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Air Transport: Short-term Solutions, Long-term Problems
Kinghood International Logistics Inc | Updated: May 26, 2017

 The International Air Transport Association (IATA) recently reported the largest increase in air cargo tonnage since 2010. In March, worldwide demand for air cargo, as measured in freight-ton kilometers, rose 14 percent compared to the same month a year ago.
   “Optimism is returning to the industry as the business stabilizes after many years in the doldrums,” Alexandre de Juniac, IATA’s director general and CEO, said in a celebratory statement.
   But as with nearly every statement that has come from IATA in recent memory, there was a caveat.
   “There is, however, still much lost ground to recover while facing the dual headwinds of rising fuel and labor costs,” he continued. “It remains critical to use the improvement in the industry’s fortunes as an opportunity to enhance the value offering by implementing modern customer-centric initiatives that streamline processes and reduce costs.”
   The strong growth in airfreight volumes, fueled by a continued increase in exports and a rejuvenation of world trade, was accompanied by a relatively minor 4.2 percent year-over-year uptick in capacity.
   While North American airlines saw one smallest year-over-year increases in March, carriers still saw an overall increase of nearly 10 percent on a capacity rise of 2.8 percent. The increase was led by international trade, as freight-tons shipped on international routes grew 14.2 percent. IATA officials noted this was the largest increase in international freight since the West Coast ports labor episode in early 2015.

“The mere threat of a government shutdown causes agencies like the FAA to suspend and delay critical projects in preparation for a shutdown.”Said Paul Rinaldi, president, National Air Traffic Controllers Association

This continued increase in the activity of North American airlines will no doubt be a factor in discussions about reauthorizing the Federal Aviation Administration (FAA). The HouseTransportation and Infrastructure Committee has called a reauthorization bill a “must-do piece of legislation” for the current Congress.
   Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, has made the transformation of the FAA one of his biggest goals for this session.
   “The nation’s aviation system is the safest in the world, but it is woefully inefficient to meet the increasing demands of the 21st century,” said Shuster. “We need to rethink the operation and modernization of our air traffic control service in order to improve the system for the American people, passengers and pilots.”
   In a recent editorial for The Hill, Shuster wrote of air traffic control modernization as a chance to streamline and improve the nation’s airline efficiency, which by extension, would likely improve air cargo flow as well. He argued that inefficiencies in the current system are costing taxpayers $30 billion each year, and that the nation’s top airports are approaching unsustainable traffic levels.
   “Transformational reform of the FAA’s structure and programs is the Transportation and Infrastructure Committee’s highest priority and one of the most important reform efforts Congress can pass this session,” he wrote.
   Shuster’s solution involves removing air traffic control duties from the FAA. He says this will improve the quality of air traffic control offerings while letting the FAA get out from under its NextGen program, which has been characterized by budget increases and progress delays.
   “By bringing our aviation system into the 21st century, we can keep America the world leader in an industry we pioneered, and make sure that all Americans who fly benefit from safe, efficient and world-class aviation technology,” he wrote.
   Transportation and Infrastructure Committee hearings addressing this very topic have been scheduled for the coming months.
   In the meantime, the FAA’s operations budget has increased thanks to an omnibus spending bill passed by Congress in early May. The agency received $16.4 billion as part of a $1.1 trillion spending package.
   The bill will keep the government funded though Sept. 30, but industry groups seemed distressed by its short-term nature. The National Air Traffic Controllers Association (NATCA), which cites improving air traffic controller staff ing and continuing to push forward on the NextGen program as major FAA needs, recently called for a long-term funding plan.
   “This bill only provides a short-term fix to a long-term problem—the unstable, unpredictable, stop-and-go nature of the current funding stream. The mere threat of a government shutdown causes agencies like the FAA to suspend and delay critical projects in preparation for a shutdown,” NATCA President Paul Rinaldi said in a statement. “It takes significant time and effort to bring a large agency to a halt, so that must begin before a shutdown even occurs, and it takes even more time to restart it again once a shutdown threat subsides.”
   Language in the spending bill seems to support the current air traffic control setup, so any changes would likely be facing an uphill battle.
   In an interview with Bloomberg, Senate Commerce, Science, and Transportation Committee Chairman John Thune, R-S.D., said he’s perfectly happy to let Shuster and the House lead the way on any potential changes to the FAA. Thune did allow, however, that he’d like to get an FAA authorization bill to the floor by July.
   Whether that will be another short-term arrangement or a significant piece of legislation that would create stability at the FAA is anyone’s guess.

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