But Airline Group Also Expresses Concerns

The Air Transport Association of America (ATA), the industry trade organization for many US airlines, issued the following statement Wednesday in response to the release of the Federal Aviation Administration (FAA) Reauthorization Bill and FAA Cost Allocation Study on the reauthorization of the Airport and Airway Trust Fund (AATF).

ANN presents the statement, unedited, below:

"While we applaud this proposal as a good step forward in advancing the reauthorization debate and welcome its recognition of the inequity of forcing airlines and their customers to subsidize other system users, we have deep concerns over a number of elements of the proposal," said ATA President and CEO James C. May.              

May (shown at right) offered the following observations:  

Support for Rational Funding

ATA supports the FAA movement to correct the unfairness of the current funding system by proposing more reliable, predictable and equitable funding going forward. While more work remains to fine-tune the allocation process, we see the FAA endorsement of a cost-based funding mechanism for both airlines and other air traffic control (ATC) system users as a step in the right direction. In addition, the proposal accommodates the general aviation community’s desire to pay their fair share of the cost for using the system through a use-based, calibrated fuel tax.

Elimination of Corporate Jet Subsidy

ATA is pleased that FAA has been able to quantify the subsidy that airline passengers and shippers have been forced to pay to cover the cost of all other users of the ATC system. Today, airlines contribute 94 percent of revenue into the Trust Fund but, according to the new FAA Cost Allocation Study, airlines drive less than 73 percent of ATC costs. While that new calculation continues to reflect a subsidy we will be addressing, it is a major step forward.

Establishment of Bonding Authority

ATA also is pleased that the administration is providing FAA with $5 billion in borrowing authority -- and not relying on new taxes or fees -- to build a 21st century ATC system. (Editor's Note: this assertion appears to contradict the FAA's earlier statement that its funding proposal "relies on a combination of user-fees, taxes and a federal government contribution to support the development of a new, satellite-based, air traffic control system.") This will provide FAA with the funding needed to move from a ground-based, human-centric ATC system, to a satellite-based system that will allow us to meet future demand.

Confusion over Congested Airspace versus Congested Airports

The administration’s proposal includes a fee for operating in the "most congested" airspace, but improperly pegs that fee to large airports, and that concerns us. By tying the fee to the airport, the FAA does not address the real congestion issue in surrounding airspace. For example, 20 percent of en route traffic in the New York area comes from general aviation traffic that does not use large airports in the area and no rationale exists for the continuation of a subsidy.

Use of Aircraft Weight as an "Artificial Proxy"

The proposal’s use of weight as a factor in assessing cost-based funding is of enormous concern to ATA member airlines. FAA’s own study found the number of onboard passengers, aircraft weight and size were irrelevant to the actual costs of using the ATC system. Further, the Government Accountability Office has determined that incorporating weight into a cost-based formula weakens the link between use and costs. Heavier planes would be required to contribute more for traveling the same distance, even though they impose no greater costs. This old-school thinking has no place in a modern, fair funding system.

Failure to Meaningfully Reform Airport Funding

The administration also missed the mark on its airport funding proposals. For one, the Airport Improvement Program (AIP) includes $1 billion in subsidies for non-commercial airports paid by commercial airline passengers. Worse still, the administration is proposing to raise passenger "head taxes" in the form of the passenger facility charge – this federally approved, local ticket tax could cost passengers an extra $2 billion annually, without any meaningful airline or FAA controls. In essence this will provide more money on top of the approximately $14 billion already being spent annually on our nation’s airports. This is more about meeting airport wants rather than airport needs.

"ATA views the administration’s proposal as a starting point for Congress to draw upon as it begins its consideration of the crucial future course of our nation’s air transport system," said May. "We look forward to working with Congress and the administration to build a 21st century ATC system supported by equitable, sustainable funding." 

ATA airline members transport more than 90 percent of all US airline passenger and cargo traffic.

FMI: www.airlines.org, www.faa.org