Meeting Details:
Next meeting: April 4th: 8:00pm, Zoom:
Agenda:
Headlines
Madison Station RFP
ESG and the Airlines
When Republicans Loved High Speed Rail
Faster Headlines
Wheels on Steel:
FEE Stories
San Francisco Examiner
TR&S
Skift
South China Morning Post
In the Tube:
Things Austin 365
(note: this was published on April 1st)
The WV State Journal
Up in the Air:
National Geographic
Bloomberg Green
Forbes
High Speed Rail Alliance
On March 25th, Michael Schlicting gave a presentation to the High Speed Rail Alliance on "The Tail of Two Seats - how airlines need high speed rail".
For more details:
ESG Is coming, are the airlines prepared?
On the surface, this might make your eye's roll in boredom, because it sounds as exciting as doing your taxes. However, pop open the hood and take a look. You will realize something crazy is going on here.
On March 21st, the Securities and Exchange Commission (SEC) opened for public comment rules on corporations reporting their ESG (Environmental, Society, and Governance) performance. This is pivotal for the airline industry.
First, United Airlines has been the only airline that reports its ESG performance. This is likely the reason that United has been so active in investing in carbon capture technology and investing in electric airplanes. United see's what is coming. Other airlines have produced their ESG reports separate from their SEC filings, but lack the detail.
So why does this matter?
Well, first it standardizes how a corporation reports its CO2 emissions. Today, airlines report their ESG performance thru different outlets with their own calculations. However, now every airline will have a standardized format. Second, nearly every airline will have to report. This does not just include American or Southwest, but Skywest, FedEx, and Allegiant who do not report ESG now. Third, this may affect who invests in the corporations. For example, 54% of American Airlines is owned by institutional investors, Southwest is 78%, United 58%, Delta 64.6%, and Skywest 89%. If those investment institutions develop ESG standards, and the airlines don't meet them, well…we may be looking at a huge selloff in shares. Not only would we be looking for huge declines in share price, but may also affect their credit rating. Just like with individuals, a lower credit rating for an airline would mean higher borrowing rates. Meaning borrowing to buy new aircraft, new routes, and new products will become much more expensive; and ultimately the airline will be less profitable.
The difficulty around ESG is that it is a risk assessment, which is exposure to risk to its peers and not necessarily a direct rating of sustainability initiatives. After all, an airline might be actively investing in sustainable initiatives, but an airline that just bought brand new and efficient aircraft would rate higher. So ESG ratings can be misleading. However, with the SEC reviewing making ESG part of the corporate reporting, we will see things change. Especially when it comes to tier 2 and tier 3 suppliers to the airlines (which is a subject for next week). We will talk more about that next week, and how high-speed rail could be used by the airlines to offset their ESG risks.
Next week: How High-Speed Rail will help not only the airline’s ESG but nearly every company with large travel budgets ESG ratings.
When Republicans Loved High Speed Rail (Part 1)
The year is 1854 and slavery was tearing the nation apart. In a schoolhouse in Ripon, WI; those wishing to form a new political party gathered and named themselves “Republicans”. It would still be six years until Abraham Lincoln would be elected, but the Grand Old Party (GOP) was quickly building a base. The main priorities of the party: modernizing America, opening the west to farmers, and building railroads…specifically the transcontinental railroad.
How things have changed.
Even as recently as the 1950s, the Republicans were pro-rail. For example, in the 1957 book Atlas Shrugged, the story revolves around the building of a high-speed rail line against the will of a Democratic party gone communist. The Republicans were seen as the heroes of big industry and the core was fast rail. Not the case in 2022.
How did we get here where the Republicans are now the Anti-High Speed Rail party? Well, its really the decline of passenger rail in the US over the past 50 years and inability of Amtrak to make a profit.
Although it is not the core of the Republican party that is against high-speed rail. After all, even Newt Gingrich in the late 1990s supported building high-speed rail. It wasn’t till the Libertarians movements of the 2000s that there was a big switch in lack of support for high-speed rail, which specifically began with the election of President Barack Obama in 2008.
It was 2009, and the United States was suffering from the effects of the great recession. In the stimulus bill signed under the Obama Presidency (called the American Recovery and Reinvestment Act) $8 billion became available for redevelopment of high-speed rail in the US, and Wisconsin was in line to get everything it asked for to upgrade the Milwaukee to Chicago Hiawatha and extend that line to Madison. The irony is that high-speed rail project didn't begin with a Democratic, but a Republican Governor. It all began with Republican Governor Tommy Thompson and continued under Democratic Governor Doyle; it truly was bi-partisan.
But in 2009, the rural parts of Wisconsin were hurting badly from the closures of car manufacturing plants. Those citizens in cities such as Kenosha, Janesville, and Eau Claire were struggling to find work and were not happy to hear about Milwaukee and Madison getting close to $1 billion in federal funding. After all, so many small cities still had an abandoned train station at their core, with a struggling old downtown surrounding that station. That train station was the symbol of the loss to those towns of what once was, and the federal government investing in Milwaukee and Madison made those smaller Wisconsin towns feel forgotten and left out.
Then comes a County Executive from Milwaukee with aspirations to become Governor of Wisconsin. He picked up on the animosity within the state of Wisconsin, with people struggling to eat while it was perceived that Madison and Milwaukee got rich from federal funds. With a campaign slogan of “Notrain” Scott Walker became governor of Wisconsin, and not only shut down the high-speed train project from Madison to Milwaukee, but started the trend in the Republican Party of turning against high-speed rail; which we see continuing today down in Texas.
Over the next 3 weeks, we are going to talk in more detail about those rural areas of America that don’t want high-speed rail, and what can be done to change their minds. Most importantly, answer the question of why rural America wants high speed rail.
Next Week: The rural train station and the Republicans:
The Faster Badger is produced by students at the University of Wiscosin-Madison to help break through the misconceptions of high speed rail and high speed transportation. This blog is for educational purposes only and all opinions presented are of the students.