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Aircraft User Fees

by Jeremy Cox 1. May 2007 00:00
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There is a snarling knife and gun fight brewing, and if you haven't heard about, it is time for you to understand the issue that will be brought to head on September 30th, this year. The fight is about how the Federal Aviation Administration (FAA) are to be funded, a reasonable issue that is being perverted into a nasty argument by the cut-throat and inept management of the ailing legacy airline companies who have smelt blood and see expiration this September of the Congressional authorization and the mechanism of taxes that currently fund the FAA as another way of bailing water out of their sinking corporate vessels.

You may find that vernacular in this article is scathing and possibly even unkind, but first you must understand the argument before you pass judgement. The Aircraft Owners and Pilots Association (AOPA) and the National Business Aviation Association (NBAA) along with numerous other representatives of the General Aviation communities have very eloquently called the onerous claims of the airline companies mythical. Over the past five or more years, the airlines have received a $5 billion bailout, a $10 billion loan guarantee program, war risk insurance, and an unconscionable shift of some of their badly funded pension obligations to the federal governments Pension Benefit Guaranty Corporation, which will ultimately come out of the pockets of the US taxpayer; you and me. Even though several of the airline behemoths appear to be recovering from their mismanaged lot partly as a result of the aforementioned government intervention, but mainly by the shear volume of passengers that have a need to travel by air, they are seeking to offload billions more of their operating expenses and debts by promoting the implementation of a nationwide user fee program.

There are 15,000 business aircraft registered in the United States of America. About 3 percent of these aircraft are flown by fortune 500 companies. According to the NBAA, civil aviation contributed over $900 billion and 11 million jobs to the U.S. economy in 2000, at least 9 percent of the total U.S. gross domestic product. Of this contribution, one dollar in nine is contributed by General Aviation (GA.) Of the GA economic contribution, 80 percent is generated by Business Aviation. Fully 85 percent of Business Aircraft operators are small to mid-size companies using only one aircraft. Companies that own a Business Aircraft rarely use it as an exclusive travel option. Instead, trips are analyzed on a case-by-case basis to determine the best way to accomplish a given mission. This is why companies that use Business Aviation spend more than $11 billion on commercial airline tickets each year.

This nation's air transportation system consists of approximately 5,300 public-use airports. The commercial airlines serve about 550 of these facilities - fewer than 11 percent. The busiest airports handle the majority of all airline passengers in this country. As a result, business aviation operations at our nation's 20 busiest hub airports account for only 3.5 percent of the total activity at these 20 facilities. GA has always contributed to the aviation trust fund, the present system of funding the FAA, through fuel taxes that are easily collected and efficiently administered. The amount of fuel purchased has a strong correlation to the time, distance and facilities used by GA aircraft. The airlines are currently exempt from paying a fuel tax.

To properly research this subject I have read the Budget Summary Reports for 2005, 2006 and 2007 (see an article that I wrote at this site, last year - click here for the article) All three documents do make very interesting reading indeed even for a layman like me. In 2005 the FAA requested and received $13.97 Billion US Dollars (yes, that's $13,970,000,000.00 US Dollars.) Last year's budget is 0.6% less than 2005, at $13.78 Billion. The budget requested for this year is lower again at $13.749 Billion. Since the FAA is being run "…to operate more like a business…" (Its own words) Only about 20% of their total budget (approximately $2.73 Billion in 2005) has to come from the coffers of the Federal Governments tax base. The FAA generates its own income, here is my summary of their statement of income report from last year:

INCOME = $11.24 Billion approximately
Passenger Ticket Tax
Passenger Flight Segment Tax
Waybill Tax
Fuel Tax
International Departure/Arrival Tax
Rural Airport Tax
Frequent Flyer Tax
Trust Fund Interest (FAA's Saving Account)
Sale of Facilities and Equipment
Sale of Research/Engineering/Devlpmt, Svcs.
48.75%
18.70%
04.15%
07.29%
13.97%
00.73%
01.39%
03.67%
01.20%
00.14%

TOTAL 99.99%

As you can see, the assertions of the airlines are not based upon fact. They in-fact are not paying a whole heck of a lot of the money out of their pockets that is needed by the FAA, while the lions share is being paid by their passengers. The current funding system works, but it would be fairer to go to an all-fuel tax funded system but the airlines need to be paying their share of a fuel tax. If user fees are implemented, GA will be lumbered with the lion's share, which is not fair or even ethical. This is my opinion and hopefully this is now your opinion too after reading this article. If like me, you now feel that the voice of GA must be heard above the whining lamentations of the airlines, please contact your local elected officials that hold office in the U.S. Senate and U.S. Congress. This is very important, so please act now. The longer that we delay in standing up for the truth to be told to the general public (there is no doubt that their opinion is subversively being won by the airlines), the closer we are drawn towards the flames, soon to be burnt to a crisp!

This is an important issue - If you have ever thought about voicing your opinion now is the time.  What are your thoughts and opinions regarding the issue of User Fees? Please make them known here. Any input that you care to make will be of great interest to all of the readers here at Globalair.com. So please don't be bashful and go ahead and write your comments and suggestions here. Please don't forget that whatever you write here, can be seen publicly by everyone that visits this page, so please be funny, be inspired, but most importantly of all, please be nice. See you next month when we tackle another aviation related topic.
 

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Jeremy Cox



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