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Remarks by United Airlines Chairman, James E. Goodwin to the  Aero Club, October 17, 2000

Good afternoon, and thanks for having me here today. Let me also add my words of congratulations to Najeeb Halaby and thank him for his years of service to our industry and our country. And thank you for your warm introduction.

Right now, though, I fit into that clichéd category of someone who needs no introduction, and for all the wrong reasons. And I've taken little solace in the fact that I'm not the only CEO who has had a lot of explaining to do recently.

This past summer was not the happiest of times at United. Even I had to do a double take earlier this month when the Department of Transportation issued the on-time performance data for August, which was clearly one of our worst months ever. The good news is that September's numbers for United will be much, much better. For those of you who were in any way inconvenienced by our operational problems, please accept my sincere apologies. You have my personal pledge that we're doing everything in our power to ensure that nothing like this will happen again.

Rest assured that we are single-mindedly dedicated to rebuilding our customers' trust in us, and in the last two months we've made progress on every front. Negotiations with the leadership of our pilots' union have been completed successfully, and we're anticipating approval by the full membership. We are meeting with our flight attendants, well ahead of schedule, to address their concerns and discuss compensation issues. We're well on our way to an agreement with our machinists. And our operations are back to normal.

But even when we're not busy shooting ourselves in the foot, all of us in this wonderful industry are hampered by an aviation infrastructure that is not up to the challenges of the new century. We are increasingly burdened with an outmoded air traffic system and insufficient airport capacity.

Poor management of our airspace, myopic policies that limit airport growth and a lack of an integrated approach to resolving these challenges are exacting a heavy toll on passengers and businesses, and are creating a burgeoning crisis that is only now beginning to receive the attention it deserves. In fact, we're really talking about two crises - one in the air, and one on the ground that I refer to as the "concrete crisis." They are inextricably linked.

You know well that the airline industry has been growing by leaps and bounds during the past twenty years. Once the privilege of an elite few, a rare and expensive treat, air travel is now available to virtually everyone. That is the good news. The bad news is that we are choking on our own success.

Our aviation infrastructure, designed half a century ago, has not kept up with the explosive consumer demand spawned by deregulation. Although the airlines are flying three times as many people as in 1978, the system -- from air-traffic control to the number and capacity of commercial airports and runways -- has remained virtually unchanged.

Major airports are finding it difficult, if not impossible, to grow. Construction of needed runways and gates takes time and is often a contentious, politically charged process. The fact that, during the past five years, only three new runways have been put into service at the country's twenty-eight biggest airports, highlights the dilemma we face.

The pressure on this outmoded system will only continue to increase. 

The Federal Aviation Administration is calculating that in ten short years, the number of airline passengers will rise by nearly sixty percent - bringing the annual, total number of travelers to one billion. That's three hundred and thirty million more people who need to be accommodated by a system already stretched to capacity. Where are we going to put all of those people? How many more departures will we have to add to our schedules to take them where they want to go? 

Meanwhile, the stress on the existing infrastructure, at current levels of demand, is starting to show. ATC delays and cancellations are growing exponentially and dragging down the entire air transportation system's performance and reliability. How bad is it? I don't need to quote numbers to this group, but let me give you a few examples from United's experience.

Prior to our labor issues this summer, United was making real progress in reducing the number of cancellations and delays that were within our control. From 1995 to 1999, we reduced total delay minutes for every type of delay, except air traffic and weather, by twenty-four percent. Over the same period, air traffic control and weather delays for United flights increased sixty-two percent. So all of our gains in fixing what we can fix in our own operations have been more than wiped out by circumstances out of our direct control.

Here's another example. Many of you may regularly commute between Reagan National Airport in Washington, D.C. and O'Hare on United. Five years ago, that flight took, on average, one hundred and sixteen minutes. Now, the average flight time is one hundred and twenty four minutes. Last time I checked, Chicago wasn't migrating west. This gradual and steady creep in flight time is the result of congestion in the air.

A minute here or there might not sound like much, but most of you understand only too well the cumulative impact when additional minutes are multiplied over thousands of flights to hundreds of destinations. These trends are not going to reverse themselves. All of our best estimates show ATC delays increasing in the next five years unless we can effect fundamental, structural changes in the way our industry operates.

Some people feel that change should come solely from the airlines. They argue that we should ignore the needs of our customers, cut back on schedules and reduce the number of available travel options. That's no different than insisting that General Motors or Ford cut back on car production because of traffic congestion on aging highways.

Truncated flight schedules may work on paper but they just don't make sense for the business and leisure travelers who are demanding a responsive and flexible air transportation system. We can't provide the answer by sacrificing passenger needs and wants.

Neither will relief come in the form of a technological silver bullet. Certainly, technology improvements can contribute to the more efficient movement of aircraft, but they can't solve the problem of too few runways at overburdened airports in communities that are resistant to further growth in air traffic. 

So what do we need to do, and how do we respond to the challenge of transporting a billion passengers by the year two thousand and ten? In the near term, our options are limited to two courses of action that are not very appealing. The first option would be to deploy larger aircraft on certain city pairs while simultaneously reducing the frequency of service.

This approach has two drawbacks. It inconveniences customers, who understandably want to fly when they want to fly, and it creates a real estate problem at many of our airports. Right now, there's not enough space available to accommodate existing fleet configurations, let alone future fleets that will be weighted toward larger jets.

The second near-term option is even less palatable. Under this scenario, the major airlines -- with relief from anti-trust regulations -- could work with Congress to limit the amount of traffic at certain airports. An unfortunate consequence of such legislation could be loss of service for smaller communities. But the skies would certainly be less crowded.

We've got some tough choices to make, and this reality has forced our industry to become increasingly open and candid about the magnitude of these infrastructure crises. Few people want to talk about infrastructure - it's not all that glamorous a topic. Glamorous or not, we have to keep the dialogue alive. We must insist that all levels of government, as well as civic and business organizations, pay attention to this issue. 

But talk, as they say, is cheap. That's why I was so proud that our industry put our words into action earlier this year and got behind Representative Bud Shuster, the House Transportation and Infrastructure Chairman, to get the Air 21 Act passed. To those of you who added your voices to the chorus - many, many thanks.

Air 21 is the first tangible evidence of our ability to work with the federal government to achieve meaningful solutions in the area of infrastructure. This act finally unlocks the money that's been paid into the Aviation Trust Fund and dramatically increases spending on our nation's air transport system. Almost forty billion dollars will be invested in the next three years in aviation facilities, equipment and training.

Air 21 has already made a local impact by creating twenty-four new slots here at Washington Reagan National, enhancing service to the region. And that's all well and good, but it still doesn't address many of the larger capacity issues facing National and scores of other airports and markets nationwide. So while Air 21 is an important first step, it is just that, a first step. We need to continue driving for longer-term, more permanent solutions.

For that reason, United is putting all of its muscle behind the Air Transport Association's call for rapid modernization of the entire air traffic system. The ATA's strategic plan of action, called "A Framework for Change," defines clearly how the Federal Aviation Administration can make the air transportation network more responsive to consumer needs now, and in the future. This plan offers short- and long-term recommendations for improvements that will allow the system to operate more efficiently, without in any way compromising safety.

One of the ATA's recommendations - which will be operational in about two years - is the FAA's deployment of improved satellite navigational systems. Another critical element of the plan calls for the creation of mechanisms to track and report on key performance metrics like ATC-created delays at departure, taxi-out and enroute.

In our push for modernization and expansion of infrastructure, our industry will not walk away from our obligations in the areas of noise and emissions. Indeed, the first versions of Stage Four design aircraft, powered by the next generation of quieter, more efficient and more powerful engines, will be flying by the middle of the decade. We're confident that communities bordering our nation's largest airports will welcome these quieter, cleaner airplanes just as they have the current and previous generations of more efficient jets.

Our approach to solving the problems posed by an aging system in a time of precedent-setting growth must be integrated and comprehensive. We can't reconfigure airspace for one community and leave countless others waiting for relief. Insufficient runway capacity at one airport can affect hundreds of connections and millions of people. Tinkering with a few problems or locations here and there just won't cut it. 

That means looking at the whole travel picture - from runways to passenger lounges. We have to ask ourselves if we have the airport parking and terminal amenities for three hundred and thirty million more people. Are the roads to the airports able to accommodate the demand? When we build bigger planes to carry more passengers, is there enough room on the tarmac for their larger size? And how will we manage the challenge of aligning the often-conflicting needs of local communities with the requirements of a global air transport infrastructure?

From a strictly parochial perspective, when I deal with the suburban public officials who make or break our ability to grow at O'Hare, it feels like I'm being nibbled to death by ducks. But even ducks need to fly, at least occasionally.

We can't build new runways fast enough today because the same citizens who expect state of-the-art airports at their destinations won't allow them to be built in their home towns. I think it's time for the Department of Transportation to bring together the best minds from all levels of government and have them grapple with this contradiction. We need to protect the rights of local communities to control their own destinies, but at the same time we can no longer tolerate their stranglehold over essential aviation improvements. I promise our friends at the DOT that United will support such a forum with all the resources we have at our disposal.

Failure to address the twin infrastructure crises -- the one in the air and the one on the ground, the "concrete crisis" -- will mean that we will never be able to offer the level of service that our customers deserve. Eventually, our inability to prepare for the future will mean the undoing of all the gains we have made in creating an air transportation system that is accessible to so many Americans. There will be too few flights to meet the needs of one billion passengers and the law of supply and demand will kick in. Prices will rise and air travel will once again become a rare privilege. This is a sobering and unsatisfactory prospect.

But I'm an incurable optimist. I think our industry is up to the challenge. I think the federal government is finally listening. And I think the growing realization that our nation's continuing economic expansion is dependent upon a reliable, robust and networked transportation infrastructure is creating new opportunities for our industry.

Simply put, we need an aviation system that provides safe and reliable access to all corners of this interconnected and interdependent globe.

As an industry we need to continue to speak up and lend our expertise to ensure that we continue the progress symbolized by Air 21.

Thanks, once again, for being effective and committed advocates for an industry that's done so much for the world. I know that all of you - in the spirit of Najeeb Halaby - will continue to make your voices heard.