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A battle is brewing in Congress over the billions of dollars in funding needed to expand the aviation infrastructure fast enough to keep pace with projected demand. The once-a-decade debate over Federal Aviation Administration funding needs to be resolved by Sept. 30, in time for the start of the federal government's new fiscal year.
Some industry observers are concerned that the complexity of the funding issues--and a lack of consensus on who should pay for more than $65 billion in improvements to the nation's air traffic control system through 2011--could jeopardize that timetable.
For various constituencies, the funding bill represents the ideal time to lobby for changes on fees and funding. Airports across the country are trying to gain approval to increase passenger facilities charges, currently capped at $4.50 per segment, to as much as $7 per segment. Air traffic controllers are lobbying for more resources and higher pay. Commercial airlines are trying to convince lawmakers to dramatically transform the basis of funding from fuel and other taxes to more of a user tax that would more equitably charge both general aviation and commercial flights.
Today, commercial aviation is "paying for 94 percent of the services that FAA provides and using 70 percent of it," said an Air Transport Association spokesperson, citing an FAA cost allocation study. "General aviation is using 16 percent of the services, but paying for only 6 percent. We want a user fee system to pay for what you use."
The National Business Aviation Association disputes such claims. According to a statement this month by NBAA president and CEO Ed Bolen, the association "supports aviation system modernization. What's really at the heart of the airlines' finger-pointing is their long-running attempt to shift billions [of dollars] of their costs onto others in hopes of securing a tax break that will benefit no one but the airlines themselves--certainly not passengers and not system modernization."
FAA last February introduced its Next Generation Air Transportation System Financing Reform Act to "replace the decades-old system of collecting ticket taxes with a cost-based, stable and reliable funding program that relies on a combination of user fees, taxes and a federal government contribution to support the development of a new satellite-based" ATC system.
Lobbying began in earnest this summer and is now reaching corporate travel managers and even travelers. Airlines this month began focusing on ATC concerns in the opinion columns of in-flight magazines published by several major carriers.
American Airlines CEO Gerard Arpey wrote in his AmericanWaycolumn that, "The system by which ATC activities are funded is just as outdated as ATC's technology. We support a common-sense approach that would allocate costs to all ATC system users in proportion to the services they consume. ... Unfortunately, the business-aviation community--the companies and individuals operating private jets--are vigorously opposing this idea, because under the current system, they are getting a nearly free ride."
At ATA's request, United Airlines CEO Glenn Tilton sent e-mails to 50,000 members of the carrier's frequent flyer program advising them of the stakes. In addition, ATA has delivered a "tool kit" to help member airlines explain the issues to corporate accounts. Much of this can be found on its www.smartskies.orgweb site.
Delays cost travelers $10 billion a year in lost time and cost airlines $6 billion for a total of $16 billion, according to the ATA spokesperson. FAA projects delays over the next decade will increase 64 percent. "We can't allow that to happen," he said.
The Senate Finance Committee on Thursday is slated to hold the first of two hearings on S. 1300 with testimony from FAA and other government officials. Airlines and general aviation officials are scheduled to testify at a second hearing on July 19, before the committee revises the bill and sends it to the full Senate this month or in August.
Meanwhile in the House of Representatives, the Ways and Means Committee has yet to schedule hearings on its version of the funding bill. Provided both bills are approved during the legislative session, a conference committee is expected to iron out the differences before legislation is sent to the president.
"There is great concern over timing," said ATA's spokesperson.
"The number one concern is whether it's going to get done," added Business Travel Coalition founder Kevin Mitchell. Despite the "right intensions" of committee members to add their concerns to the funding authorization bills, such additions only serve to sidetrack the main issue, which is funding modernization quickly, Mitchell said.
BTC endorsed the Senate version of the funding bill and its plan to replace fuel taxes with a "$25 per plane departure modernization fee for all turbine-powered aircraft. This approach recognizes the need for equity among current users of the system; anticipates the coming explosion in the use of very light jets; and wisely exempts piston and turboprop aircraft operating under visual flight rules which often act as a catalyst for economic development in rural areas."
FAA chief Marion Blakey also is urging rapid action. In a speech Wednesday, Blakey said, "If we're unable to have a financing reform bill in place by Sept. 30 when the current set of taxes expire, the delays and the missed connections and the headlines are only going to get worse--much worse."
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