State Dining Room

9:47 A.M. EST

THE PRESIDENT:  Thank you for being here.  Nothing like having meetings in the White House.  Good place.  Good place for meetings.  Good place for a lot of things.  People don’t realize I inherited a mess.  A big mess.  I think they know.  I think they understand.

Well, thank you all.  I know so many of you through reading and through business magazines, and you’ve done an amazing job.  And I want to congratulate you.  I know you’re under pressure from a lot of foreign elements and foreign carriers.  I’ve been hearing that a little bit.  At the same time, we want to make life good for them also.  They come with big investments — in many cases, those investments are made by their governments.  But they are still big investments.

I’m thrilled to welcome the leaders of the airline industry to the White House.  Your industry supports over 10 million well-paying U.S. jobs and creates almost $1 trillion in economic activity, which is really big stuff, really amazing.

Last year, our airlines moved approximately 2 million people each day in our country, which is an incredible number of people.  And they move them well — despite the bad equipment that the airports give you in many cases, because they can’t get approvals, and we had regulatory morass that’s a disaster.

And I can tell you that a lot of the new equipment that already is obsolete the day they order it — and that’s according to people that know, including my pilot.  I have a pilot who’s a real expert, and he said, sir, the equipment they’re putting on is just the wrong stuff.  And we’ll talk about that.  Because if we’re going to modernize our systems, we should be using the right equipment.  And I know Mr. Tilden is nodding.  You know what I mean.  It’s one thing to order equipment, but let’s order the right equipment.  Probably the wrong equipment costs more.  You can probably buy the right equipment for less money.  So we want to talk about that.  Because my pilot, he’s a smart guy, and knows what’s going on.  He said the government is using the wrong equipment and instituting a massive, multibillion-dollar project, but they’re using the wrong type of equipment.  So let’s find out about that.

We want the traveling public to have the greatest customer service, with an absolute minimum of delays and with great convenience all at the lowest possible cost.  We want to help you realize these goals, and we will indeed help you realize these goals.  Airports are very important when you travel.  Very important.

As an example, some of you were saying yesterday to me that you go to China, you go to Japan, they have fast trains all over the place.  We don’t have one.  I don’t want to compete with your business — (laughter) — but we don’t have one fast train.  And it’s the same thing with our airports.  Our airports used to be the best.  Now they’re at the bottom of the rung.  We’ve spent $6 trillion — think of it — as of about two months ago, $6 trillion in the Middle East.  We’ve got nothing.  We’ve got nothing.  We never even kept just even a little tiny oil well.  Not one little one.  I said, keep the oil.  But we’ve spent right now $6 trillion in the Middle East.  We have nothing.  And we have an obsolete plane system, we have obsolete airports, we have obsolete trains.  We have bad roads.  We’re going to change all of that, folks.  You’re going to be so happy with Trump.  I think you already are.

So we want to help you realize these goals by rolling back burdensome regulations.  And you people are regulated probably as much as almost anybody, although I can think of a couple of industries that are even worse.  Lowering the overall tax burden on American businesses big league.  That’s coming along very well.  Way ahead of schedule, I believe.  And we’re going to be announcing something, I would say, over the next two or three weeks that will be phenomenal in terms of tax, and developing our aviation infrastructure.

Again, I want to thank you all for being here.  So I want this to be a meeting of substance.  I want to be able to do things for you.  The auto industry was in.  They left, they said it was the best meeting they’ve ever had.  I even took them into the Oval Office.  The head of Ford, the head of General Motors, the head of Fiat, others — they never saw the Oval Office.  I said, you mean they never took you in?  You see how far away it was from the room?  Ten feet.  It was 10 feet across the hallway, but they never got taken in.  I took them in.

The auto companies are going to be making massive investments in Michigan and Ohio, in Pennsylvania, a lot of the places where jobs have left.  So we’re really happy about that.  They’ve been great.  Ford is going to build — you know they cancelled a big plant in a certain place, I won’t say where — a $2 billion plant, and they’re building it in the United States and they’re expanding greatly.  General Motors the same thing.  They’ve been great.  They’ve been great.  I think they’ll continue to be great.

But we’re also going to be great to them.  We’re going to get rid of a lot of unnecessary regulation, and we’re going to make their life a lot easier.  They’re going to employ a lot more people.  So a lot of businesses are rushing in.  They’re coming in big league.

So with that, I thought what I would do is perhaps we’ll start with Mr. Gray.  We’ll go around the room and just quickly just say who you are and who you represent.  The biggest of the airlines are here.

STAFFER:  Thank you, press.

THE PRESIDENT:  And you can — no, stay, stay, stay.  Let them see who’s here.  (Laughter.)  Everyone is so quick to get rid of the press.  I think I am the most open President ever.  (Laughter.)  They want to get rid of the press.  What, you don’t want to see who Mr. Gray is?  (Laughter.)  Maybe I should have started with somebody else.  (Laughter.)  Okay, you can stay.  Yeah, stay.  Stay for a while.  See who’s here, right?  Okay, good.

MR. GRAY:  Well, thank you, Mr. President.  I’m Myron Gray, and I represent the United Parcel Service.

MS. EVENS:  I’m Ginger Evens, I’m the Commissioner of Aviation for the city of Chicago.

MR. FLYNN:  Mr. President, Bill Flynn with Atlas Air.

MR. WIGINGTON:  Rob Wigington, CEO for Nashville Airport Authority.

MR. CALIO:  Nick Calio, Airlines for America.  Thank you for having us.

MR. BASTIAN:  Mr. President, Ed Bastian, CEO of Delta Airlines.

THE PRESIDENT:  Great.  Welcome.  Delta is doing well.

MR. BASTIAN:  Doing great, and you know we’ve been neighbors for a long time.

THE PRESIDENT:  That’s right.  That’s right, good.

MR. BASTIAN:  Hopefully we’ve been good to you.

THE PRESIDENT:  You’ve been very good.  Thank you.

MR. HAYES:  Mr. President, Robin Hayes, CEO of JetBlue Airways.  (Inaudible.)

THE PRESIDENT:  Good job.

MR. BRONCZEK:  Mr. President, Dave Bronczek, FedEx.

THE PRESIDENT:  By the way, Fred Smith was here yesterday.

MR. BRONCZEK:  Yes, I know.

THE PRESIDENT:  He’s a great, great guy.

MR. KELLY:  Gary Kelly, Southwest Airlines.

THE PRESIDENT:  Great job.

MR. TILDEN:  Brad Tilden, Alaska Air Group.  And we’re actually in the process of merging with Virgin America right now.

THE PRESIDENT:  Okay, good.

MR. FOYE:  Mr. President, Pat Foye, Executive Director of the Port Authority of New York and New Jersey.

THE PRESIDENT:  Great.  We spoke a long time ago.

MR. FOYE:  Yes, sir.

THE PRESIDENT:  And you did a good job.

MR. FOYE:  Thank you.

THE PRESIDENT:  Appreciate it.

MR. POTTER:  Mr. President, Jack Potter, Metropolitan Washington Airports Authority.

MR. BURKE:  Mr. President, Kevin Burke.  I’m the President of Airports Council International-North America, which is every airports in the United States and Canada.  Thank you for having us.

THE PRESIDENT:  Thank you.

MR. VANECEK:  Mr. President, Bill Vanecek.  I’m the Director of Aviation for the Buffalo Niagara International Airport and Niagara Falls International Airport.  I’m also the chairman of Airports Council International-NA.

THE PRESIDENT:  Great.

MR. LOPANO:  Mr. President, good morning.  My name is Joe Lopano.  I’m from Tampa International Airport.

MR. MUÑOZ:  Oscar Muñoz with United Airlines.  And Mr. Doug Parker from American couldn’t be here today.

THE PRESIDENT:  Okay.  Thank you.

MS. FLINT:  Good morning, Mr. President.  Deborah Flint, the CEO of Los Angeles World Airports.  LAX is the world’s seventh largest airport and the country’s third largest airport.

THE PRESIDENT:  We’ll make it number one worldwide.  Let’s make it number one.  (Laughter.)  I didn’t like the number.  What is number one now in terms of service?

MS. FLINT:  Atlanta.

THE PRESIDENT:  That’s good.  We love the state of Georgia.  I love Georgia — I tell you that’s for sure.  So that’s good.

PARTICIPANT:  Number one in the world.

THE PRESIDENT:  So let me ask you — so what can we do to make your airlines better, to make your balance sheet better, to have you get more jobs and create more jobs, to have you win competition worldwide so you can start doing more business worldwide?  Because I know you have a lot of competition, and a lot of that competition is subsidized by governments, big league.  I’ve heard that complaint from different people in this room.  Probably about one hour after I got elected I was inundated with calls from your industry, and many other industries, because it’s a pretty unfair situation.

What can we do?  Give me suggestions that we can make your life easier and that you can employ a lot more people.

MR. KELLY:  Well, Mr. President, I’ll lead this off.

THE PRESIDENT:  Southwest Airlines.

MR. KELLY:  Thank you very much for the opportunity to be here.  We have never had a meeting like this, certainly in my years at Southwest Airlines.  So we’re very grateful for this opportunity.

THE PRESIDENT:  I want to congratulate you because you have done an amazing job, really amazing job.  You really have.  So congratulations.  Go ahead.

MR. KELLY:  I think we’re very well aligned with your philosophy.  We would welcome tax reform.  We would welcome regulatory reform.  And very well aligned on the need for infrastructure investment.

The single biggest opportunity for aviation is to modernize the air traffic control system.  We work very well with our partners in the airports around the table.  I know them all and we serve all of these airports and —

THE PRESIDENT:  You shouldn’t know them too well.  (Laughter.)

MR. KELLY:  Well, they’re our landlords.  (Laughter.)  (Inaudible) the only landlord available.  But we have billions of dollars’ worth of airport projects underway around the country to continue to modernize the airports.  We’ve spent billions of dollars on the air traffic control modernization but it’s not making any meaningful progress.

THE PRESIDENT:  I hear that.  I hear we have the wrong system.  I’m hearing that the United States government — and is the gentleman who’s the head of the FAA right now not a pilot?  Or is that — does he —

MR. KELLY:  I don’t know if he’s a pilot or not.

THE PRESIDENT:  I’d like to find out because I think it maybe would be good to have a pilot, like a really good pilot who knows what’s going on.  I’ve heard that, and, I don’t know, it seems a little hard to believe because the complexity of your business is right up there, right?

MR. KELLY:  Oh, very much so.

THE PRESIDENT:  And I would think you need a very sophisticated person in that job, and somebody that, frankly — being a pilot would be helpful, because I’m hearing you put the wrong — I hear the government contracted this system that’s the wrong system, and I hear that from pilots.  So who would be better to tell me?  But I hear we’re spending billions and billions of dollars.  It’s a system that’s totally out of whack.  It’s way over budget, it’s way beyond schedule, and when it’s completed, it’s not going to be a good system.  Other than that, it’s okay.  (Laughter.)

So what do you think about that, Gary?

MR. KELLY:  Well, I agree with you.  When you have a project that takes that long, it becomes outdated.

THE PRESIDENT:  It’s already outdated.

MR. KELLY:  It’s already outdated, no question.  And we spent billions of dollars on this.

THE PRESIDENT:  Has that been you or the government or both?

PARTICIPANT:  Oh no, this is the federal — FAA, air traffic control —

THE PRESIDENT:  So when you say “we” — “we” the government —

MR. KELLY:  You’re paying for it.  You’re ultimately — the airlines and our customers are paying for it.

THE PRESIDENT:  Why do the airlines allow that to happen where they put in a bad system?  Not even antiquated — and it’s antiquated because it’s taken so long.  Why do the airlines allow a system that you know is bad from the beginning — because you guys are pros — why do they allow the government to put in the wrong system?

MR. KELLY:  Well, we’re not in control.  And I think that’s one of the things that we see as the path to having success, is we need to address the fundamental organization of the air traffic organization, not the safety and regulatory oversight — that’s a government function that needs to remain.  But we believe that reforming the FAA by creating a non-for-profit corporation is the way to address the governments that you’re speaking to, as well as the long-term financing.

THE PRESIDENT:  Headed by the airlines?  Headed by who?  The board would be who?

MR. KELLY:  The board would be represented by all the various constituents.  So the government would have a seat, general aviation would have a seat, certainly the commercial airlines would have a seat.  Everyone would —

THE PRESIDENT:  Well, this wouldn’t have happened then.  You wouldn’t be putting in a system — a control system — that is obsolete before they even signed the contract.  And, by the way, overly expensive.  More expensive than (inaudible).

MR. KELLY:  You know, the interesting thing is I think that there is absolutely unanimous agreement that the system needs to be modernized and that it is well behind schedule.  There is not agreement on the path forward to address that, and that’s where we run into roadblocks.  We want the government out of managing the air traffic control system so that it can be adequately managed, adequately financed, and we can get this done.  We won World War II in three-and-a-half years; we ought to be able to modernize air traffic control.

THE PRESIDENT:  So how long would it take to — because I’m hearing you have to scrap all of the billions of dollars that have been put in — stupidly put in.  How long would it take to come up with a great air traffic control system, the top anywhere in the world, the top of the line?  How long would that take to do and how much would it cost?

MR. KELLY:  The good news is, we don’t have to scrap everything.  We are still using fundamentally World War II-era ground-based radar to guide the aircraft from a navigation standpoint.  We are not utilizing GPS satellite-delivered navigational tools.  Those things exist.  At least for Southwest Airlines, we have fully equipped all of our fleet to take advantage of that, but we’re not getting those kinds of flight profiles written for each airport or each route.

THE PRESIDENT:  So you’d save a lot of time, you’d save a tremendous amount of fuel.

MR. KELLY:  We think that we’re losing $25 billion a year as an industry.  And I think the best example we can offer up to you — the system is very safe, by the way.  And our air traffic controllers are very fine men and women, and they do a fantastic job.

THE PRESIDENT:  It’s safe but it’s very cautious.  And it should be cautious.

MR. KELLY:  Yes, it must be cautious.

THE PRESIDENT:  But I notice the intervals when planes go out seem very, very long.

MR. KELLY:  It used to be a 55-minute trip between Washington and New York, and today it’s 80.

PARTICIPANT:  Mr. President, it’s not just about fuel — it’s about jobs.  The partnership in New York City did a study that the cost of air traffic control congestion in New York and New Jersey alone is $75 billion over a period ending in 2028.  Those are jobs that haven’t been created and jobs that —

THE PRESIDENT:  And what is the reason for that?

PARTICIPANT:  It’s the antiquated system, one, Mr. President.  It’s, two, the fact that New York/New Jersey is the busiest airspace in the world.  And, three, frankly, that other countries, including Canada, have more efficient systems.  Implementation and the funding NextGen is really critical.  And this is not an act of (inaudible) — this is about jobs.

PARTICIPANT:  Sir, you asked why — your question — how did we let this happen to some degree.

THE PRESIDENT:  Yeah.

PARTICIPANT:  I’ve (inaudible) on telecom and railroads and some (inaudible) industry, and it’s unfortunate that every time you go from one industry to the other, the regulatory burden continues or gets worse.  So in this particular case, to be very frank and blunt, and to your point earlier, I think it’s become political — it’s a political process, and so it’s difficult for us to have control.

THE PRESIDENT:  Not anymore it’s not political.  We’re going to get —

PARTICIPANT:  And you have the appointees that you —

THE PRESIDENT:  — at a reasonable price.  So not anymore.  Go ahead.

PARTICIPANT:  I would take special care in reappointing the (inaudible) on the FAA.  Whether or not it needs to be a pilot or not, I can’t opine, but it would be nice to have people that actually have a thorough understanding of the business of aviation.

THE PRESIDENT:  Is the head of the FAA a pilot?  Does anybody know?  Somebody should know.

PARTICIPANT:  He’s not.

THE PRESIDENT:  He’s not?  He’s not a pilot.  I just think a non-pilot would not know the sophistication of this system, right?  I mean, better to have a pilot — because my pilot said it’s a terrible system that they’re installing; that the work they’re doing now is a waste of tremendous amounts of money because the system is a bad system.  That’s coming from a pilot.

PARTICIPANT:  Mr. President, when you talk about jobs, and you just recently asked about that, what we talked about just recently with the airlines is infrastructure in the sky, which is really antiquated.  But you refer to infrastructure on the ground, the airports.

THE PRESIDENT:  Both.

PARTICIPANT:  Yeah, and the airports really are becoming antiquated, to your point.  There is a system, there is a charge called a passenger-facility charge, which is a charge that’s levied on every ticket.  And it hasn’t been increased in 16 years, so it’s basically defunded.

THE PRESIDENT:  How much is it?

PARTICIPANT:  It’s $4.50.  That could be increased by a simple act of Congress, and it’s not a U.S. tax.  It’s a user fee.  So as a customer uses my airport in Tampa, the airlines collect that fee and they send it back to us in Tampa.  It never comes to Washington and gets approved in the budget.

THE PRESIDENT:  The problem is, I don’t like raising fees or taxes — I’ll be honest.  I mean, we’re spending all this money overseas, we’re giving away trillions of dollars to all these countries.  All of the countries that trade with us are ripping us off.  The last thing we have to do is raise the fee.  I understand what you’re saying, but $4.50 — it’s a lot when you look at all of the passengers.

If there were other ways of doing this — because you’re only hurting yourself by — really, eventually, people are going to just stop flying because it’s very expensive with all the taxes.  I mean, there are other ways.  We’re spending so much money overseas, fighting wars, doing things, and, frankly, making horrible trade deals.  So don’t worry about the money.  I’ll be able to get the money.  The money — we’re going to change things around.

END
10:07 A.M. EST