Photo credit: www.cnbc.com
Ed Bastian, the CEO of Delta Air Lines Inc., recently shared his perspective on the regulatory environment under the incoming Trump administration, expressing optimism about potential changes. In remarks made during a media briefing preceding Delta’s investor day, Bastian highlighted President-elect Donald Trump’s campaign promise to reassess regulation and bureaucracy within the aviation sector.
The U.S. Department of Transportation, now led by Secretary Pete Buttigieg, has enacted several rules aimed at consumer protection, which some in the airline industry have found excessive. One such regulation, established earlier this year, mandates that airlines provide automatic cash refunds to passengers in the event of flight cancellations.
Bastian noted his concerns regarding what he perceives as regulatory overreach experienced during the past four years. Among other issues, the DOT is investigating the airline industry’s lucrative loyalty programs, which generate significant revenue for airlines and have become a crucial financial resource, particularly post-pandemic. The department is gathering information on how airlines can modify the value of frequent flyer points on their own terms. Additionally, the DOT is conducting an investigation into Delta’s response to the CrowdStrike outage in July, which resulted in the cancellation of thousands of flights.
Despite these challenges, Delta anticipates growth in both sales and profits in the upcoming months and years, bolstered by strong consumer demand and an increase in household wealth since the pandemic.
As part of Trump’s administration, former U.S. congressman and Fox Business host Sean Duffy has been nominated to lead the DOT, though he has yet to respond to inquiries about his future plans for the agency.
Other airline executives have voiced their support for Trump’s administration, urging officials to prioritize resources for enhancing air traffic control and other essential infrastructure overseen by the Federal Aviation Administration. American Airlines CEO Robert Isom emphasized the need for investments in the airline industry, while Sun Country Airlines CEO Jude Bricker called for stability and adequate resources at the DOT.
Industry experts anticipate that the new administration may adopt a more favorable stance towards mergers and consolidation within the airline sector. Notably, the recent acquisition of Hawaiian Airlines by Alaska Airlines proceeded without resistance from the current administration, in contrast to recent failed moves by JetBlue Airways to acquire Spirit Airlines and a partnership with American Airlines, both of which faced legal challenges from Biden’s Justice Department.
Bricker noted, “Perhaps this administration would have a different stance. It certainly can’t get more against it,” reflecting hopes for a more receptive approach to consolidation and industry growth.
The Department of Transportation has not commented on these developments as of yet.
Don’t miss these insights from CNBC PRO
Source
www.cnbc.com