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Mon, Apr 01, 2013

Sequestration Pushes FAA Into Chapter 11

Will Follow The Industry Template For Reorganization

ANN April 1 Special Coverage

Citing the cuts forced on the FAA by sequestration, Administrator Michael Huerta today announced that the agency would be entering Chapter 11 in an effort to completely reorganize the agency.

In testimony before the House Transportation Aviation Subcommittee last month, Huerta pointed out that but bulk of the cuts being imposed on the DOT would fall on the FAA, and today he said he would be following the example of so many of the businesses regulated by the agency and basically start from scratch. "Everything is on the table," Huerta said in a hastily-called news conference.

"We'll be looking at everything from certification to the number of controllers working at towers around the country. Safety will continue to be our number-one priority, but if you're going to run government like a business, well, this is one of the options available in the corporate world."

The agency has retained the law firm Gabb and Steele to represent it during the proceedings. "We expect to emerge from Chapter 11 as a more efficient and nimble agency able to better respond to the needs of the industry," Huerta said.

"What's good for the goose is good for the gander, and it will give us valuable insight as to what the industry faces during trying economic times."

The move has the blessing of both DOT Secretary Ray LaHood and President Obama, who said it was appropriate to spread the wealth around among attorneys. The White Hose said it was a jobs-creation measure, estimating that the case would mean several hundred jobs in the legal sector alone.

FMI: www.faa.gov

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