Airlines Unveil Statement of Principles to Fund System Transformation

ANN Note: ANN is participating in a number of conference calls and interviews throughout the day now that the cards finally appear to be on the table, as far as the airlines are concerned.

Preliminary analysis does not bode well for the General Aviation community in that the ATA proposal both seems to be a power grab over what ATA claims is 'commercial' airspace as well as an expense reduction program that would transfer 1.5-2 billion dollars of annual costs to the GA community for a system that is admittedly custom-designed to cater to the airline industry.

ATA claims that the services provided to the GA community are just as expensive as those provided to the airlines... described simply as a "a blip is a blip." ANN will be reporting on these issues aggressively and will keep you updated. -- Jim Campbell, Aero-News Network, Editor-In-Chief

As expected, the Air Transport Association (ATA), the industry organization representing leading U.S. airlines, has just announced the unified vision of its 19 member carriers for funding a next-generation air traffic control system as part of the FAA Airport and Airway Trust Fund (AATF) reauthorization.

For the first time in more than a decade, ATA member airlines collectively endorsed a Statement of Principles, calling for a new cost-based approach to operate, maintain and modernize the National Airspace System (NAS). Under this unified effort, ATA has launched a national campaign, Smart Skies: A blueprint for the future, aimed at educating the public and lawmakers on the need to smartly modernize the NAS and to strive toward implementing a fair funding mechanism.

“We are at a historic juncture for U.S. aviation and ATA member airlines have joined together in a call for change,” said ATA President and CEO James C. May (below, right).

“Our country’s economy depends on aviation and, without some change in the status quo, the system will not be equipped to meet future demand.”

Speaking at a media briefing, May was joined by Campbell-Hill Aviation Group Chairman Dr. Brian Campbell, who released his firm’s report: Commercial Aviation and the American Economy. The report summarizes the estimated impact of commercial aviation on the U.S. economy in 2004, at the state and congressional district levels.

“The commercial aviation sector has a significant impact on the U.S. economy, based on air transportation and airport services, manufacturing, and travel and tourism expenditures from air passengers,” said Campbell. “In 2004 alone, commercial aviation drove $1.2 trillion in economic activity, $380 billion in personal earnings and 11.4 million jobs.”

May noted that the AATF reauthorization process provides a one-time opportunity to create a structure that ties funding directly to use of the system. “Trust Fund revenues are unpredictable because they depend upon fluctuating ticket prices and aircraft size,” he said. “How can we determine how best to spend federal funds when there’s no way of knowing how much revenue there will be? As long as there is no direct link between funding and costs, much needed modernization cannot occur.”

In addition to continued General Fund contributions, the ATA guiding principles state that the new mechanism for operating, maintaining and modernizing the NAS must include the following 10 principles:

1. Congress must determine and impose a specific schedule of mandatory user charges – directly and proportionally linking system use with system costs – which are fair, equitable and simple.

2. Each user category may rely on its preferred collection mechanism, providing that each such category does not impose any burden on commercial aviation that is not cost-based.

3. Transition over a reasonable period to a metric, in lieu of existing commercial aviation taxes, for assessing aircraft charges based on a percentage formula that incorporates only number of “departures” and “time in system.” The departure charge may vary for nighttime operations and size of community.

4. Revenue to be segregated from other government revenue and dedicated exclusively to airspace system operations, maintenance and enhancements.

5. A dedicated revenue stream, ensuring that revenues are spent in a timely manner for the intended purpose, without additional congressional action.

6. Use of a dedicated funding stream that is authorized to support bond financing, ensuring maximum leverage of available financial resources.

7. A reformed administrative structure, providing for a direct role in governance proportional to the extent of each user category’s financial contribution to the operation, maintenance and enhancement of the national airspace system.

8. Autonomous authority granted to the ATO, to facilitate effective cost control and decision-making.

9. Operators of piston-powered general aviation aircraft should continue to pay through their fuel tax mechanism.

10. Any new FAA funding method established must be fair and based on reasonable indicia of use of the aviation system, as obtained from a credible, reliable and transparent FAA cost accounting system.

ATA airline members transport more than 90 percent of all U.S. airline passenger and cargo traffic. ATA Airline Members comprise: ABX Air, Inc., Alaska Airlines, Inc., Aloha Airlines, American Airlines, Inc., ASTAR Air Cargo, Inc., ATA Airlines, Inc., Atlas Air, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., Evergreen International Airlines, Inc., FedEx Corporation, Hawaiian Airlines, JetBlue Airways Corp., Midwest Airlines, Inc., Northwest Airlines, Inc., Southwest Airlines Co., United Airlines, Inc., UPS Airlines and US Airways, Inc.; ATA Airline Associate Members include: Aeromexico, Air Canada, Air Jamaica Ltd., Mexicana; ATA Industry Members include: Aero Instruments & Avionics, Inc., ATR Aircraft, Benfield Insurance, Bombardier Regional Aircraft, Cendant Travel Distribution Services, Embraer, Honeywell Aerospace, KPMG, Metron Aviation, Inc., Pratt & Whitney, The Royal Bank of Scotland, plc, Sensis Corp., SITA, TDG Aerospace, Inc., TIMCO Aviation Services, Unisys Global Transportation, Universal Air Travel Plan, Inc. (UATP), USI Insurance and WinWare, Inc.

FMI: www.smartskies.org