Delta, long an opponent to privatizing the U.S. air traffic control (ATC) system, appears to have softened its opposition to the proposal.
“Yes, we are at the table. We are working constructively with [House transportation committee] chairman [Bill] Shuster,” Delta CEO Ed Bastian said of Congress’ leading privatization proponent during the carrier’s earnings call Thursday.
Bastian went on to say that Delta isn’t philosophically opposed to the push to move ATC management from under the purview of the FAA. But the carrier wants to make sure that the system is managed efficiently.
“We are in full support of the president’s agenda to invest and modernize the system,” Bastian said.
His comments were consistent with the lower profile Delta has kept on the ATC issue this year, even as privatization has gained the support of the White House, and as Shuster’s transportation committee voted late last month to approve privatization as part of this year’s FAA reauthorization bill.
But they represent a departure from Delta’s historical stance as a vocal opponent of privatization. In October 2015, Delta cited its opposition on the issue as a leading cause in its decision at that time to pull out of the industry trade group Airlines for America (A4A), which has worked closely with Shuster on crafting his privatization policy.
While proponents of privatization say that it would help fast-track the replacement of the nation’s current radar-driven ATC system with the GPS-based Next Gen system, Delta has disagreed. The bureaucratic process of transferring ATC management would actually slow the process, the carrier has historically argued.
Bastian’s seemingly softer comments on privatization came as Delta reported its first increase in unit revenue in 2-and-a-half years. The measure — defined as an airline’s per-seat income per mile flown — is followed closely by investment analysts.
Delta’s passenger unit revenue increase of 2.5% year-over-year in the second quarter is a strong indication that ticket prices are on the rise.
Nevertheless, Delta saw its net income drop 21%, to $1.22 billion as a 3% uptick in revenue failed to offset a 9% increase in expenses. A 9% jump in wages due to new labor agreements as well as an 18% rise in fuel costs drove the cost increase.
Delta’s second-quarter revenue of $10.79 billion fell short of analyst expectations by $30 million, according to the website Seeking Alpha.
The carrier’s earnings per share of $1.64 missed expectations by 1 cent.
Delta stock was trading at $54.13 just after 12 p.m. Eastern Time, down 2.43%.
By Robert Silk
Source: Travel Weekly