Speech Before ACI-NA Seems To Point In That Direction

Editor's Note: Below is an unedited excerpt taken from a speech given Tuesday by FAA Administrator Marion Blakey at the Airports Council International - North America conference in Reno, NV.

Despite an apparent victory by general aviation interests this year over the tumultuous issue of user fees to support FAA funding -- and admonishments from Florida Congressman John L. Mica and North Carolina Representative Robin Hayes that Blakey has since "gotten the message" that user fees would be highly detrimental to GA -- Blakey's words Tuesday sure sound (at least to us) as though she is still looking towards a fee-based funding structure, where general aviation pilots would be asked to pay more for services that are now funded, and fairly so, through taxes on avgas and Jet-A.

Excerpt From FAA Administrator Marion Blakey's Speech

Bottom line: We, the FAA, need to account for the whole financial picture for airports as we develop our proposals for AIP reauthorization — and we will. We also have heard your desire for more flexibility in how you spend federal funds. We’re looking carefully at how to accomplish that goal. Next year’s reauthorization comes at a critical time, and I firmly believe that we need to be bold in order to meet the needs of the Next Generation Air Transportation System.

Let me now offer a few observations about the state of the FAA, and how it affects you. But I need to spend a moment to tell you how we got where we are.

The first order of the day was direction from Congress, the taxpayer — you — to the FAA and it is some pretty clear language: start to operate more like a bottom-line business. We contracted out our automated flight service stations, saving $2.1 billion over 13 years. We've consolidated administrative, staff and support functions to save another $400 million. We've tied pay to performance wherever possible, including a new controller contract that saves nearly $2 billion over five years while giving us new managerial flexibility to safely manage the system.

We also created a reliable cost-accounting system and made other reform that led GAO to take us off its “High Risk” list for financial management. In many ways, we're mirroring the same type of fiscal restraint that you've been showing. And that's the way it should be.

I'm proud of the fact that our major capital programs are nearly meeting the stringent goals we set out in the Flight Plan. We wanted them to come within ten percent of being under budget and on time. And wouldn't you know, we're hitting 100 percent for the former and 97 percent for the latter.

Responsible government begins with fiscal responsibility, which is what we're doing more and more and more.

And with good reason. As you know, the excise taxes that fuel our operating budget are set to expire in the Fall of ‘07. Right now, the formula for the taxes is based on the price of a ticket. As prices rise and fall, so does our income. That makes it difficult to plan for long-term capital investments. I certainly don't need to talk to this group about the challenges that creates. So with the emergence of low-cost carriers and the change in the fleet mix, our income dips, but our workload goes up. More passengers, more smaller planes, lower ticket prices, lower income. What's wrong with this picture? And what's worst of all is that we know that the FAA is trying to handle all of this with a revenue stream that's in no way related to the actual cost of providing the service. I've said in the past that our revenues might as well be tied to the price of a gallon of milk. That one occasionally draws a few chuckles, but I'm not kidding, and the joke is on all of us.

Bottom line: we need a stable revenue stream. The changing face of aviation brings with it the need to modernize and we can't do that without fundamental reforms of the current financing system. If traffic grows as expected, we project that by 2014 delays in the U.S. will increase 62 percent over 2004 levels. In fact, if the weather is the same in 2014 as it was in 2004, 29 days — almost a month — in 2014 will experience more delay than on the worst day in 2004. These projected delays will cost the airlines at least $2 billion in extra costs and will seriously erode profits needed for future fleet and infrastructure expansions.

The situation is even more perplexing for the passenger. Because of missed connections, passenger delays could conceivably double by 2014. That's just not acceptable.

So we're not going to let that happen. We're addressing the need to modernize with NextGen, the drive to create the next generation air transportation system. I don't have to tell you about the ramifications for the failure to plan now for what's coming down the road. A couple of months ago, I picked up the Wall Street Journal and saw four different ads for VLJs in the first nine pages of section one. The need to modernize is upon us, so we better get moving.

I think we all have to be very clear. NextGen isn't only an air traffic transformation. It's the integration of air traffic with airport requirement, especially in terms of infrastructure and security. It's curb to curb. That's why we have an integrated product team for airports. And that's why we have an integrated product team for security. All working together under the umbrella of our Joint Program Development Office, which is responsible for designing and launching the next generation system.

In closing, let me point out that as part of our reauthorization exercise, we are looking at whether airports and state aviation officials can play an expanded role in moving to the next generation system. And we are looking at how AIP and PFC investments can be used to assist you to prepare in being part of this important transition.

We've asked for your input in the past and we'll continue to do so. I've said on many, many occasions that aviation is a lifeline. The truth of the matter is that airports are what make that lifeline possible. You've done an outstanding job thus far, and as we move forward to modernize, as we lay the groundwork for the future, we're creating a foundation for success. I, for one, am glad to work shoulder to shoulder with you to make it happen. Thank you.

FMI: www.faa.gov, www.aci-na.org