Aero Club of Washington Remarks by Ed Bolen President and CEO, National Business Aviation Association

February 28, 2011

I’ve been coming to Aero Club luncheons for nearly two decades now. This is my first opportunity to speak, and I just want to thank everybody associated with the Aero Club for giving me this opportunity.

For the past couple of years, there’s been a couple of questions that have been nagging me, and I suspect they are the same questions that have been nagging some of you. The first is about the economy. When is our economy going to grow? When we are going to have sustained growth and create jobs?

The other question that’s been nagging me has been the U.S. position on the world stage. Are we going to play a leadership role in the future? I don’t have the answer to either of those questions. That would’ve made for a good speech. But I do know this: I do know that throughout history, great economies and great countries have been defined by their transportation systems. If you think back to the Roman Empire, all roads led to Rome. And the Silk Road that connected the East to the West gave rise to the Mongol Empire, and it later sustained the Ottoman Empire. Great countries, great economies, are built on transportation.

To think back on America, in 1903 there were two fundamental things that happened that I think served our country enormously well. One was that Henry Ford started an automobile company, and his mission statement for that company was to open the roads for all mankind, to make automobile travel — that form of transportation — available to everyone.

That same year, Orville and Wilbur Wright flew at Kitty Hawk, and a few decades later, we made a giant leap for all mankind. I think the fact that we had great transportation in the 20th century here in the United States is a primary reason why historians talk about the 20th century as the American century.

But we’ve closed the book there. We’re on to a new chapter. We’re now on to the 21st century, and I would submit that the 21st century, like all the centuries before it, will be largely defined by transportation. And I submit that aviation will be the key mode of transportation in the 21st century.

I single us out for that honor, or that responsibility, because the fact is we are living in a global marketplace. We’re living in a global marketplace, we’re trading in a global marketplace, and we’re competing in a global marketplace. Our world has got a lot more in common than we’ve ever had before, and the fact of the matter is, aviation has the ability to make face-to-face transportation possible in this global marketplace. Every culture throughout history has valued face-to-face communication, and that’s as true today as it has always been. If you want to do business in India, Brazil, China, Russia, all of those things are only possible on a face-to-face basis if you use aviation.

Aviation is also about the value of time, getting from one place to another quickly. Time has real value. It’s one of the reasons why one-third of all goods by value are shipped by aviation. We don’t ship the most goods; we ship the most valuable goods. Aviation matters.

It also has what a lot of entrepreneurs talk about today as a double hit. If you talk to a lot of companies today, they like to promote the fact that they’re doing something that’s not only good for a bottom line from a profitability standpoint, but also something that’s doing good for the world. I saw the other day Ted Leonsis talking about the Washington Capitals and the Wizards, and he said, you know, we hope they’ll be good businesses, but we’re looking for that double hit. We want to give a city like Washington, DC, great sports teams to rally around. And I heard Howard Schultz talking about how Starbucks, sure, they want to sell coffee and make a profit, but they want to form a community place where people can come together, a reason to dress up, to meet their neighbors, to plug into society. They talked about the double hit of some of these industries.

The fact is in aviation, we’re well beyond a double hit. If that’s a double, then we’re a grand-slam homerun, because the fact is aviation creates jobs, good jobs. Manufacturing jobs. The kind of manufacturing jobs we can keep in the United States in the 21st century. And any economist will tell you manufacturing jobs are the backbone of a strong economy.

But it’s not just the manufacturing jobs; it’s the service jobs. It’s the lawyers. It’s the insurance. It’s the finance. It’s the publications. There are lots of ways that aviation can sustain good jobs. It also has the ability to flexibly link communities throughout the world. Today, you can go from Fargo to Tokyo in less than 24 hours with one stop. Fargo and Tokyo are inextricably connected. With general aviation, you can go from Oskaloosa, Iowa to Pascagoula, Mississippi. We connect communities. We connect companies. We connect people. That’s an important part of that double hit.

And we help our companies be competitive. We allow those face-to-face meetings. We allow time to matter. We allow companies to be there first, be there often.

And we also are important in terms of humanitarian relief. You look at some of the major crises that our community has faced over the past couple of years. Katrina – the airlines were indispensable at moving people out of New Orleans through Louis Armstrong. And general aviation was using helicopters to move hospital patients, and general aviation airports in places like Houma to bring in supplies. We’re there in times of crisis.

So as I said before, transportation defines great economies, and it defines great countries. And now at the brink of an exciting new time, we in the United States need to decide where are we going to go in terms of our aviation future.

The good news is we are today, and have been since 1903, the world leader in virtually every aspect of aviation. Today the largest, safest, most diverse, and most efficient air transportation system in the world is the one we have in the United States. There are more airplanes in U.S. airspace than anywhere else in the world. Most of the airplanes — commercial, general aviation, military — have been built in the United States, and their component parts are largely in the United States.

We’ve been able to see that our airports continue to handle more traffic than anywhere else in the world. Today, if you look at the 10 busiest-airports measured by aircraft movements, what you will see is eight of the 10-busiest airports in the world are here in the United States. The highest-ranking international airport is Beijing. It comes in at number eight, right behind Charlotte, North Carolina. We are the world leader.

That is a tremendous opportunity, but it also has challenges associated with it because leadership sometimes can breed complacency. Sometimes leaders after a period of time can think leadership is a given. We’re going to be leaders because we always have been leaders, not because we’re doing everything we need to do to keep moving forward.

I have a concern that I think a lot of you share, and that’s the fact that aviation is not always viewed as the national treasure that it once was. This past weekend I was out at Dulles Airport, and I saw the picture of President Eisenhower and President Kennedy excitedly opening up Dulles Airport in 1962. And I thought back to all the pictures that I’ve seen of U.S. presidents giving out this call your trophy or participating in the creation of RTCA.

I’m not sure where they are today. It’s been a long time since we’ve opened up a new airport in the United States. And over in China, they are opening up over 10 airports every year, over 100 airports in the last decade. They clearly recognize that this is a great industry, and leadership in aviation matters.

It also suggests that leadership requires a level of communication and more coordination within a community to move it forward. And sometimes within our community, that coordination and the communication has not always been what it should be. I believe that things are moving forward in an exciting new way, that our community is becoming closer knit. The lines of communication are stronger than they have been before. And I think that’s entirely appropriate because the fact of the matter is, we all need each other. We need each other desperately. No segment of our community can succeed at the expense of others.

I had the opportunity to be with Dave Barger from Jet Blue the other day, and he talked about our community as kind of an ecosystem. And I thought that was very apt. The fact of the matter is, we in the general aviation community desperately need a strong commercial airline service, bringing new pilots into the system, creating a job opportunity that is out there. And we certainly need the mode of transportation. NBAA’s members buy $12 billion worth of commercial airline tickets every year. All of us recognize that the airports are really the gateway to all of the communities; they’re the first things that people see. So cities that are trying to promote jobs and opportunities need strong airports. All of us do.

We also recognize military’s got a role to play. A lot of the technologies that we have are the result of lessons learned through the military. HUD [heads-up display], for example, is an opportunity that has done a lot to improve the safety of general aviation pioneered by military. All of us are in this together: general aviation, commercial aviation, military aviation. We are very much all part of the same ecosystem.

So if we’re all in this together, and we’re beginning to communicate and coordinate at a level we haven’t before, where are we going to focus our time and attention? What are the things that are going to galvanize us and give us the opportunity to work together as we move forward? I would submit there are at least five areas that are very worthy of our time and our attention.

The first, of course, is FAA reauthorization. It’s exciting to see the progress that is being made, and I really want to take the time to commend and congratulate Senators Rockefeller, Hutchison, Cantwell, and DeMint for moving through the Senate an FAA bill. It’s striking that that is one of the first priorities of the new Senate, and I think it’s something that ought to give us all a lot of excitement. And we’re seeing progress in the House of Representatives. Again, congratulations to Chairman Mica, Congressman Rahall, Petri, Costello.

A lot of work to get that through the committee and give us the opportunity to give the FAA what we all know they need: an opportunity to work on a multi-year basis, operating at three months’, at six months’ extension. Doing it over and over for years on end is not any way to move our transportation system forward. Getting FAA reauthorization done is a worthy goal for our community. It’s been a challenging process. It’s a painful process at times. But we’re on the cusp of getting that done, and I think we need to work collectively to get that ball across the goal line.

I would also say that national security is an effort that ought to combine all of us. I think our community — the aviation community at large — has taken security and its challenges more seriously than any industry in the world. We have worked hard. But it also ought to be understood and known that national security is a national security priority. One industry cannot be expected to shoulder that entire burden. National security ought to be reflected as something that protects all Americans, not just the traveling public. And as a result, funding ought to be reflected as a national priority.

The environment is another issue that is clearly on the front burner in the United States and around the world, and there have been those who have suggested that aviation hasn’t always played its part. Anyone who makes that suggestion has not reviewed the data. Our community — aviation — has a sustained record of improvement for decades. We have also collectively signed onto aspirational goals that show as much progress as we have made, we still have more to go. And the efforts that we are talking about, everything from new research and development to alternative fuel, suggest that we take the environment seriously, and we recognize that we’ve got a responsibility to continuously improve, and to make sure that we are sustainable going forward.

The fourth area that I think we all need to keep in mind is the general fund contribution. When the airports and the airways program was established in 1970, the idea was that users of the system would pay additional taxes to help fund capital expenditures. Almost immediately money was taken from those capital expenditures and moved over to FAA operations. When it started, about 80 percent of the operational funding came from the general fund; about 20 percent came from the airport and airways trust fund. Today that’s flipped and has been going down. We need to make sure that people understand the general fund contribution is not a subsidy to aviation. It’s not a handout to our industry. It reflects the fact that every American, regardless of whether they get on an airplane or not, benefits from having a strong air transportation system.

When we had a situation and general aviation airplanes were not allowed into Reagan National Airport, it was striking to see Congresswoman Eleanor Holmes Norton say we have terrible losses in the District because of that. Taxi drivers are being hurt. Hotels are being hurt. Restaurants are being hurt. Commerce is not happening because we have closed off aviation, and the general public is suffering. That’s the kind of link between the general fund contribution — the taxes that are paid by general taxpayers because they benefit from a strong air transportation system — and a government handout.

And then finally, NextGen, as I said before, the U.S. has today the world’s largest, safest, most diverse, most efficient air transportation system, but it won’t be good enough going forward. NextGen is about taking ground-based navigation and making it satellite based. It’s about taking analog technology and making it digital. NextGen is about policies, procedures, and technologies that will have the simultaneous benefit of increasing our throughput.

Being able to have precise spacings so that when the Anders (phonetic) say you’ve got to have three-mile space and we have precise three-mile spacing, not four, five-, six-mile because we need to have a fudge factor. It’s about direct approaches and curbed approaches to minimize the time in the air. NextGen has the potential to reduce our environmental footprint by as much as 15 percent. NextGen can definitely enhance safety by providing better situational awareness. So this effort to bring the policies, and the procedures, and the technologies together going forward so that we have more capacity, a smaller footprint on the environment, and better safety, becomes one of the key challenges to everyone in our community.

And I have to say that I’m excited about the progress that has been made. Over the course of the past two years, we’ve seen that our community has come together through RTCA to write CAD Force 5 (phonetic). That’s been endorsed by the FAA administrator, and we now have an implementation group called the NextGen Advisory Council that’s being chaired by Dave Barger. We’re beginning to clearly articulate where we want to go on NextGen in the time that we want to get there. Getting that right I think it is an imperative not just to the aviation community, but to America’s leadership in a global economy.

As I said before, aviation will be the defining mode of transportation in the 21st century. It will bring the district people and cultures together in a real-time basis the way no other mode of transportation can. And if you doubt that transportation is important, remember the history.

And if you doubt that aviation will be the defining mode in the 21st century, I’ll simply close by saying this: two miles of waterway will take a boat two miles. Two miles of highway will take a car two miles. Two miles of railway will take a train two miles. Two miles of runway will take an airplane anywhere in the world. That’s our industry. It’s a great one. Let’s work together to promote it. Thank you.