FEDEX CEO SMITH TESTIFIES ON FUNDING FOR FAA

The Senate Finance Committee issued the following testimony from a subcommittee hearing: TESTIMONY OF FREDERICK W. SMITH CHAIRMAN, CEO AND PRESIDENT, FEDEX CORPORATION CHAIRMAN, FEDEX EXPRESS ON FUNDING THE FEDERAL AVIATION...


The Senate Finance Committee issued the following testimony from a subcommittee hearing:

TESTIMONY OF FREDERICK W. SMITH CHAIRMAN, CEO AND PRESIDENT, FEDEX CORPORATION CHAIRMAN, FEDEX EXPRESS

ON

FUNDING THE FEDERAL AVIATION ADMINISTRATION

Good afternoon. My name is Frederick W. Smith and I am the chairman, CEO and president of FedEx Corporation and the chairman of its FedEx Express subsidiary. It is my honor to be before you, representing the more than 143,000 men and women working for FedEx Express, the nation's largest express transportation company. Through our integrated air and ground network, we provide our customers with express services for documents and goods to every address in the United States and we connect those customers to over 220 countries and territories around the world.

The challenge before you is to secure the future of air transportation in the United States. Will our airlines be able to provide world-class services to passengers and shippers both within and beyond the U.S, or will our air transportation system grind to a halt, with growing demand by users chasing limited services provided by an outdated technology?

The Federal Aviation Administration has proposed a new system of air traffic control which they call the Next Generation Air Transportation System ("NextGen"). This system would end the decades-old dependence on ground-based radar and take advantage of new satellite technology to provide a more effective and efficient system. This system would increase airspace capacity, provide U.S. passengers and shippers with more reliable service, and promote environmental goals by eliminating inefficient routings and traffic holds - all goals that, in this summer of travel delays, high fuel charges and climate change concerns, are vital to our nation's future.

The debate so far has centered on how to finance such a new system. My company does not favor one method over the others. But we do believe that there are some basic policy goals that should guide your choice of financing. First, all users of the system should pay their fair share. Second, the financial arrangements should recognize that the nation's airspace is a critical asset: it protects our national security and it is an economic pillar for all types of consumers and businesses. Third, the system should raise sufficient funds not just to sustain our national air traffic control system as the safest in the world but to modernize it, allowing it to carry forward that level of safety into the coming decades while expanding in size and improving in efficiency.

In developing a financing plan to fund the system, this Committee should be aware of the vital role that air cargo and express industries play in our national economy. We deliver the high-value, time-sensitive cargo on which this economy depends, and we connect U.S. businesses to the world. We operate the transportation system on which the U.S. Postal Service relies. We operate at large and small airports throughout the U.S, ranging from Kalispell's Glacier Park Airport in Montana to New York City (where we fly to both New York's JFK and Newark's Liberty). Mom-and-pop shops, multinational conglomerates - in big cities and in rural locations - we serve America's businesses. And those businesses must run efficiently and on-time. That's why we think the work this Committee will do to reauthorize the taxes that fund the FAA, coupled with the work of the Commerce Committee to reauthorize the programs of the FAA, including its air traffic control functions, is important not just to the airline industry or to the air cargo industry, but to the entire U.S. economy Our shippers expect their packages to be delivered on time. We guarantee on-time service to our customers or we will give them their money back. That's a powerful reason for FedEx to operate an on-time system - not only do our customers depend on our timely service, but our business model does as well.

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