Delta CEO’s Customs-Lines Rant Shows Impact of U.S. Cuts
Delta Air Lines Inc. (DAL) Chief Executive Officer Richard Anderson’s blasting of U.S. delays clearing international passengers at airports as an “embarrassment” highlights a visible sign of government spending cuts.
Delta travelers face long processing times by U.S. Customs and Border Protection in New York, Los Angeles and Chicago, while comparable cities in Europe, China or Japan are “a breeze,” Anderson told analysts on a conference call yesterday.
“So far, our government has failed to provide the level of service that we should be providing if we want to see the third-most important industry in the U.S. -- travel and tourism -- continue to grow and continue to contribute to a growing” gross domestic product, he said on the call.
Anderson joined complaints from airline, hotel and other travel companies that delays for arriving passengers create negative word-of-mouth overseas that may deter travel to the U.S. and pose a threat to economic growth. Customs officials are blaming the lines on automatic cuts to the agency’s budget.
Delta, which earned $2.9 billion or 43 percent of its mainline passenger revenue in the second quarter on international flights, recently opened a $1.4 billion terminal at John F. Kennedy International Airport in New York, in part to improve the experience for foreign travelers.
The U.S. travel industry grew 7.8 percent in 2012 and foreign-visitor revenue represents 12 percent of U.S. export growth, according to the U.S. Travel Association, which represents hotels, rental-car companies, and local convention and visitor bureaus.
Customs delays were cited in March study by U.S. Travel as putting $95 billion of economic activity and 518,900 jobs at risk. The CBP, meanwhile, is planning a passenger “pre-clearance” center in Abu Dhabi.
“Around the world, people believe, with the U.S. as a superpower, this is something we should be able to resolve,” said Patricia Rojas-Ungar, vice president of government affairs at U.S. Travel. “We’re trying to get to the answer of why it’s getting worse.”
Homeland Security Secretary Janet Napolitano, who’s stepping down in September, warned earlier this year that budget cuts would reduce overtime and cause delays at international airports. Last month, Customs received some funding from Congress to offset effects of the automatic cuts known as sequestration, said CBP spokeswoman Stephanie Malin.
Other effects remain and will have “serious impacts on CBP’s operations, including nearly $600 million in cuts,” she said.
The Senate authorized 3,500 new inspections officers in its immigration bill, Rojas-Ungar said. That legislation, which hasn’t passed the House, establishes a goal of processing 80 percent of travelers in 30 minutes or less, she said.
Anderson’s tirade also reignited the debate over CBP’s disputed decision to open a “pre-clearance” facility in the United Arab Emirates city.
“In the U.S. we collect a fee from every passenger, but cannot get the kinds of levels of support,” Anderson said. “The answer shouldn’t be to outsource JFK to Abu Dhabi.”
That move has been the subject of an increasingly intense lobbying campaign by the airline industry, the Air Line Pilots Association and the AFL-CIO’s Transportation Trades Department.
The U.S. government shouldn’t be spending money at overseas locations that don’t serve U.S. airlines, the groups say. The Abu Dhabi facility gives a government-backed airline, Etihad Airways, an unfair competitive advantage with U.S. taxpayer funding, they say.
Malin declined to answer a question about the center.
Travelers are waiting in line as long as four hours at major U.S. airports, said Vaughn Jennings, a spokesman for Airlines for America, a Washington-based trade group. At JFK, the average daily peak waiting time was 94 minutes in May, a 35 percent increase from a year ago, he said.
“Passengers are losing millions of hours each day waiting in these excessive and unacceptable lines,” Vaughn said. “Upon arriving in the U.S., air travelers shouldn’t be greeted by a frustrating, inefficient experience.”
One in three international travelers surveyed by U.S. Travel said the U.S. Customs experience was inconsistent, confusing or embarrassing, the Washington-based travel association said in its report. Forty-three percent of international travelers told others to avoid the U.S. because of the delays, it said.
Both chambers of Congress include money for more Customs officers in their Department of Homeland Security appropriations bills, Rojas-Ungar said. Those measures would pay for between 1,500 and 1,800 new officers, about half of what the Senate immigration bill would provide, she said.
The agency is using improved facilities and queuing techniques, Malin said in an e-mailed statement.
“CBP is aggressively working to transform its air passenger processing efforts by automating travel documents, integrating mobile technology and advanced biometric solutions,” Malin said.
Delta emphasized the steps it’s taking to compete in the lucrative international travel market during its analyst call yesterday.
By the end of the year, 85 percent of the airline’s international fleet will have flatbed seating. Delta will be the only U.S. carrier to offer on-demand audio and video at every seat on long-haul international flights, the company said.