Sunday, February 07, 2016

Businesses, pilots worried about economic affect of air-traffic controller privatization

Terry Phillips works on a airplane on Wednesday, Feb. 3, 2016, at Attitude Aviation at Huntington Tri-State Airport.

HUNTINGTON - A proposal to strip the Federal Aviation Administration of its power over the country's air-traffic control system and transfer those duties to a private entity has members of some aviation organizations concerned about the economic effect such a measure would have on businesses, noncommercial airports and rural communities.

Advocates of the proposal claim a private nonprofit or for-profit group controlling air traffic would generate a revenue stream to use for much-needed equipment upgrades. Those who oppose the plan say it would be disastrous for local economies, general aviation and for the companies who use small planes to conduct business on even a minor scale.

The proposal was first brought to the forefront in June 2015 by U.S. Rep. Bill Shuster, R-Pa., during a speech to the Aeroclub of Washington. CNN reported Shuster told the group the country's current air-traffic control, or ATC, system uses "technology from the last century" and can't handle any more growth in the airline industry.

Then, last Wednesday, Shuster introduced legislation in the House that would shift day-to-day air traffic operations from the FAA to a private, non-profit organization and transition from a radar-based traffic control system to one based on satellite technology. A board representing aviation system users would govern the new, federally chartered air traffic control corporation. The legislation calls for completing the transfer of responsibilities within three years.

J.D. Smoot is president of the Tri-State Pilots Association, but was not speaking on its behalf. He was instead speaking as a private pilot who flies general aviation and said he would be greatly affected by user fees implemented for each takeoff and landing performed at an airport with a control tower, using air-traffic control services or receiving a preflight weather briefing that could be put in place if the ATC is privatized.

"Both iterations of the FAA re-authorization as well as plans to privatize ATC that I have read do not include user fees for private aircraft yet," he said "I personally see this push for privatization as the camel's nose under the tent-type of situation. The airlines provide the lion's share of revenue and tax from which ATC services are funded. It's not too far-fetched to see airlines trying to transfer these costs to private aviation through user fees for general aviation in an effort to boost their bottom line."

Jarrod Golice, right, and Dave Crum work on an airplane on Wednesday, Feb. 3, 2016, at Attitude Aviation at Huntington Tri-State Airport.

During a conference call with The Herald-Dispatch, three aviation industry employees outlined why ATC privatization is not good for smaller airports, rural communities or businesses.

Jerry Brienza, general manager of the Huntington Tri-State Airport and president of the West Virginia Airport Managers Association, said a user-fee system is already in place through the aviation fuel tax and that money is passed on to the FAA to pay for ATCs and fund airport improvement projects.

"A third-party would have total authority to implement their own fees - whether for-profit or nonprofit - and would be generating their own taxes, which is problematic for airports like (Huntington)," Brienza said. "I'm not 100 percent opposed to some sort of a change in the future, but I haven't seen the facts yet that clearly state this is going to be a safer and more effective way to handle business. I have read every document about privatization, and there is no documentation that says this is the route we should be taking. I would caution Congress not to make any knee-jerk reactions and create an industry that is not as effective or safe as the one we currently have."

In Huntington, fuel purchased at the airport for general and business aviation is its No. 1 revenue generator, Brienza said. General and business aviation, however, are also very volatile.

"Fuel prices go up just a little bit, activity decreases a lot," Brienza said. "It takes a long time to get that activity back up. People sold planes two or three years ago when fuel prices were out of control and they could no longer afford to fly. Prices have dropped and those people aren't coming back. It's a domino effect. We not only make money on the fuel they purchase, but from hanger rentals and landing fees. If this activity decreases, so does our revenue. This is an industry that is very sensitive toward any increased costs. The only way to pay for a third-party system would be to either increase fuel tax or implement service fees. I don't see any positives until we come up with a plan, and I don't think there is a plan in place."

Selena Shilad, executive director of the Alliance for Aviation Across America, said during the conference call a wide-scale survey conducted by PricewaterhouseCoopers called "Contribution of General Aviation to the U.S. Economy" shows general aviation contributes $1 billion to West Virginia's economy annually through the state's 17 general aviation airports, 1,806 pilots and 855 general aviation aircraft.

The study also shows general aviation supports 5,300 jobs in West Virginia resulting in $256 million in income.

According to the West Virginia Department of Transportation Aeronautics Commission, the state is also home to 21 Aerospace industry companies, 11 repair stations, one FAA-approved pilot school, 411 student pilots, 265 flight instructors and 26 fixed-based operators, or FBOs.

Since whether ATC is privatized is a decision that Congress will make, opponents of the proposal have been busy writing to their elected officials in Washington. Huntington Mayor Steve Williams wrote a letter to U.S. Send. Joe Manchin, D-West Virginia, and Shelley Moore Capito, R-West Virginia, urging their support for business and general aviation, saying both are essential to the success of companies and communities of all sizes.

"Across the country, individuals, entrepreneurs, use general aviation to fly from community airports, reach multiple plants and customers in a day, transport tools and supplies and reach far-off markets that are often otherwise inaccessible," Williams wrote. "These aircraft and these airports also connect rural communities with vital services such as medical care, emergency medical transport, fighting forest fires, law enforcement and search and rescue."

Williams ended the letter by asking the Senators not to cede authority of ATC to a private entity.

Dan Hubbard is senior vice president for communications at the Washington, D.C-based National Business Aviation Association, or NBAA, that provides more than 100 products and services to its 10,500 member companies. He said during the conference call NBAA members of all sizes from a variety of industries have one thing in common: they rely on the use of their own airplane to meet at least some of their business transportation needs.

"Sometimes they need an airplane to get people to different facilities, sometimes they need it to move parts to fix machinery, sometimes they use it to reach three of four destinations in a day in particular out of small towns and rural areas to get to the bigger markets where the business opportunities are," he said. "Our members don't make their money by flying the airplane; it just helps them do their business."

A common misconception, Hubbard said, is that it is only large companies that need and use airplanes. A majority of NBAA members are small and mid-size companies employing 100 or fewer people in small towns that are often the towns' employment anchors, he said.

"Small airport access is really important because if it is restricted or goes away, a company may have to make the choice to leave that small town and move to a larger city so they can continue using their plane for business," he said. "These companies don't want to do that because the smaller airports are much easier for them to use because they don't have the congestion characteristic of the airline hubs.

Attitude Aviation is located at 1433 Airport Road in Huntington.

Of the 5,000-plus airports in America, about 500 are served by major airlines, Hubbard said. While most big airline executives have been ardent supporters of privatization and contend it will lead to faster equipment upgrades and more efficient flight patterns, Delta Airlines conducted a study that shows ticket prices could increase by as much as 29 percent as a result of privatization, money that would be passed on to create the private ATC organization.

Economics of general aviation

A comprehensive study by PricewaterhouseCoopers concluded that employment from general aviation totaled 1.1 million jobs in 2013.

The national total annual economic contribution of general aviation is $219 billion, with additional economic affects from the 2,200 charter flight companies, 4,144 repair stations and 569 flight schools operating 4,653 aircraft. There are 3,330 fixed based operators, 18 "fractional" ownership providers and 261,806 airframe and power plant specialists.

Nearly 600,000 pilots a vast majority - fly general aviation aircraft.

A 2015 Harris Poll shows about 4 out of 5 business aviation flights are into an airport with infrequent or no scheduled airline service, or into a secondary airport. - About 2 in 5 flights involve multi-leg trips to more than one destination.

According to the same study, passengers of these flights spend nearly two-thirds of their time on the aircraft on work-related tasks.

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