Calls to replace the
aviation fuel tax with new user fees to fund improvements to U.S.
airspace management are not supported by a business case, said
Cessna Aircraft Company Chairman, President and Chief Executive
Officer Jack J. Pelton in a speech to government and industry
officials at the Washington Aero Club. Pelton also serves as
chairman of the General Aviation Manufacturers Association.
In remarks prepared for the address, Pelton outlined five myths
about Federal Aviation Administration reauthorization:
- Myth one: The mechanisms for funding the FAA
are not working;
- Myth two: A funding overhaul is needed to pay
for modernization, and to cover revenue shortfalls from the
declining commercial ticket tax;
- Myth three: General aviation does not pay its
share for its use of the National Air Transportation System;
- Myth four: User fees will provide stable and
predictable funding for the FAA; and
- Myth five: Very Light Jets coming to market
will place a new burden on the air transportation system.
"These myths have crept into the public discussion about FAA
funding, and they have gained undeserved credibility," Pelton said.
"I am a businessman, not a policymaker, and FAA officials often
speak of the need to run the FAA more like a business. So, I
propose we address some basic business questions before we
implement more policies or procedures that could potentially add
cost or make the system more burdensome than it already is. The
questions we need answered are: Where does our aviation system
stand today? Where is the market headed? What are the requirements
we will have to meet?"
Pelton said an evaluation of the current funding system shows
little need for new revenue streams - funding for the FAA has
increased, not decreased, in the last decade. In addition, the FAA
has not identified how the agency would use an increase in
funds.
"The FAA has said extra funding is needed to modernize the
system, but with little details on what that means," Pelton
said.
"How would a business
evaluate future capital investment needs? We would conduct studies
to determine where the market is going, what are the must-haves,
what are the nice-to-haves, and so forth, to meet those challenges.
Once we had finished sizing the needs, only then would we consider
the best ways to provide the funding. Then we would ask what
expenditures can be reduced and what new revenue sources can we tap
or develop."
The FAA has not provided answers to these foundational
questions, he said.
"I would have a tough time getting funding to develop a new
airplane if I could not lay out what we wanted to build, why, what
it would cost, and how long it would take," he added.
Pelton said he is not suggesting business aviation should not
help pay for the air transportation system. Business aviation does
pay to use the system through a fuel tax, which he said should
continue because it is a non-bureaucratic way to contribute.
"General aviation represents only about 3 percent of all
operations at our nation's 20 busiest and costliest airports,"
Pelton said.
"The air transportation system was built to accommodate airline
operations - in particular, to accommodate peak traffic at airline
hubs. The principle drivers of the costs of the system are the
infrastructure and support networks to handle those operations at
hub airports."
As an example, Pelton said, Ronald Reagan National Airport in
Washington was closed to general aviation traffic for four years,
yet the costs of operating the airport did not decrease.
As to the suggestion that the FAA go to a user-fee system,
Pelton said, the track record of aviation user-fee systems in
Europe and Canada "tells us that the mechanism becomes very
unstable in economic downturns. As a result, government bailouts
are required, or fees must be increased just when the industry is
least able to afford the spike in costs."
Finally, he said, the argument that the new, very light jets
(VLJs) will take off and overwhelm the nation's air traffic system,
is completely unrealistic. "This is a topic I know rather well,"
Pelton said of the new VLJ aircraft.
"Even if the most optimistic predictions about VLJs turn out to
be true, we will not see large numbers entering the system over the
next five years. That means we have time to see how this market
truly develops," he told the aviation audience.
Pelton proposed continued investment in the National Air
Transportation System, with a higher contribution to the FAA from
the General Fund; modernization with satellite and other
technologies to increase efficiency; keeping the current revenue
structure, including general aviation fuel taxes; rejecting user
fees for general aviation; and ensuring continuing congressional
authority.
He concluded by saying, "I'm confident that by working together
on this platform we can help affect policy decisions that are more
enlightened, more realistic, more equitable and more cost
effective. And I am confident that these policy decisions will
result in a goal we all want to achieve - a strong, sustainable
aviation system for our nation."