Experts are still debating the future of Republic Airways after the regional operator announced last week it plans to buy two full-service carriers, Midwest Airlines and Frontier Airlines. If both deals are closed, Republic would become the 11th biggest U.S. carrier, at a time when many of the majors are cutting down on their use of regional flights. "The regional business is becoming more difficult, and there will be a shakeout," says industry consultant George Hamlin. Meanwhile, Republic Chairman Bryan Bedford says the strategy is to play "offense and defense" at the same time. "We've signed on to buy two quality brands that can operate profitably, and yet we're maintaining the core business we currently enjoy," he says.
If the Waxman-Markey climate-change bill is passed, America's largest oil companies may have to close refineries, slash capital spending and increase imports, according to ConocoPhillips CEO Jim Mulva. Under the bill, refiners would have to buy allowances for carbon dioxide released at their plants and from vehicles when their fuel was used. "It will lead to the opportunity for foreign sources to bring in transportation fuels at a lower cost, which will have an adverse impact to our industry, potential shutdown of refineries and investment and, ultimately, employment," Mulva said.
The complex cap-and-trade system proposed in the Waxman-Markey bill that the House was to vote on today has advantages over a straightforward carbon tax, but it could be manipulated in a way that would make it less effective, according to this Washington Post editorial. Considering that the legislation could set policy for decades, lawmakers should not settle for something that isn't ideal, the editorial said.
With more restrictive EPA guidelines for aircraft greenhouse gas emissions considered likely and the proposed Waxman-Markey bill under discussion, the airline industry is working to ensure lawmakers consider airlines' concerns about cap-and-trade schemes, fuel-efficiency targets and other initiatives. "You can't set the same fuel efficiency target for every industry, because each has a different record going into a cap-and-trade scheme and different opportunities for abatement of their greenhouse gases," said ATA Vice President Nancy Young.
The Obama administration signaled to lawmakers that it is willing to negotiate on certain aspects of carbon legislation, with the goal of passing a bill this year. Congress is considering the Waxman-Markey bill, which would cut carbon output in the U.S. by 20% over the next decade through use of a cap-and-trade system.