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Boeing crisis a billion dollar hit for airlines


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A pair of U.S. airlines have lost nearly $1 billion due to the Boeing 737 MAX’s grounding, and one company could turn away from Boeing aircraft altogether.

A new DOT rule on tarmac delays would give airlines more flexibility, but consumer groups are worried the regulation may weaken passenger protections.

Senate Minority Leader Chuck Schumer is proposing a $400 billion cash-for-clunkers-style auto trade-in program aimed at getting more Americans to purchase electric vehicles.

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“In fifteen hundred and eighty we sailed our little ship / Around the coast of Africa down the Gaza strip / We took some salty bacon and a hammock for a bed / Then we mixed it with the Spaniards in the middle of the Med

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BILLION DOLLAR BOEING BLOW TO CARRIERS: As David Koenig of The Associated Press reports, American and Southwest Airlines gave their quarterly earnings reports on Thursday, and the effects of the MAX situation were starkly present in the numbers: The grounding has cost Southwest $435 million in operating income since March, and American estimates that its MAX-related losses for the year will be $540 million.

CEOs of both companies said they’re in early talks with Boeing about getting compensated for the losses. And Southwest CEO Gary Kelly, whose airline has always had an all-Boeing fleet, said the company is looking into whether it should buy aircraft from other manufacturers. “We put our future in the hands of Boeing and the MAX, and we’re grounded,” Kelly said on CNBC.

A final report is expected today on the Lion Air crash involving a MAX which killed 189 people in Indonesia last October.

DOT PUBLISHES NEW TARMAC DELAY PROPOSAL: The DOT is publishing a new proposed regulation today which would update its rules on airline tarmac delays, as mandated by Congress in 2016, giving carriers more flexibility to operate. The time limit by which airlines need to let passengers deplane will not change — it remains three hours for domestic flights and four hours for international flights. But the proposal would shift how that clock is interpreted, including changing when planes are considered to be heading back to a gate, and stipulating that the clock should not necessarily start when an aircraft’s doors close.

Travel Fairness Now, a consumer advocacy organization, said the changes are “another example of the undue influence that carriers have over DOT policy,” arguing that consumers have been waiting for FAA action on other issues that “occur far more frequently than the relatively rare occurrences this rulemaking addresses.” Paul Hudson, head of another consumer group, FlyersRights.org, said his organization is reviewing the rulemaking and plans to file formal comments, but that the change “looks like a weakening.”

The airline industry group Airlines for America said in a statement “we commend the Department of Transportation for proposing an improvement to its tarmac delay rule as required by the statutory requirement in the 2016 FAA Extension Act.”

A BUSY WEEK FOR DEFAZIO: House Transportation Committee Chairman Peter DeFazio (D-Ore.) has his hands full. He’s pushing DOT to hand over more records about the Boeing 737 MAX and is planning for a high-profile hearing with Boeing’s CEO next week. He’s working on a surface transportation bill that was targeted for release earlier this year (after which it could need some heavy lifting to mesh with Senate Republicans’ own bill). And now, he’s placed himself into the bright spotlight of the House’s investigations into the Trump administration, escalating his committee’s probe of the Trump International Hotel lease with a subpoena of the General Services Administration on Thursday.

MAILBAG: The American Public Transportation Association wrote to the Senate Appropriations Committee this week, asking lawmakers to reconsider cuts to public transit which were included in the committee’s transportation spending bill, S. 2520 (116), which is working its way through the legislative process. APTA said the bill reduces total funding for public transportation by $457 million compared to fiscal year 2019 enacted levels. They also want the bill, like the House’s version, to block an impending $1.2 billion cut to transit formula funds in 2020 triggered by a budgetary rule called the Rostenkowski test.

CHUCK’S EV PLAN: Schumer’s got a grand idea for increasing electric vehicle adoption. As Pro Energy’s Anthony Adragna reports, the proposal would offer vouchers starting at $3,000 to trade in gas-powered cars for plug-in electric, plug-in hybrid or hydrogen fuel cell cars. According to Schumer’s office, larger vouchers would be available for low-income consumers or to purchase American-made vehicles.

The caveats: Schumer hasn’t started writing the legislation, and says it would be part of a climate bill he wants to do if Democrats are able to take the Senate back. He’d also face serious opposition from oil companies and Republicans in Congress, who are opposed to adding government incentives to boost the EV industry.

Schumer also wants to add $45 billion in new grants to deploy charging infrastructure across the country, and $17 billion to encourage U.S. factories to produce zero-emission vehicles or manufacture charging equipment.

WHAT AMERICANS THINK ABOUT AUTONOMOUS VEHICLES: What’s the first thing you would do in a fully self-driving car that you can’t do while driving now? For nearly half of respondents in a new Adobe Analytics survey, the answer is eat and drink. Slightly lower down the list are activities like emailing, reading, talking face to face and even sleeping. The survey also found that 40 percent of drivers are in favor of self-driving cars being available for purchase in general, and that millennials are most accepting of self-driving cars and connected car features. Pro subscribers can check out more insights from the survey here.

Murphie Barrett, who recently left the House Transportation Committee staff, has landed at Associated General Contractors of America, where she’ll be vice president of congressional relations for infrastructure advancement.

— “Virgin Trains project gets approval for $3.25B in bonds.” Las Vegas Review Journal.

— “Alphabet in AI: How Google went from a search engine to an $800B global AI powerhouse.” CB Insights.

— “GM contract vote by striking UAW workers heads into final hours.” Reuters.

— “Driving tiny electric cars helped these lab rats feel more relaxed, and we should all learn from them.” The Verge.

— “Toyota goes all-out bonkers at the Tokyo Motor Show with robots and flying brooms.” Jalopnik.

— “Software under scrutiny in Airbus A220 engine failures.” Reuters.

DOT appropriations run out in 28 days. The FAA reauthorization expires in 1,437 days. Highway and transit policy is up for renewal in 342 days.





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