect, free for all economically out there and the competition between airlines under deregulation to go after markets, and you want to expand your markets and go after every customer, just like we want to go after every voter in an open market environment, you want to expand that market and go after customers.

But it seems to me that we are really, to use an airline phrase, air pilot phrase, "we are pushing the envelope now," and under that free for all some airlines at some airports have, in effect, scheduled more aircraft, more tin on the air and on the ground than the capacity of the airport can handle or the air traffic controllers can handle on their best day.

Therefore, the FAA comes up with "concept capacity benchmarks" as like a suggestion for remodel action.

Any reaction?

MR. MULLIN: I think the fact that we have to consider capacity benchmarks is just a truly unfortunate aspect of what has occurred here.

Go back to the fundamental point that we do exist to serve customers, and those customers wan to fly where they want to fly, when they want to fly.

We are an industry that drives our mission from service to those customers. Capacity benchmarks is nothing other than metering the service or constraining the service and cutting down the options that the travelling public has.

I think that given the situation that we have here and to echo some of the things that Don Carty stated, in the next two to three years, I think we've got a really unique challenge at a number of these airports so that these capacity benchmarks maybe, in fact, be necessary, in order to just deal with the situation which has gotten somewhat out of control.

But to allow ourselves to create a situation which has capacity benchmarks throughout it, is to sub-optimize this system. This system is big enough. I mean, this problem of reaching a billion passengers by the year 2010 is not going to go away in 2010. And in 2020, nobody's run those extrapolations, but I'd guess it's going to be 2 billion passengers. This is America. There's enough room out there for us to run an aviation system that serves the travelling public.

Our job is to create capacity in the airports, in the air traffic control system, and in the airlines that can serve the travelling public. Anything that has constraint built into it, is not doing their job, and we've got to get the system built in a way that just allows us to have enough capacity to provide the travelling public with the services they need and they deserve.

SEN. MCCAIN: Mr. Carty.

MR. CARTY: If I could just elaborate a little bit on what Leo said. I agree with what he said. Somebody made the reference earlier, if you go back to the FAA forecast for the Year 2000, which was developed in 1993, it was for 700 million passengers. That's what we've got. So, in a sense, we shouldn't be surprised.

Now we have a forecast for a billion passengers. That's like adding United, Delta, and American to the system again. Now that's a lot of growth and demand on the system, and we certainly don't want to be here five years or seven years from now saying, gee, we knew it was going to happen, but it happened anyway, and we weren't ready for it.

In the case of the capacity benchmarks, to come back to your specific question, I think the benchmarks will be very helpful in giving us a far more realistic picture of what the current capacity is.

I think they will also allow us to set targets for improving that capacity by, as Jane alluded to earlier, looking for the choke points and taking them out of there, and ramping up that capacity.

And it will also help the airlines, as I think they're helping American today, to look at the hubs or the predominate schedule and make the schedule more workable. But I'm sitting here looking at a chart of LaGuardia's taxi-out comparison on only good weather days in September. Only good weather days.

And they look -- I'm just looking across the hours of the day. It looks like we're running up to the 50-minute level, and a year ago we were below 20 minutes. So we're almost tripling the taxi-out delays at LaGuardia. There are three or four airports around the country where that clearly is also happening.

I'm not sure, aside from, as Leo said, just keeping to work to push that capacity capability up at LaGuardia, what a benchmark is going to tell us. Because, much as I love Leo, I'm not going to retrench in my competitive efforts to take all the passengers in LaGuardia and nor is he. That's an airport where we actually had to find capacity limits, i.e., slots, and now we've, in effect, liberalized those.

So it's going to be a public policy debate for the next two or three years. I think it's a tough problem.

SEN. CLELAND: I wasn't going to get into this until the end of the -- until I had asked some other questions. I might say now that since I'm the lone individual here --

(Laughter)

SEN. CLELAND: -- the future of American Airline travel is now in doubt.

(Laughter)

Let me just get to a philosophical point here. And I don't really have an answer for it. I don't really expect you to have an answer for it. Just whatever reaction you would have is okay. There's no right or wrong answer to this.

1938, the Civil Aeronautics Board was formed, in effect, to promote domestic or commercial aviation, it seems to me, in both aspects. Look after the, quote, "commercial side," that we had viable commerce and in airlines, and that that was a good thing for America, and we grew our airlines.

Secondly, though, that there was a public purpose served, the public interest was served, and under that sense, basically, every flight, every ticket basically every move that an airline made was, quote, "regulated," and it had to kind of check off with this Airline Aeronautics Board.

There was control, there was coordination. There was a certain sense of a national system being worked. You take that off, in effect, you take off the gloves, and it's American versus Delta, it's grab it and growl. It's go after the market, and if you don't do that then you don't survive. Survival of the fittest.

However, the problem is, we didn't deregulate safety. We didn't automatically build in capacity when you increased by 300 percent your customers.

So we deregulated, in effect, the economics of air travel, but we didn't deregulate the standards by which or the capacity that actually determines your market and your ability to serve your market.

It seems to me that we're kind of sown to the wind, we're reaping the whirlwind now, that we've kind of skimmed off the best aspects of deregulation. Lower ticket prices by 40 percent. Mr. and Mrs. America, you can fly. And you can have more choices of where you go and how you get there.

Good for the consumer, looked like deregulation, quote, great idea.

The problem is now it's everybody go to DFW at the same time. Over 50 airlines scheduled in a five-minute period -- 50 landings scheduled in a five-minute period of time, it only handles 34 or 37 on a great day, 24 on a bad day, and we've got this gridlock choke points and deteriorating service, deteriorating perception of airline service and so forth.

We are, I think beginning to reap the whirlwind of deregulation. I'm not sure where we go next. I realize your emphasis in the private sector is not so much airline as a service but airline as a business now. You've got to make a profit, and you've got to move forward, and you've got to expand your customer base.

The problem is, over here, we have only a limited amount of air traffic controllers, we have only a limited amount of runways, and we have a limited amount of air space, and I'm not sure what we do. I think if we just increase a little bit of that, we're just dealing with the problem of the edges. You're still going to be pressured to expand your markets forever.

I think we're somewhat in a Catch-22 here. I realize the demand that you have, but I also realize the realistic point that so much of what you need is really out of your control, and that somehow we have to begin thinking again of this whole thing as a system, to plug in some of the public interest aspects of it as well as the private profit aspects of it and see if we can't come up with some innovations here, not throwback to maybe total deregulation but at least some consideration for benchmarks that four runways can only handle so many aircraft.

There's only so much tin you can put in the air and so much tin you can put on the ground safely. And then if you go beyond that, I think that's what the benchmark is all about. If you go beyond that, you're now in a risk zone, and the more you go beyond that, you're incurring additional risk, additional delays, and additional problems.

I think that's what the benchmark is all about, and it gives us part of what I think we're after, and that is, some basic definitions that we can all agree on, that here's this standard, and if we go here, we've got a problem. If we meet the standard, we should be okay. That kind of thing.

Also, a realistic assessment that the public out there can evaluate the rest of us on.

Captain Woerth, let me just say that some cargo airlines are experimenting with a satellite and cockpit bay system, in which planes signal their locations to each other. I'm told that it could allow pilots to fly closer together at their discretion, thereby increasing the capacity of air lanes. Do you have any reaction to that?

MR. WOERTH: Well, our public policy statement as to traffic separation still believes the absolute safest way to do that is with the help of air traffic controllers having third parties separate us all.

I have no trouble having more knowledge in the cockpit, having that information to us, like we have in TCAS and other things. We'll accept any amount of information we can get to help it be safe, but the primary responsibility that I think will ensure the safest air traffic between the cargo planes and passenger planes will be with our brothers at the Air Traffic Control Association.

SEN. CLELAND: Mr. Carr, ultimately, you and your people are the traffic cop on the block.

MR. CARR: Yes.

SEN. CLELAND: The traffic cop is not running for mayor. He doesn't want to get the most votes, but he's the guy that enforces the neighborhood and makes sure it's safe.

So you're the man. I mentioned earlier, a little bit joshing but not really, about air traffic controllers being happy in their work. What do we need to do keep our air traffic controllers, our traffic cops out there, that want to be on the beat? They volunteer for this duty? It's a tough duty and tough responsibility, and it isn't, like airline flying itself. It is an unforgiving before. And what do we need to do to keep your folks happy and to move forward in this business?

MR. CARR: In my person opinion and in the opinion of the people that I represent, if the will of the Congress and the American people is to create open-ended capacity with unlimited growth potential at the top, we need to start pouring some concrete. There just simply are not enough runways, taxiways, terminals or gates to accommodate the projected growth in passenger volume between now and 2010.

We are happy, by the way, and we appreciate your comments, and sincerely appreciate your support of our organization, Senator.

We like to be involved in the solutions on the front end so that we don't have to mitigate the impact of bad decisions on the back end. I believe --

SEN. CLELAND: Can we talk about that for just a second.

MR. CARR: Absolutely.

SEN. CLELAND: Do you think you'll have some input with defining some of these capacity benchmarks since your people live with every takeoff and every landing and have probably as good a feel what capacity on a good day should be, what that benchmark would be?

MR. CARR: I would expect that we would. Actually, our organization has built a very collaborative relationship with Administrator Garvey and with the FAA and as opposed to a traditionally perhaps adversarial labor management relationship, we very much find ourselves in the same lifeboat, and we're both going to have to row to get where we're going.

They have welcomed us on with open arms on the front end of many of their projects, and we look forward to a continuing good relationship with the FAA. We believe it is a real partnership that has potential to grow the system, to increase capacity, to improve relationships, not only with the users but with the stakeholders and with the pilots.

As I spoke to the chairman earlier, we are concerned that there is a need to decriminalize errors within the system.

Five miles of separation is the legal minimum. 4.9 is an error. It is not necessarily unsafe, it's just one of three errors I get to make in my career before I go hungry. So we're very much concerned about that.

SEN. CLELAND: Could you run -- it was a fascinating litany there that you mentioned about 1950s separation standards. 1960s something, and 1970s radar, and then 1980 something or other.

We've been told, you know, that the FAA has got this advanced system out there, and it's only three or four years old and all this kind of stuff. But run that litany by us again one more time.

MR. CARR: Well, the radar system, the actual radar which reflects off an aircraft and comes back and tells us the position altitude, that technology has been around soon World War II, and radar is what radar is. It reflects of a target, it comes back, and there you are.

It isn't substantially different now than it was then, except that the information it provides is much greater.

Our radios have been improved, however, the technology, I would say, is still in the improvement stage. We're beginning new systems on line. And then the radar displays, the consoles and displays, thanks to Jane and the folks at FAA, are all new in every center in the country. Those are less than 36 months old at every air traffic control center in the country, and we're in the process of bringing a similar system to every terminal, but it's going to take time. There's over 170 of them that we have to install.

And, again, we take the safety of the flying public as our first and primary goal, so we're not going to throw a bunch of scopes in, plug them in, sign off on the warranty, send in the card and be happy with it. It takes some time.

But we're very happy with the progress of modernization. But the separation standards that we use are archaic, they're ancient. Three miles and a thousand feet has been around since the advent of aviation.

And to be perfectly honest with you, on behalf of my friends, the pilots, "see and be seen," is still the bottom line separation standard to which they are held, even when they operate in clouds.

I think that's old and it could use some review.

SEN. CLELAND: Thank you very much, our distinguished panelists. Mr. Mullin and Mr. Carty, thank you for being here. You can count on me to help expand capacity. Captain, we'll continue to follow our wonderful pilots into the air. And, Mr. Carr, thank you for helping us all stay safe.

Thank you very much, Mr. Chairman.

SEN. MCCAIN: Thank you, Senator Cleland.

SEN. ROCKEFELLER: One observation. Every time -- I keep coming back to this point just simply to make it -- every time now I walk through a large airport, in my mind, in my eye, I am able to with amazing accuracy double everything that I am looking at. Double the passengers, double the gateways that aren't there, double the airplanes that will be there in 8, 10 years. So, again, the urgency of all of this.

Let me ask a couple of questions, and I know you've been here for a while.

It is a fact, and I'd put this to all, although it's obviously directed more at Mr. Mullin and Mr. Carty.

There is this business of overscheduling, and one of you did indicate that a vacuum cannot be allowed to stand because somebody else moves into it, you are in a classically competitive business, and therefore it's sort of a chicken and egg question. You're overscheduling and yet you can't afford not to. So what can possibly happen on that?

Well, one of the things that I suggested in my opening remarks is that you could be nervous about antitrust. You can't meet, you can't talk about, well, I'll do this if you'll do this, which would in fact be in the interest. You know, I won't schedule these things if you won't schedule those things, which would in fact be in the interest of delays and probably national aviation policy. It would probably be in the interest of it, but you can't do it.

Do any of you have any thoughts as to ways around that or possibilities of DOT using -- I don't know, I'm not a lawyer so I don't know how to phrase the question; but you understand what I'm asking.

In other words, antitrust may stand in the way of sensible and safe aviation travel in that area?

MR. CARTY: Yes. I think, Senator, that none of us want it to stand in the way of safe transportation, and I don't think it has. I think the implication is all back up on the service side, to dependability and reliability, because these guys, nor do the corporate cultures of the big airlines are going to tolerate an unsafe air system. It's not in any of our interest --

SEN. ROCKEFELLER: I'm not questioning that. I'm not questioning that.

MR. CARTY: So when an airport gets over capacity, it's a service issue. And it is true that in the past on a couple of occasions the government has sought ways to provide antitrust immunity for airlines to sort out schedule problems for various reasons, and it could be done.

I would go back, I think, to Leo's comment, is that it's not the ideal solution, because in effect what you're doing is you've got creeping re-regulation of the business going on again. Because we haven't provided the infrastructure to really let it rip, we are saying to ourselves we're going to limit the marketplace in some way, either by telling Delta and American through a slot mechanism that they can't fly or agreeing that Delta and American should get in a room and sort out the LaGuardia problem.

Either thing is probably adverse to providing the kind of capacity that the economy in the market is demanding, but, as you point out, might well be consistent in a very short term with improving service in the industry.

There is no question two days in a room with all the airlines that fly airplanes in LaGuardia, you'll have a LaGuardia schedule that will work. There's no question about that.

Each time the airlines have been granted antitrust immunity to sit down and talk about a scheduling problem, they've always sorted it out. There was a time a number of years ago when there was some transcon capacity issue, and the government was very worried about it. I think the meeting took 20 minutes, and flights were eliminated. So it can be done.

But I go back to Leo's opening comments. It's not really what any of us and, more importantly, our economy is looking for. We're putting constraints on the natural marketplace.

SEN. ROCKEFELLER: You are by doing that. But I then go back immediately to my 10 years hence scenario. When everything today is doubled, does that change things at all? Leo?

MR. MULLIN: Just an elaboration because I agree with what Don said. I think, Senator Rockefeller, that if we do that it is just short-term. I think while you stepped out, I just made the observation that America is about growth. And we've all talked about the 1 billion passengers, and you had your own visualization of it when you walked through the airport, and it's going to be 2 billion passengers by the year 2020.

This problem is going to be with us all the way along. What we've got to do is get the solution for the whole long-term problem. So if we get together in LaGuardia, which is desperately in need of some kind of solution, by the way; and I'd almost advocate doing this because it's kind of sick up there right now.

But I would really only want to have that privilege for a very short period of time and then get at the hard work of the long-term solution.

MR. CARTY: If I could, I'd like to comment on a question that you asked earlier that is related, and that is this question of whether the federal government needs to do more to incentivize the kind of airport development that needs doing.

I really do think we've become subject to the tyranny of the minority in a number of communities. All those folks that travel in and out of O'Hare, most of whom live in Chicago and are fed up with being on the runway, are being held hostage by a very limited political interest around O'Hare airport that is blocking another runway. That runway should happen, whether we build another airport in Chicago or not. The current activity in Chicago dictates another runway in Chicago.

The City of Boston has needed another runway for a long time, and we are still waiting for that.

These are very tough issues, and I have the good fortune not to be a politician so I don't have to be buffeted by all of these influences, but from our perspective it seems so clear that the majority of people using an airport in many of these cities, many of them actually live and work in those communities, want more capacity and better service, and in most of these cases, there is a tyranny of minority that has tied them up in the courts and making runways that should take 2 or 3 years take 8 or 10.

Now the good news is we can do it faster than Europe. The bad news is we do it a lot slower than they do at Asia.

SEN. ROCKEFELLER: All right. Thank you.

I think everything should be on the table again if we're to move forward on this.

This is put in an entirely constructive way, and I'll start out by giving it a predicate: Back in the late '60s and '70s in West Virginia, every time there was a dispute, a labor management dispute, between coal companies that didn't want to do anything and unions who had problems at the face of the mine, so we were living under a regime of TROs, temporary restraining orders, and nobody was mining coal, and West Virginia's unemployment continued to increase its lead over every other state. So that was bad for the state.

Then, it's hard to even sort of trace the date or the conversation, but folks got together, and they said, this is hurting us, this is hurting our company, this is hurting our union, this is hurting production being on strike. And there was the culture of non- giving on both sides.

I'm not saying that in your case, but it was true at that time. There was an ethic that you simply didn't give. You went to court before you gave anything at all.

Now the United situation forces us to look at this question, I think if everything is going to be on the table, in terms of labor management relations in the airline industry, in the next 10 years, as we are overwhelmed by what the Secretary indicated would be runways that would be built on time, and I'm questioning whether or not that's true.

What you can build for $100 million in Boston may take 850 million in St. Louis, depending upon lots of things.

For example, I have no idea what went on in all of that, and I'd say referring generally to the situation. I have no idea what the result of all of that was.

But what if the result were such that United were unable, for example, to take more of the strike and thus gave wage increases or benefit increases, and I have no idea of any of this, that they were able to pay but that other airlines would not be able to afford.

But then if there were, generally speaking, a sort of tradition of parity within the airline industry, that then caused other airlines to crash, or something short of that word. That was a little bit too dramatic. And that, in turn, came back to hurt a number of pilots or other folks who belong to unions.

So what I'd like to get from both management and labor is how you see the current crisis, the urgency of the solution, what Mr. Carr said in terms of working -- having found a relationship with Jane Garvey, and I understand that, because I think she's not only superb but wonderfully easy to work with. And I'm not assuming that it could be any different otherwise.

But can you just give me a sense of has anything changed? Do either sides see a different responsibility in terms of this doubling of traffic and all the rest of it? I've double-asked the question.

MR. WOERTH: Well, Senator, I think everybody at this table supports a collective bargaining process. There is just no substitute in a free society, and it has its rocky moments, and it has its smoother moments.

Right now, we're probably having a time where there's a lot of focus, and particularly in our industry, because we can't get out of the newspapers not matter what we do. I mean, we're the front page of every paper, we're on the TV every day. It's because of the importance of our industry and the frustration with the delay. This is probably the fourth or fifth hearing we've held on it, so we're more under the microscope than ever before.

But I don't think the fundamentals of the give and take of collective bargaining has changed all that much, especially in our industry. I think it should be also noted that people -- and Secretary Slater mentioned it -- the first half of this decade was a very terrible time financially. There was a tremendous -- we thought we were going to lose the whole industry. Where was the bottom?

President Clinton formed a special commission. We're that troubled, how this industry was even going to survive.

We did start to turn around in the mid-'90s and had some good years profitability since.

I think it needs to be said and recognized in those early 1990s, there was a tremendous amount of concessions and give backs, and understandably so. if you're going to save your airline, somebody is going to have to do something.

And now there is a little bit of pent-up demand right now and some impatience. People are looking at a successful marketplace, and they want to regain certainly what they gave up.

We constantly refer to that, airline passengers, there's three times more of them flying since 1978, and 40 percent cheaper in real terms offer the tickets, and that wonderful.

Even some of our best contracts today that we've negotiated, including the United contract, doesn't barely keep up with inflation in the last 20 years, even of the best contract we have.

So collective bargaining is going to continue. We understand that if we frustrate the public too much or upper management upsets the public too much, the last thing I think either one of us wants, and I think the Congress wants it, either, to get back into our business, I think I certainly am committed to resolving this in a private sector. That's through collective bargaining, and we're committed to that.

MR. CARTY: I think to some degree, Senator, my own perspective is that, to some degree in the last several years, we've kind of lost track of something Leo said earlier, that really this needs to be all about serving the travelling public, because the success of the employee and the success of the commercial enterprise is dependent on that.

And there certainly has been some history, and Duane touched on some of it, the industry in real doldrums, and then finally digging their way out of it.

There's some other history, too. The industry is changing, continues to change very quickly. The advent of a new technology airplane, the RJ; the advent of these international alliances, which I think makes the employees of every company feel a little bit insecure, is the enterprise trying to give my job to somebody else. And all that clouded by these economic issue that Duane referred to. In a way, I think we've lost our way a little bit.

And I do think the United experience and a couple of experiences in the 18 months before that have sobered us all up a little bit.

National Railway Labor Act was designed to allow the collective bargaining process that I think all of us endorse to occur in a way where the travelling public would not be harmed, or would at least have fair warning if they were going to get harmed, 30 days notice, a cooling off period.

Unfortunately, the last 24 months that hasn't happened. The travelling public has been abused badly, and I don't think that's a unique responsibility of labor. I think it's a joint responsibility of labor and management to get focused on what the law is, remind ourselves.

We need to insist that we all follow the law, and labor's got to also focus on the fact -- I think Duane has a very good editorial he's put out in the ALPA magazine -- on getting back to a collective bargaining process that really runs with the spirit of the law that exists and find different ways to begin thinking about negotiation.

What do we have -- what interests do we have that are common, to get back to your West Virginia story. Let's quit spending all the time on the things that divide us, the difficult contention that inevitably occurs by dividing up the economic pie, and let's get back to a relationship of trust that the management of these companies aren't trying to do away with their jobs, and let's look for common overlap of interest, and let's start the bargaining process by trying to agree on all the things that we share an interest in rather than all the things that divide us.

And I think we can get back to healthier labor relations in this industry. We are certainly determined to do so at American, and I have a good sense that the leadership of our major labor unions are on the same page.

MR. WOERTH: Could I add one thing, Senator?

SEN. ROCKEFELLER: Sure.

MR. WOERTH: I think maybe an appropriate analogy, since we're talking about ATC delays, I think we've all agreed that getting some of these contracts on time, that is adding to the frustration. I think we're all committed to getting these things.

When they're amendable or expire, the closer we can do that and start early enough, and whatever processes we have to do to get them closer to their amendable date, the longer they run without a contract, an expired contract, the frustration builds. I think we're all committed to getting the closer to where we are on time, is not that much different than this industry. People would be a lot happier on time. Not just travelling public, but employees and shareholders alike.

SEN. ROCKEFELLER: I just remember the difference that it made for a period of 15 -- well, actually, it still pretty much continues in West Virginia. Our problem has been mechanization of the minds. But the labor and management thing, it just completely changed because they decided that they are each losing in the process. I just wanted to put that on.

I have a lot more questions I want to ask, but I can't, because I have to adjourn this hearing and open another one for some confirmation hearings.

I thank you all very, very much, and you're free.

END

LOAD-DATE: September 19, 2000

Document 7 of 110.


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