DOT Secretary Mary Peters

Address to the Aero Club

Tuesday, January 23, 2007

Thank you so much, Debby (McElroy), for that very kind introduction. And Paula (Hochstetler), congratulations on your election as the Aero Club’s new president.

I would also like to recognize some key members of the Department of Transportation’s leadership team who are here this afternoon: Deputy Secretary Maria Cino, Under Secretary for Policy Jeff Shane, Federal Aviation Administrator Marion Blakey, and Assistant Secretary for Aviation and International Affairs Andy Steinberg.

And thank you all for that absolutely wonderful welcome. Let me tell you what a thrill it is to address the Aero Club and lay out the Bush Administration’s aviation agenda for the next two years – an aggressive agenda that includes getting our framework right at home and expanding opportunities abroad.

I only wish that my mother could be here! You see, it was my mother who instilled a deep-seeded reverence for flying in me from earliest childhood. She was then, and until the day she died, a huge fan of aviation. For many years, she worked for the Director of the California Department of Aeronautics. And when I was growing up in Phoenix, we celebrated birthdays with a trip to her favorite place – Sky Harbor Airport. It was always a special treat. I remember we would get sparklers instead of candles on the cake. And best of all, we would watch the planes as they arrived in Phoenix, and as they whisked their passengers off to exciting destinations. 

Earlier this month, I was back at Sky Harbor, this time to open a new, state-of-the-art air traffic control tower. It is one of many facility, equipment and procedural improvements scheduled for airports around the country this year to make flying safer and more efficient.  Sky Harbor has come a long way from the sleepy little small-town airport I grew up with. Today, it handles more than a half million take-offs and landings each year. And that number is projected to almost double by 2025.

We are seeing similar growth across the country and around the world.  In 2005, nearly 750 million passengers flew on U.S. commercial flights. And we are racing toward 1 billion passengers by 2015 – less than a decade from now.

Meanwhile, companies like Cessna and Eclipse are preparing delivery of thousands of new very light jets, with the potential to usher in the largest increase in air traffic since the 1960s. 

President Bush summed up the challenge we face simply and succinctly during my swearing in as Secretary of Transportation: our nation is outgrowing its aviation capacity. And I have promised the President that we are going to tackle this challenge head-on by applying 21st Century solutions to safely meet the fast growing demands on our aviation network. Let me stress that safety tops my list of priorities for transportation, and aviation is no exception. 

Even with the commendable progress Administrator Blakey and her team have achieved, last year’s crash in Lexington and the recent runway incursion in Denver underscore why we must always keep pushing the envelope to make air travel safer. That is why we must, for example, take full advantage of the latest satellite-based technologies that enable aircraft to fly with much greater precision, improving safety in congested airspace.

And without compromising safety, we have got to continue pursuing new ways to squeeze every ounce of capacity possible out of our existing facilities and airspace by improving system performance.  We have had successes with the new reduced vertical separation rules and the Airspace Flow Program that proved so effective in reducing delays this summer and again during the holidays. And the new precision runway monitoring system that we are commissioning this year at Atlanta-Hartsfield is going to allow up to 23 additional aircraft an hour to land at the airport. 

Perhaps most important of all, as we tackle these and other challenges, we need to be forward-looking, rather than clinging to the policies and ways of the past. It is not just a matter of new technology, or even the transformational NextGen initiative announced at this forum three years ago. To give America an aviation system capable of keeping up with demand that is changing radically and growing exponentially – rather than one that is mired in gridlock – we must move the system away from its 1950s architecture. We must retool and rethink our policies, and our financing, to bring them into the 21st Century by embracing innovation and acknowledging the critical role the private-sector can have in building and operating aviation infrastructure.  

And, most of important of all, we must treat our aviation network for what it is – a tremendous national economic asset that, like all our transportation networks, must perform efficiently in order to support the broader economy. This isn’t pie-in-the-sky thinking. It is a response to the changes we see all around us.  It is the philosophy behind the Department’s Congestion Initiative, announced last May. And it is the thinking we need to inject into our aviation system.

And this is the year to do it.  I want to stress how critically important 2007 is for aviation. Expiration of the FAA authorization and Trust Fund financing provides a once-in-a-decade opportunity to rewrite the book when it comes to America’s aviation policies. And I believe that we will have failed both the industry and the American people if we do anything less. 

The importance of getting a financing bill that ties revenues to costs and allows us to manage the FAA more efficiently cannot be overstated. This is our one chance to get it right. Our goal is to have the Administration’s bill out shortly after the President’s budget submission. And I look forward to working with the Congress – and with all of you – to make this measure happen.

In fact, I have already opened up a dialogue with the new Chairmen and ranking members of the Transportation Committees and Aviation Subcommittees. They are equally anxious to move forward on a ground-breaking bill.

I have also spent a lot of time with leaders across the aviation spectrum, including many of you in this room.  I have traveled around the country to talk with the craftsmen who are filling the growing orders for new jet airliners and the visionaries who are designing tomorrow’s revolutionary new aircraft. I have joined the men and women who see that the increasing volumes of goods shipped by air arrive at their destinations on time and the new controllers we are training to guide the expanding volume of air traffic safely through crowded skies. I have sat down with airport and airline executives, with commercial pilots, and with representatives of the general aviation community. I have observed that, like my mother, just about everyone involved with aviation is passionate about what they do.

Now, I want to ask you to focus that passion beyond your individual special interests to the broader challenges facing aviation and the nation. I know that user fees and who pays are big concerns for many of you, but we must not lose sight of the broader issues at stake. 

What we need to focus on is how best to lay the groundwork for the system of tomorrow – the system of the next generation.

We are talking about a fundamental redesign of the entire air transportation system.  But it won't happen overnight, and it won't come for free. That is why the FAA needs a new funding mechanism, and why we must have incentives in place that will make the system more efficient as well as more responsive to user needs. Believe me, if we don't get this right, we will all pay as congestion overwhelms the system. There will be no “just in time” deliveries of parts and resources using air freight; home for the holidays will be a travel nightmare, at best; and forget about last-minute packages.  

If we continue along the current path, estimates are that, by 2022, congestion across our skies will cost this nation $22 billion each year in lost economic activity. That is not a future that any of us want. Nor is it inevitable.

Aviation today contributes $640 billion dollars a year to the American economy. That is 5.4 percent of U.S. GDP, and it accounts for over 9 million jobs. And by aligning our funding mechanisms and programs to be responsive and meet contemporary challenges, we can ensure that aviation will be an even more dynamic force in the economy of the future.

I know you all are looking forward to the specifics of our proposal, and I look forward to sharing them with you very soon.

In the meantime, like our agenda here at home, our international agenda focuses on putting the foundations in place to build a stronger industry that can continue to be a driver of growth both for our national economy, and for local communities. Aviation has benefited from President Bush’s successful effort to promote strong economic growth for our nation. Particularly key to helping U.S. aviation regain its footing – even while dealing with such uncontrollable factors as volatile oil prices – has been the Administration’s focus on expanding trade and opening markets to American goods and services.  Secretary Mineta left some big shoes to fill in a variety of areas, nowhere more so than when it comes to opening up international aviation markets.  Over the past six years, we’ve welcomed 25 new open skies partners, and significantly opened up China’s restrictive market. In fact, just this month we issued a preliminary decision for another new route under the landmark aviation agreement negotiated with China in 2004. Wall Street estimates place the direct value of this route at anywhere from $50 million to $300 million a year.  And overall, the total economic impact of the additional U.S. cargo and passenger carrier routes during the first seven years of the China agreement is expected to be $12 billion, according to internal DOT projections.

I am very excited about opening markets and what it can mean for businesses in this country and for our economy. A recent study found that, on average, air traffic grows anywhere from two to four times faster where air service agreements are liberalized. The result, in addition to bringing Americans more flight and travel options, is greater opportunity for economic development spurred by the aviation industry within the U.S., and abroad.

The agreements we are pursuing will assist U.S. carriers in expanding and solidifying their business position, as well as expanding markets for our aircraft and technology. And looking ahead, we have identified several major opportunities to open new markets for our airlines and other aviation businesses and their employees, as well as create better travel options for Americans.

The first is in our own backyard. Mexico and Canada are not only our closest neighbors, they are also our top trading partners. Transportation is key to keeping this robust flow of trade thriving. And today, I am announcing a North American transportation summit to explore ways to improve the movement of people and goods across our common borders.  I am inviting the ministers of transport from Canada and Mexico to join me in Tucson, Arizona, in March. This will be the first time North American transportation ministers will come together in a trilateral meeting. And it represents a tremendous opportunity to expand on our progress in opening markets for U.S. airlines and other transportation concerns that can keep these large and growing volumes of goods and travelers moving efficiently across our common borders. 

Looking further south, we are planning a major mission to Latin America to help our transportation firms participate in these growing markets. 

And building on our growing aviation relationship with China, I plan to participate in the China Strategic Economic Dialogue (SED) here in Washington this May. Aviation will be on the agenda. China represents a huge market for all kinds of transportation interests. So, in addition to the economic dialogue effort, I plan to travel to Shanghai and Beijing in April. A major focus of this mission will be opening doors for U.S. transportation companies to compete in that rapidly developing market. We will be building on the progress that industry – along with the FAA and the U.S. Trade and Development Agency – is making in the technical arena through the Aviation Cooperation Program. I know many of you here are participants in and supporters of  that process.

And we have not given up on Europe. It is too important to walk away from the table.  Indeed, I hold high hopes that we will find common ground and be able to sign an agreement with the EU before my tenure as Secretary ends.  

I am looking forward to the next two years. The challenges ahead are great, but the opportunities are greater. My goal is to put the foundation in place that will keep America flying high through aviation’s second century.  I will be driving hard to see that, this year, we do more than re-authorize aviation programs and instead revitalize them to fit the 21st Century. And I will be pushing for open skies and open opportunities for America’s aviation businesses, because opening markets is the gateway to a stronger industry, a stronger economy, and more aviation jobs on the ground and in the air. 

I look forward to working with you to accomplish these goals. Thank you for being here