Saturday, 14 December 2024

FAA chief resignation signals challenge for airline industry

by BD Banks

Nominated by President Joseph Biden and confirmed by Senate in October 2023, Federal Aviation Administration (FAA) chief Mike Whitaker just announced that he would be stepping down from his role as head of the regulatory agency on the day that Donald Trump gets inaugurated for a second term in the White House: Jan. 20, 2025.

While initially confirmed to serve a five-year term, Whitaker is stepping down amid Trump’s threats to oust many current government officials and public sparring with Trump ally and SpaceX founder Elon Musk after the FAA fined the company $633,000 over what is said was a violation of launch regulations. 

With FBI Director Christopher Wray announcing his plans to resign a day earlier, Whitaker’s is the second most prominent resignation of a government official expecting to be fired by Trump.

Donald Trump visits The New York Stock Exchange after ringing the opening bell.

Rebecca Mezistrano-TheStreet

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Whitaker on his departure: ‘Most challenging job of my career’

“The United States is the safest and most complex airspace in the world, and that is because of your commitment to the safety of the flying public,” Whitaker said in a statement on his looming departure. “This has been the best and most challenging job of my career.”

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Prior to being nominated by President Biden after Stephen Dickinson resigned amid the two Boeing 737 MAX  (BA)  crashes in 2022, Whitaker served as COO of the Hyundai  (HYMLF)  flying taxi developer Supernal from 2020 to 2023. 

His resignation opens up the door for Trump to pick a new nominee to lead the organization in charge of regulating the country’s aviation industry — one that many experts predict will see significantly lower oversight in the second Trump era. 

One of the most heavily-criticized periods of Whitaker’s short time in the role came down to oversight of Boeing’s safety processes after the door of an Alaska Airlines  (ALK)  flight blew out mid-flight in January 2024. At a June Senate panel, Whitaker said that the FAA “should have had much better visibility” into the breaches in safety protocols going on at Boeing.

While shares of many airlines and plane manufacturers soared immediately after Trump’s election on Nov. 5, the flip side of lower regulation is both an increase in these types of incidents as well as mergers that could create monopolies on fare prices.

Related: Buttigieg hits back at Delta Air Lines CEO comments on ‘overreach’

‘More hands-off approach to regulation that will impact both passenger protections and mergers’

“The return of the Trump Administration will likely usher in a more hands-off approach to regulation that will impact both passenger protections and mergers,” Matthew Klint of the Live And Let’s Fly publication wrote in November.

Whitaker has generally been a non-controversial figure as both Democrat and Republican lawmakers have expressed support for him guiding the agency through the era of heightened Boeing scrutiny over the last year.

When news of the resignation broke, Sen. Ted Cruz (R-Texas) said that Whitaker “ably led the agency during a challenging period.”

Whitaker will now spend the next month preparing for the transition, while Mark House, FAA’s assistant administrator for finance and management, will step in as acting chief before a new pick is announced.

Related: Veteran fund manager sees world of pain coming for stocks

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