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Overturned ban, budget proposal roiling industry

President Donald Trump last week lost another round in his high-profile fight to ban travelers from certain Muslim countries, but the fallout from tweets, executive orders and budget proposals he has issued in his first two months in office could spell long-term uncertainty for the industry.

Just hours after courts in Hawaii and Maryland last week lifted his revised ban on travelers from six countries shortly before they were to go into effect, Trump released a budget blueprint that proposes terminating a long-standing federal program for encouraging air service to rural communities.

The proposal would also end support for long-distance Amtrak service.

Additionally, less than a year after the TSA added security agents and bomb-sniffing dogs to reduce more than hourlong security line waits at U.S. airports last summer, Trump has proposed fee hikes and funding cuts for the agency.

The combination adds up to continued uncertainty and, potentially, negative fallout for the industry as a result of both the proposals themselves and the very public and sometimes racist debates that Trump's actions have stirred in the international press and on social media.

"Reputational fallout is a very real thing," said Jonathan Grella, executive vice president of public affairs at the U.S. Travel Association. "And fair or not, perception is reality here. That is another argument for us to be deliberate, overt and even aggressive ... in pushing the administration to go the extra mile in making clear your intentions and really making sure your motivations are understood, even if they are not liked."

U.S. Travel has been pushing the administration through correspondence, private meetings and other channels, he said, to issue a statement making it clear that while it continues to push its travel and refugee ban, it welcomes legitimate international and leisure travelers, particularly from places such as Canada and Europe.

 "A statement of welcome for legitimate travelers is by no means inconsistent with measures to assess and bolster security," Grella said. "In fact, without effective security, legitimate travel could not exist. In this manner, the White House could continue to pursue security objectives while avoiding any unintended economic consequences of a travel ban."

That kind of statement, he said, is in fact "critical, considering inbound international travel is the No. 3 U.S. export and supports 15.1 million un-outsourceable domestic jobs."

Eben Peck, senior vice president of government and public affairs for ASTA, said any uncertainty is bad for the travel industry, but it's too soon to tell what the long-term impacts of Trump's actions may be.

For example, he said, the budget proposal, while short on details contains both "threats and opportunities."

While cuts for things like subsidies for small airports and Amtrak could harm the industry, he said those are "perennial issues" that are often proposed but overridden in Congress.

"These programs have a lot of Congressional champions," Peck said. "A lot of this is going to fall by the wayside."

Still, any cuts to the Essential Air Service program, enacted in 1978 to help remote towns remain in the national air traffic network when the airlines were deregulated, would be another blow to small-town airports in the U.S. And it would come at a time when many of them have already lost some or all their commercial service as regional airlines struggle with a nationwide pilot shortage.

As of last October, the Essential Air Service program subsidized commercial flights in 120 communities in the continental U.S. and Hawaii.

On the positive side of Trump's budget proposal, Peck said, there is a very strong antiregulation section that could offer an opportunity to eliminate some onerous disclosure and labor regulations that hinder travel agents.

"There are a lot of regulations that travel agents need to deal with," he said. "On air tickets, for instance, they need to make about eight or 10 disclosures on things like codeshare, hazardous materials and warnings that their plane may be sprayed with insecticide."

The antiregulation sentiment, he said, might offer a way "to create a new system, one unified way to make these disclosures to consumers, maybe one website that consumers could be referred to as opposed to ticking off eight to 10 items."

Trump has endorsed a proposal to privatize the U.S. air traffic control network, a move that is generally supported by the travel industry. But any enthusiasm for that move seems to have been overridden by his proposed fee hike and cuts to other programs.

Kevin Burke, president and CEO of the North American chapter of Airports Council International, said, "While president Trump has been a vocal proponent of improving our airport infrastructure and enhancing security across the country, today's budget proposal misses the mark when addressing these key airport challenges."

Burke added, "To provide the safest and most secure passenger experience possible, we must ensure that airports have the resources they need to improve their infrastructure and that the [TSA] and U.S. Customs and Border Protection have the staffing resources they need to protect the American public in a complex world while providing an efficient screening process."

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