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By Carol E. Lee and Susan Carey 

WASHINGTON -- President Donald Trump, meeting with airline executives at the White House on Thursday, suggested adopting changes to the government's air-traffic-control system and placing a pilot at the head of the Federal Aviation Administration.

Mr. Trump also promised the executives he would reduce government regulations, lower taxes on American businesses and fund infrastructure upgrades, all of which he said would help their companies hire more workers.

His agenda received a warm reception from those who attended the meeting, which included chief executives from United Continental Holdings Inc., Delta Air Lines Inc., Southwest Airlines Co., Alaska Air Group Inc., three cargo carriers and heads of airports in Los Angeles and Atlanta.

Mr. Trump said the air-traffic-control system is "totally out of whack" and said his policies would soon start helping companies such as airlines hire more people, including "rolling back burdensome regulations" and "lowering the overall tax burden of American businesses."

"We want the traveling public to have the greatest customer service and with an absolute minimum of delays," Mr. Trump said. "And we have an obsolete plane system, we have obsolete airports."

Southwest CEO Gary Kelly, speaking to CNBC after the meeting, welcomed the focus on modernizing the air-traffic-control system. "We believe there is about $25 billion of waste annually with the system that's currently being used," he said. "That's where I think you can get the biggest bang for the buck."

Since Mr. Trump's election, airlines and airports have said they are optimistic about his plans to lower taxes and raise infrastructure spending. But it isn't yet clear how those policies would be implemented.

Mr. Trump promised an announcement within the next three weeks that he said would be "phenomenal in terms of tax."

Many airlines support a plan to remove air-traffic-control operations from the FAA and place them into a not-for-profit corporation. Some four dozen nations already have taken that step. But an earlier House Republican effort to win congressional support for the concept was unsuccessful.

Under the Obama administration, the FAA didn't back proposals to switch to a privatized system and Senate Republican leadership also balked at supporting such a move.

The FAA's mandate will expire in September, providing an opening to discuss such changes. A spokeswoman for the FAA had no immediate comment Thursday.

Most U.S. carriers believe a corporate air-traffic-control system separate from the FAA would be more efficient because it would allow them to raise funding from the financial markets, rather than relying on congressional appropriations.

But Delta has opposed the plan, saying the transition would be risky. Some corporate-jet and private pilots also oppose the concept because they fear it would raise their costs.

U.S. airline shares briefly dipped after Mr. Trump's remarks then recovered to hold onto earlier gains that topped the broader market, led by a 3.3% advance at American Airlines Group Inc.

Some contentious issues, such as the administration's travel ban barring citizens of seven nations from entering the U.S., don't appear to have come up at the meeting. While the order has been temporarily halted and is being reviewed by a federal appeals court, the Jan. 27 order rocked the industry. Huge demonstrations took place at many big airports opposing the order. Airlines were caught unawares and struggled to comply.

Another hot topic that was barely broached was the disagreement about the growth of Middle Eastern carriers into the U.S. and whether they are infringing on air treaties. President Trump alluded to it, however.

"I know you're under pressure from a lot of foreign elements and foreign carriers," he said. "I've been hearing that a little bit. At the same time, we want to make life good for them also. They come with big investments. In many cases investments are made by their governments, but they are still big investments."

American, Delta, and United are pressing the Trump administration to review their two-year-old trade dispute with three state-owned Middle Eastern carriers that the U.S. companies allege have received billions of dollars in government subsidies. Emirates Airline, Etihad Airways and Qatar Airways deny they are subsidized. The three U.S. carriers are urging Washington to determine that the subsidies violate what is known as the "open skies" treaties the U.S. has with the United Arab Emirates and Qatar.

But four other U.S. carriers support the 120 existing open-skies treaties and oppose penalizing the Gulf airlines. They recently wrote Secretary of State Rex Tillerson, saying the existing agreements promote competition and help U.S. carriers build international networks.

Meanwhile, airline unions are speaking out against Norwegian Air Shuttle ASA, a low-cost carrier awarded a permit in December by the Obama administration to operate to the U.S. from a subsidiary in Ireland. Unions say the Irish base allows Norwegian to hire pilots and other employees on less generous terms than they would receive under Norway's strict labor laws.

The airline denies that. Norwegian says it is hiring U.S.-based pilots and flight attendants to support its expansion and expected to have 1,000 U.S.-based staff by the end of the year.

"We are pleased that the president understands the value foreign airlines like Norwegian is contributing to the American economy," said a spokesman.

--Andy Pasztor and Doug Cameron contributed to this article.

Write to Carol E. Lee at carol.lee@wsj.com and Susan Carey at susan.carey@wsj.com

(END) Dow Jones Newswires

February 09, 2017 14:00 ET (19:00 GMT)

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