Upheaval in the Aviation Sector: Challenges for the Biden Administration
The COVID-19 pandemic has had a particularly pronounced effect on the aviation sector. Passenger carriers have grounded their aircraft and slashed their schedules, cargo carriers scrambled to maintain healthcare and other critical supply chains while dealing with travel restrictions and the challenge of keeping their workers safe, and airports rushed to introduce new health and safety measures while dealing with plummeting passenger traffic and revenues. While the human, commercial and operational impacts of this crisis have been profound, the entire industry has grappled with a patchwork quilt of inconsistent regulatory requirements. While predictions are risky even in the best of times, here are a few (cautious) predictions about the likely aviation priorities of the Biden Administration and of Peter Buttigieg, a former mayor of South Bend, Indiana, who is expected to be nominated to become the next Secretary of the U.S. Department of Transportation (DOT).
Mask Mandates and Public Health Initiatives
During the early stages of the pandemic, a labor union and consumer group petitioned DOT to require that persons traveling in federally regulated transport facilities be required to wear masks and other face coverings.1 The Trump Administration's DOT denied those petitions on the grounds that "there should be no more regulations than necessary," leaving air carriers and airport operators to apply their own policies or requirements, or to apply requirements contained in state or local laws, to the extent applicable.2 Given the frequency and emphasis of President-Elect Joe Biden's recent statements about the importance of wearing masks, it is anticipated that the DOT/ Federal Aviation Administration (FAA) will quickly move to require passengers and others accessing federally regulated transportation facilities to wear masks. Industry observers also expect Secretary Buttigieg to promote other public health initiatives, such as seeking greater consistency of preventive health measures across many different modes of transportation.
Infrastructure Investment and Spending
Secretary-Designate Buttigieg has made several statements about the importance of travel and transportation to the national economy, and the need to make infrastructure spending a priority. President-Elect Biden has promised increased funding for the Airport Improvement Program, and has voiced strong support for implementing next-gen technology, which will modernize the national airspace and also improve aviation fuel usage and efficiency. Given the sharp drop in passenger revenues, expect airports to seek greater flexibility under the FAA's revenue-use requirements to use and deploy their airport assets for non-traditional aviation purposes to mitigate their revenue shortfalls.
Consumer Regulations and Enforcement
In contrast to the Obama Administration, which issued several new aviation consumer regulations, the Trump Administration has made it a priority to reverse and repeal these policies. For example, the Trump Administration last month issued a regulation that narrowed the definition of "unfair and deceptive" practices which are prohibited by air carriers,3 and raised new barriers to the imposition of new consumer protection rules. While it is not expected that DOT will reverse these measures per se, it is believed that the agency will place greater emphasis on airline consumer protection, with controversies concerning the obligation of air carriers to make refunds for canceled flights a likely focus.
Continued Focus on Supply Chains
The surge in online retailing and spike in demand for medical supplies and goods has led many passenger carriers to reconfigure their fleets to provide additional cargo capacity. The FAA has issued short-term exemptions that allow passenger carriers to transport cargo in airline seats when no passengers are onboard,4 and those approvals will likely be extended into the new year.
In addition to traditional transport modes, retailers and others continue to explore and consider the deployment of drones and other new technology to respond to changing market conditions. The Trump Administration last week issued new Final Rules pertaining to Remote Identification of Unmanned Aircraft Systems and to Operation of Small Unmanned Aircraft Systems Over People,5 and further regulatory advances are expected for this sector.
Other Issues to Watch
- Airport slot usage requirements. The FAA has extended its suspension of its airline slot usage requirements, which apply to certain highly congested airports, through the end of this winter season.6 While certain parties have petitioned for the extension of this relief, certain U.S. low-fare carriers have indicated that the FAA should not continue to extend these waivers (and preserve the status quo) if there are carriers seeking to accommodate recovering demand.7
- Revision of Cuba flight bans. Under the Obama Administration, DOT permitted not only humanitarian charter operations to Cuba, but also other types of charters, and limited scheduled passenger operations to this previously restricted destination. The Trump Administration banned all leisure passenger travel to Cuba, and last summer sharply limited charter operations as well.8 While any change in policy may be driven by broader diplomatic issues, carriers and travel groups might seek a return to a more relaxed policy.
Holland & Knight's Aviation Team has been at the forefront of all of these trends, and cooperates closely with the firm's legislative and government affairs teams to track and respond to quickly changing legal, market and regulatory conditions.
20 Posts in 20 Days Leading to Inauguration Day on Jan. 20
Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Joe Biden's inauguration, with insights as to likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.
1 See Petition of Transportation Trades Department, AFL-CIO, Docket DOT OST-2020-00015 (July 27, 2020), and Letter of DOT General Counsel Stephen Bradbury dated Oct. 2, 2020 (Denying Petition), and Emergency Petition of FlyersRights.org, Docket DOT-OST-2020-0135 (Aug. 4, 2020), and Letter of DOT General Counsel Stephen Bradbury dated Oct. 2, 2020 (Denying Petition).
2 Id. The FAA recently issued civil penalties against passengers who assaulted flight attendants who had been trying to enforce airline mask requirements. In a press release, the FAA noted that the penalty was being imposed not because of a regulatory violation, but because of the underlying assaults. See, Press Release, "FAA Proposes Civil Penalties Against Passengers for Allegedly Interfering with and Assaulting Flight Attendants," Dec. 18, 2020.
3 See U.S. Department of Transportation, "Defining Unfair and Deceptive Practices," 85 Fed. Reg. 78707 (Dec. 7, 2020).
4 FAA, Approval of Request for Exemption of Airlines for America, Docket FAA-2020-0429, May 21, 2020.
5 The FAA issued a press release which offers a concise summary of each rule, Dec. 28, 2020.
6 See COVID-19 Related Relief Concerning Operations at Chicago O'Hare International Airport, John F. Kennedy International Airport, Los Angeles International Airport, Newark Liberty International Airport, New York LaGuardia Airport, Ronald Reagan Washington National Airport, and San Francisco International Airport for the Winter 2020/2021 Scheduling Season, Federal Register, Oct. 7, 2020.
7 Airlines for America, a U.S. carrier trade association, has petitioned for the extension of this relief. See FAA Docket 2020-372 for a copy of the petition, and answers filed by other industry players.
8 See, e.g. Suspension of U.S.-Cuba Charter Authorizations, DOT Order 2020-8-4, Docket DOT OST 2020-00129 (Aug. 13, 2020).