FAA sequestration could cost air cargo system $2bil
The Aerospace Industries Association (AIA) have released a report this week detailing the devastating effect of proposed budget cuts to the Federal Aviation Administration (FAA). According to the report, the proposed sequestration could cost up to 132,000 aviation jobs, sap $80 billion a year from US gross domestic product and strip almost two billion dollars of freight capacity out of the air cargo system.
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According to the study, which was performed in association with Econsult Corporation, annual economic losses could result in an annual decrease of $37-73 million in passenger enplanements and annual reduction of 1-2 billion dollars of transported air freight. The overall forecasted loss in output to the US economy is estimated to reach $9.2-18.4 billion, with an added $2.7-5.4 billion lost in wages.
“If sequestration is not stopped, it will be by far the most devastating budget cut to the FAA in its 54 years,” said former Secretary of Transportation and Congressman Norman Mineta to the AIA. “The FAA is a critical safety organization that regulates our national air transportation system. Putting it at risk is folly beyond comparison.” Mineta is currently vice chair of public policies at Hill + Knowlton Strategies.
According to a letter from Rep. Norm Dicks (D-Wash.), ranking minority member of the House Appropriations Committee, sequestration could result in the closure of 246 airport control towers, and the loss of 1,500 air traffic controllers, 9,000 security screeners and 1,600 customs officers.
Delays to NextGen control system
The proposed sequestration of the FAA is triggered in 141 days unless congress acts soon to repeal or delay it. According to the AIA, these budget cuts would also delay implementation of the Next Generation Air Traffic Control System by a decade or more. Currently scheduled for 2025, the proposed full implementation of NextGen was expected to provide more that $281 billion in net benefits, save 27 million hours of flight delays and reduce emissions by 216 metric tonnes.
“Sequestration would force the FAA to slash operations, bringing gridlock to the skies today, or defund modernization and infrastructure work. The closer we study sequestration the more destructive it turns out to be.” said Stephen P. Mullin, vice president and principal of Econsult Corporation and author of the study.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany