Air Transport Association CEO Nick Calio is piloting the airline lobby through a complete overhaul.
Less than a year into his tenure, Calio is set to unveil Wednesday a new name for the industry trade group: Airlines for America — We Connect the World. That’s A4A for short — and the new name will be accompanied by a new logo. But the rebranding, often a monumental task with internal association politics, is just cosmetic compared to the other changes he is leading.
Delta CEO Richard Anderson, who chairs the trade group’s board, said the reorganization is commensurate with an industry that has undergone major changes over the last three decades.
“The trade association had not really been touched since deregulation. We had a number of antiquated governance provisions, antiquated dues structure,” Anderson said.
“The organization was not funded or governed in a way that really reflected the much more professional management teams that you have across the industry.”
The goal being to significantly increase funding, resources, people, tools and consultants to make the airline industry association among the best inside-the-Beltway trade groups.
Hiring Calio was a big part of that initiative.
“We really need a strong leader in the form of the president of the association to carry out the strategy, implement the strategy, and that’s exactly what Nick is doing for us,” Southwest Airlines CEO Gary Kelly said.
Calio is no newcomer to working in an industry under fire. The former head of legislative affairs under both President George H.W. Bush and President George W. Bush joined the airline trade group after a multi-year stint leading Citigroup’s in-house lobbying operation during the financial downturn.
The newly named A4A is wheels-up on reorganizing and restructuring everything from its internal bylaws to making several personnel changes to outlining a national airline policy initiative. The group is also planning on harnessing its workforce to grow its political contributions. After its PAC fundraising peaked in 2006 raising nearly $120,000, the association has seen dwindling numbers in PAC contributions. This year, the airline association PAC has only taken in $2,000 in receipts, according to FEC records.
The industry group, which has 14 member companies including American Airlines, Southwest and Federal Express, had an operating budget of about $22 million in 2009, according to the most recent publicly available tax filings. Of that, $18 million came from dues. The trade group declined to discuss the increase in funding, saying the 2012 budget still needs board approval.
“Part of what we did in terms of reorganization and restructuring was to create the first ever strategic plan for ATA, where previously there had been none,” Calio said of the multi-pronged effort that included implementing a strategic planning process as well as business plan. “We saw the need to both repair and establish the reputation of ATA.”
In large part that has meant a complete reorganization of its in-house and contract lobbying team. Gone are industry veterans like CEO and President Jim May and others in the association’s K Street team and communications department, including more than a handful of contract lobby shops. In their place, are veteran Hill operatives such as Sean Kennedy, former legislative affairs aide to President Barack Obama, and Christine Burgeson, a former legislative affairs aide to President George W. Bush.
“We want to have the ‘A Team’ when it comes to advocacy,” Calio said. Eight employees left the organization in February, according to association officials.
Overall lobbying numbers are down year to date with the airlines spending $2.7 million over the first nine months of 2011 compared to the $3.4 million it spending over the same time period in 2010. Calio said that is because they have been in a rebuilding mode adding additional staff and outside consultants. The trade group now includes Breaux Lott Leadership Group, Elmendorf Ryan and Ernst & Young among its retinue of hired guns.
These changes comes as the airline industry is facing an uphill economic and legislative battle. The Federal Aviation Administration’s reauthorization bill is hanging in the balance and the industry has lost tens of thousands of jobs over the last decade.
For his part, Calio sees the industry at an “inflection point” where “positive government action” happens or else the airlines will go the way toward extinction like the maritime industry. Instead, Calio would like to see the airlines find a more workable model with less taxes as the railroad industry underwent in the 1970s.
Rep. Bill Shuster (R-Pa.), chairman of the subcommittee on Railroads, Pipelines and Hazardous Materials, said that he has noticed a big change in the organization over the past seven months.
“Prior to Nick being there, they were basically AWOL,” Shuster said, noting that the group has done a good job bringing the nearly 20 freshman Republicans on the Transportation and Infrastructure Committee up to speed.
Shuster said that face-to-face education on the economic impact on the traveling public and proactively talking to members and bringing them up to speed will pay off.
Associations “can’t be sitting in your offices on K Street sending out blast faxes on the Hill,” Shuster said.
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