WASHINGTON, D.C. — U.S. Senator John Thune (R-SD), Ranking Member of the Senate Committee on Commerce, Science, and Transportation, submitted for the record the following prepared remarks at today’s “The U.S. Aviation Industry and Jobs: Keeping American Manufacturing Competitive” Aviation Operations, Safety, and Security Subcommittee hearing:

I would like to thank Subcommittee Chairwoman Cantwell and Ranking Member Ayotte for holding this hearing today, and thanks to the witnesses for testifying.

The United States is a leader in aerospace design and manufacturing. The sector is a source of thousands of high-quality jobs for businesses large and small.

While it is good news that many segments of the aviation industry appear to be rebounding from the recession, the industry continues to face a number of challenges.

Fuel prices remain volatile, pressures from our international competitors are growing, and tax and regulatory burdens are drags on our global competitiveness.

I am keeping a close eye on developments regarding the European Union Emissions Trading Scheme (EU ETS). This is an issue Senator McCaskill and I, along with Senator Ayotte and others, have been confronting head on for quite some time. The EU ETS is little more than a unilateral tax-grab that would hurt American operators and the traveling public when flying into and out of Europe.

In 2012, we led an effort to protect U.S. interests from this controversial tax, culminating in the EU Emissions Trading Scheme Prohibition Act, which was signed into law in November 2012. That law required the Secretary of Transportation to hold U.S. operators of civil aircraft harmless from the EU ETS, and directed the Secretary to conduct negotiations at the International Civil Aviation Organization (ICAO) charting a path for a global, consensus-based approach to aviation emissions.

I am pleased with the positive outcome on the global aviation emissions agreement at ICAO’s 38^th General Assembly, which rejected unilateral approaches. At the end of last year, the EU had announced proposed changes to the EU ETS that appeared inconsistent with the ICAO agreement. However, recent press reports indicate the EU may extend the moratorium through 2016.

This would be a positive development, and I look forward to hearing from the witnesses on this issue, including how the absence of a continued moratorium could affect aviation competitiveness, U.S. consumers, and trade relations with the EU. 

During his confirmation process, Secretary Foxx was clear that the Department of Transportation would enforce the provisions of the EU ETS Prohibition Act. I look forward to continuing to work with my colleagues and the Department to confront this challenge.

Another issue on the international front that I look forward to hearing about today is the impact of state sponsorship of foreign air carriers on the competitive landscape of international markets. 

While the Middle Eastern carriers have been important customers of our aviation manufacturing sector, we should be careful to consider the impacts state sponsorship may have on U.S. air carriers’ ability to compete in international markets, as well as the potential consequences of Open-Skies agreements and what that could potentially mean for domestic service that exists today – including service to small and rural communities. 

Today, I hope to hear our witnesses’ views on what U.S. government policies help or hurt our carriers’ competitiveness in this regard.

Thank you, Chairwoman Cantwell.   

###