Air traffic control is the main limit on airline growth

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 22:02

   What do you see as the biggest limiter of your business? Is it airport capacity? No, it's air traffic control. It's by far air traffic control. Air traffic control is 90% of the issue. How do we finally, this is the great white whale air traffic control modernization. Yeah. Is there a path to, it's like a complex technical project, it's a complex social and political project. Can it be done? It can be done.

2. 22:24

   And look, we have, the president is supportive. He's the most pro aviation, you know, he knows about aviation, likes talking about it. We have support from him. Secretary Duffy is great. I can text him right now and get a response, you know, unless he's in a media, unless he's out, you know, speaking or something, I would get a response within 30 seconds. Brian Bedford's best FA administrator we've ever had.

3. 22:44

   But it's the government. It's just so hard for the government to give the, I mean, just take the appropriations process. These are the kinds of capital projects that are five to 10 years to get done. They do an annual appropriations project. So they start at the beginning of the year and it's often delayed because of the government shutdown stuff. So they may be starting two months into the fiscal year before the program, before the budget gets approved.

4. 23:09

   Then they take three months to ramp up to start. And then they work for four months. And then they take the last three months to shut the project down because they don't have authorization passed all months. Like, it is absurd. Could the airlines fund it to get around the... If they would let us. I mean, it's super politically controversial to privatize the FAA and air traffic control, but it's the kind of thing that private enterprise, I think, could get done in two to three years.

5. 23:38

   Well, you wouldn't need to privatize it. You could just have a user fee system where you're... It's a user fee system today. The real issue is there's several political groups that are opposed to it. The biggest being private jets, who today, airlines pay 100%. of the fees that the FAA is airline funded. We pay 100%. And essentially it's free, 99%. Essentially it's free, you know, to fly private jets.

6. 24:09

   They're a really powerful lobby. And I think that's probably the biggest impediment to, you know, modernizing the FAA. But the problem is anything, even anything that's done through the government, it's, you know, like you go and like the government's just not efficient at stuff. Like I'm not, it is the best FAA, best DOT we've ever had. But the conversations they have on Capitol Hill is, well, how many jobs are you going to put in my district?

7. 24:34

   And so think about air traffic control. Air traffic controllers don't need to be at airports. They mostly sit in basements, look at screens. They can be at a centralized facility anywhere in the country. Instead, there's an air traffic control facility in every single district for political reasons. And it makes it incredibly inefficient. And one wire gets cut. If you've got one big facility, you get a backup.

8. 24:58

   As we saw. But you have 450 of them. Things happen all the time. And it just makes the system inefficient. I'm not actually advocating for privatizing the FAA because it's so politically toxic. But we're doing more than we've ever done. But it's going to be hard for government to ever be leading edge on this. But what will happen? Because already certain areas capacity-wise are creaking at the seams.

9. 25:26

   and, you know, air capacity grows 5% a year, just we have an unstoppable force in the movable object. Yeah, it's, there's going to be limited, there's going to be fewer flights. So it's already happened in New York. The FAA has put on limits on a number of flights in New York. It happened this summer in Chicago. It's going to happen more and more places. Like, we hit the limit of what the FAA can manage and then that becomes the limit.

10. 25:48

    That's the limiter. There's more space in the sky, but you've got to have a different air traffic control system process. And they're trying to modernize it. Like, they are making good progress. I don't want to be, like, I'm not trying to be totally negative. I'm not being negative. They're making more progress than has ever been made in my career. But they're never going to get to the kind of, like, if the people at Stripe were allowed to run it, like, they'd really increase. More progress would happen. More progress would happen. If we were allowed to run it, more progress would happen. Because we're not constrained by politics. They're constrained by politics.