By Rose Jacobs
This July, when Washington was absorbed in the drama of whether Congress and the White House would reach agreement over raising the US debt ceiling, the policy team at the National Business Aviation Association began to hear unsettling rumours.
It seemed the idea of charging aircraft operators fees for their use of federally regulated airspace had resurfaced – a troubling development for the biggest US business aviation lobby group. The NBAA and many of its peers advocate sticking with a long-running policy of funding the system through fuel taxes. The appeal of the method is two-pronged, they argue: it is efficient, as charging fuel tax requires little bureaucracy, and it is fair, as the money paid through fuel taxes is directly related to an operator’s use of the system.
Add to that the environmental benefits, as the tax discourages meandering flight paths and encourages investment in technology to improve planes’ fuel efficiency, and the argument seems airtight.
“Congress has repeatedly looked into this issue,” says Dan Hubbard, head of communications for the NBAA. “They have held committee hearings on it. They have reviewed studies about it. They have looked at possible legistlative proposals on it. And over the course of several years, when they have proposed long-term FAA [Federal Aviation Authority] reauthorisation legislation they have resisted using fees.”
But to the aviation lobby’s dismay, that resistance crumbled this summer. “As some in Congress were saying, ‘we’ve got to have revenue-raisers in order to help erase the deficit,’ and others were saying, ‘we don’t want any new taxes at all,’ what became discussed over time was the idea of user fees,” says Mr Hubbard. “[They] said ‘well, maybe a fee isn’t really a tax.’ ”
Whatever the reasoning, when President Barack Obama’s deficit reduction plan was published lin September, it included a proposal to introduce a $100 per flight fee for operators flying in controlled airspace. Revenue raised from the fuel tax paid by general aviation operators “does not cover their fair-share use of air traffic services,” says the White House, citing the example of a big commercial jet that would pay $1,300 to $2,000 in taxes for a flight from Los Angeles to San Francisco, compared with the approximately $60 a corporate jet would pay.
Should the measure pass – an outcome far from certain – it would be the biggest policy-driven blow that US business aviation has seen in recent years. “We can’t ignore that this administration is using general aviation as a political tool,” says one industry expert.
Nor are user fees the only cloud on the regulatory horizon. Washington has yet to determine a long-term funding plan for the FAA; it is dawdling over concerns that new wireless broadband technology interferes with aviators’ navigation systems; and it is moving to shift the cost of aviation’s national security apparatus to users of the system rather than the general public.
All of that means operators in the world’s biggest market for general aviation face added uncertainty over costs and safety.
On FAA funding, a small hurdle was recently overcome with the passage of a bill extending federal highway and aviation funding through the start of 2012. It may not sound a lot, but in the context of a partial shutdown of the FAA in August because of battles over funding, it is a victory. “We would like to see that final, multi-year bill,” says Mr Hubbard. “That said, boy, you need them to pass that final extension so that people can go to work.”
The challenge remains, however, of modernising the infrastructure – a long-term project without the comfort of a long-term budget. This was the 21st time the government passed short-term extensions since the FAA’s last budget expired in 2007.
Meanwhile, the industry is waiting for another government agency, the Federal Communications Commission, to decide what to do about the telecoms company LightSquared, which aims to build a national high-speed wireless network with technology that critics argue interferes with global positioning system navigation equipment used by pilots and road-users alike.
The FCC is expected to complete its interference tests in November, but no deadline has been set for a decision about whether the company can push ahead, and under what circumstances. If it does, aviators and other groups are demanding the company pay for any necessary revamping of GPS technology.
Will all these concerns curb private flying? The NBAA hesitates to make predictions about the scale of the impact of user fees, arguing there is no precedent from which to work. But speaking anecdotally, Mr Hubbard cites the worries of one member, the owner of a small recycling operation in upstate New York, over the administrative hassle. “He told us, ‘We don’t have a whole accounting division with legions of people who can go through this all day.
“ ‘We have one person in my office who opens all the mail and she’s also the accountant and she’s also the office manager and she wears a couple of other hats as well. This is one more burden. Why do we need that when this other system has worked so well and for so long?’ ”
http://www.ft.com
It seemed the idea of charging aircraft operators fees for their use of federally regulated airspace had resurfaced – a troubling development for the biggest US business aviation lobby group. The NBAA and many of its peers advocate sticking with a long-running policy of funding the system through fuel taxes. The appeal of the method is two-pronged, they argue: it is efficient, as charging fuel tax requires little bureaucracy, and it is fair, as the money paid through fuel taxes is directly related to an operator’s use of the system.
Add to that the environmental benefits, as the tax discourages meandering flight paths and encourages investment in technology to improve planes’ fuel efficiency, and the argument seems airtight.
“Congress has repeatedly looked into this issue,” says Dan Hubbard, head of communications for the NBAA. “They have held committee hearings on it. They have reviewed studies about it. They have looked at possible legistlative proposals on it. And over the course of several years, when they have proposed long-term FAA [Federal Aviation Authority] reauthorisation legislation they have resisted using fees.”
But to the aviation lobby’s dismay, that resistance crumbled this summer. “As some in Congress were saying, ‘we’ve got to have revenue-raisers in order to help erase the deficit,’ and others were saying, ‘we don’t want any new taxes at all,’ what became discussed over time was the idea of user fees,” says Mr Hubbard. “[They] said ‘well, maybe a fee isn’t really a tax.’ ”
Whatever the reasoning, when President Barack Obama’s deficit reduction plan was published lin September, it included a proposal to introduce a $100 per flight fee for operators flying in controlled airspace. Revenue raised from the fuel tax paid by general aviation operators “does not cover their fair-share use of air traffic services,” says the White House, citing the example of a big commercial jet that would pay $1,300 to $2,000 in taxes for a flight from Los Angeles to San Francisco, compared with the approximately $60 a corporate jet would pay.
Should the measure pass – an outcome far from certain – it would be the biggest policy-driven blow that US business aviation has seen in recent years. “We can’t ignore that this administration is using general aviation as a political tool,” says one industry expert.
Nor are user fees the only cloud on the regulatory horizon. Washington has yet to determine a long-term funding plan for the FAA; it is dawdling over concerns that new wireless broadband technology interferes with aviators’ navigation systems; and it is moving to shift the cost of aviation’s national security apparatus to users of the system rather than the general public.
All of that means operators in the world’s biggest market for general aviation face added uncertainty over costs and safety.
On FAA funding, a small hurdle was recently overcome with the passage of a bill extending federal highway and aviation funding through the start of 2012. It may not sound a lot, but in the context of a partial shutdown of the FAA in August because of battles over funding, it is a victory. “We would like to see that final, multi-year bill,” says Mr Hubbard. “That said, boy, you need them to pass that final extension so that people can go to work.”
The challenge remains, however, of modernising the infrastructure – a long-term project without the comfort of a long-term budget. This was the 21st time the government passed short-term extensions since the FAA’s last budget expired in 2007.
Meanwhile, the industry is waiting for another government agency, the Federal Communications Commission, to decide what to do about the telecoms company LightSquared, which aims to build a national high-speed wireless network with technology that critics argue interferes with global positioning system navigation equipment used by pilots and road-users alike.
The FCC is expected to complete its interference tests in November, but no deadline has been set for a decision about whether the company can push ahead, and under what circumstances. If it does, aviators and other groups are demanding the company pay for any necessary revamping of GPS technology.
Will all these concerns curb private flying? The NBAA hesitates to make predictions about the scale of the impact of user fees, arguing there is no precedent from which to work. But speaking anecdotally, Mr Hubbard cites the worries of one member, the owner of a small recycling operation in upstate New York, over the administrative hassle. “He told us, ‘We don’t have a whole accounting division with legions of people who can go through this all day.
“ ‘We have one person in my office who opens all the mail and she’s also the accountant and she’s also the office manager and she wears a couple of other hats as well. This is one more burden. Why do we need that when this other system has worked so well and for so long?’ ”
http://www.ft.com
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