On Congestion Pricing, Etc.

Airline veteran turned Unisys analyst talks capacity, a need for the right discussion.


AB: The U.S. House and Senate each has its version of what needs to be done. What’s yours?

Kuhlmann: We need to begin thinking about modernizing and creating efficiencies for everybody; if that takes a little skin off somebody’s hide, it needs to be equitably shared. But we need to move ahead; there needs to be a decision. It’s the fiddling while Rome burns thing.

The first thing I would do is put money into research into what system will be the optimal operating plan for the long-term. People need to understand that we are throwing a lot of money into the system already, and all that’s doing is perpetuating a system that’s not working very well.
The biggest thing that needs to happen is we need to focus not on who will pay and who’s going to be hurt, but what can we do to make it all work.

Now, that won’t solve the problem at LaGuardia. But that’s a separate discussion.

AB: And what about the proposed congestion pricing?

Kuhlmann: We already have it. If you go to American.com or Southwest.com and you want to fly at 5 p.m., chances are that, if you search by price, that flight is not going to be available. It will cost more. The airlines, through revenue management, already congestion price. They don’t let the five o’clock into New York seats into the cheapest bucket of fares. The consumer is already paying for access to those flights that are prime time.

AB: What about our investment in infrastructure on the ground?

Kuhlmann: I think we’re about at 1948; and not just in the U.S. The only places that you see substantial infrastructure change being made is in the Middle East and in Asia. The case to the public of the benefit of having a functioning air travel network has not been made. When you consider that the airlines are directly responsible for 8 percent of the global GDP — people don’t know that.

AB: What about funding from AIP and PFCs?

Kuhlmann: You can’t put together a long-term plan to create a viable infrastructure when Congress has the right to say, this year you get $10 million, next year something else. What needs to be undertaken is a realistic view of what’s necessary and what the cost and benefits are in either expanding the infrastructure or not.

It’s a clear equation. You don’t want another runway? OK, you’re going to run into the LaGuardia situation where eventually there is nothing left for new entrants or expansion. It’s a stark decision.

AB: Any specific thoughts on the specific bills now in Congress?

Kuhlmann: My perception is that they are fighting over the interests of various groups rather than saying the system needs to be fixed. We need to agree on that. We’re doing it in reverse — we’re talking about who gets hurt and who gets help, and then maybe something new will happen. I don’t see that as a helpful approach. We have a system that’s slipping into all sorts of chaos; that needs to be the focus.

When you have aircraft taking delays of an hour or so simply because there’s not enough airspace, to say nothing about the runways at the other end, that should be a warning sign. Then if we get more airspace and they have no place to land, there’s another warning.

If all of these very light jets come into play, that will add enormous number of operations for a very small passenger increase. If we look at the proposal of RyanAir, if it decides to fly the North Atlantic under Open Skies, it’s adding aircraft to a very congested area, even if they use outlying airports -— Providence and Baltimore, smack into the mess of the East Coast corridor.

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