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Well-known member
Dec 9, 2005
Republicans win you lose...

This was published the day after the election.

United Continental Holdings Inc. and Delta Air Lines Inc. are among U.S. carriers that will gain as Republicans use their new majority in the House to scrap proposals to limit the outsourcing of maintenance work and to subject global alliances to antitrust enforcement.

“Those types of issues will go away,” said David Schaffer, a consultant in Vienna, Virginia, and a former House aviation subcommittee Republican counsel, in an interview. Under Democratic control, lawmakers had approved provisions restricting the airlines’ overseas activities.

Republicans gained at least 60 seats in the House of Representatives, their biggest increase since 1938 and their first majority since 2006.

The resulting shift in lawmakers setting House transportation policy also may benefit FedEx Corp. in its effort to fight off unions, Macquarie Group Ltd. through its investments in toll roads and Toyota Motor Corp., whose executives faced grilling over auto recalls from a Democratic- run committee. The airlines seek a “do no harm” approach from the new Congress, according to the Air Transport Association, the industry’s biggest trade group.

“The current Congress has been anti-airline,” said William Swelbar, a research engineer specializing in air transport at the Massachusetts Institute of Technology in Cambridge. “There will be a new set of ears to listen to the industry.”

Republicans also gained at least six seats in the Senate, though Democrats retained control of that body.

House-approved legislation to finance the Federal Aviation Administration, still pending, would require drug testing and additional inspections at overseas maintenance centers used by U.S. carriers, potentially raising costs and making them less attractive to the airlines, Swelbar said.

27% of Work

Carriers use the centers in part to reduce expenses, Transportation Department Inspector General Calvin Scovel said in congressional testimony last year, without saying how much the companies save. Foreign centers performed 27 percent of heavy maintenance work by contractors for nine airlines in 2007, up from 21 percent in 2003, Scovel said.

U.S. airlines spent about $14.9 billion on maintenance in 2009, and passenger carriers used contractors at home and abroad for about 43 percent of the work, according to the U.S. Bureau of Transportation Statistics. Maintenance materials and outside repairs averaged 5.1 percent of operating expenses for United Airlines and 4.4 percent for Delta in 2008 and 2009, according to Bloomberg data.

Great news for business professionals, too bad pilots are organized labor. I use the word "organized" very loosely.

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