U.S. Sequestration Would Undercut the FAA’s Capacity To Serve Air Transport, Says AIA

AIN Air Transport Perspective » August 20, 2012
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The Aerospace Industries Association is keeping time until sequestration potentially takes effect in January, cutting federal defense and non-defense spending by $1.2 trillion over the next decade and threatening up to two million jobs. (Photo: Bill Carey)
August 20, 2012, 9:20 AM

The U.S. Federal Aviation Administration would have to slash its operations budget and could not support current levels of passenger and air cargo activity if the process of automatic federal spending cuts known as “sequestration” takes effect in January as scheduled. In turn, reduced passenger and cargo activity would lead to job losses and other economic fallout, according to a study released by the Aerospace Industries Association (AIA).

“Sequestration was supposed to be the sword of Damocles hanging over the Congress, forcing them to act [on reducing the federal budget deficit],” said Todd Hauptli, senior executive vice president of the American Association of Airport Executives. “Thus far, they haven’t acted. These cuts will have significant impact on operations within the FAA. Travelers are going to feel this. If this is allowed to go into effect in January, it will manifest itself in longer lines at the airport.” Hauptli and several association executives spoke at an August 13 luncheon in Washington, D.C., organized by the AIA to discuss the study.

Unless Congress acts to reverse its own legislation, sequestration will force automatic federal spending cuts of $1.2 trillion over the next decade, split between defense and non-defense outlays. The 2011 Budget Control Act triggered the cuts after a bipartisan Joint Select Committee on Deficit Reduction–dubbed the “super committee”–failed to reach agreement on reducing the federal deficit last November.

The AIA-commissioned study by Econsult posits that sequestration would reduce the FAA’s annual appropriation by $1 billion per year for nine years, forcing the agency to cut mainly from its operations budget for ATC services and salaries, the largest account. The study assumes an across-the-board 8.5-percent reduction of the operations, facilities and equipment, research, engineering and development and Next Generation Air Transportation System (NextGen) line items. The Airport Improvement Program, which provides grants to public agencies for the development of public-use airports, stands exempt from sequestration.

FAA budget reductions tilted more heavily toward research and development could scale back implementation of NextGen and delay it by 10 years, to 2035.

The FAA’s reduced capacity for ATC operations would lead to reductions in passenger enplanements of 5 to 10 percent (between 36.5 million and 73 million). Similarly, the air cargo industry would see volumes cut by 1 to 2 billion pounds annually. Taking into account a seven-year production backlog for new aircraft, the study says sequestration cuts and the resulting lapse in passenger and cargo demand “would generate a small, yet not negligible, decrease” in domestic aircraft manufacturing of 1 to 2 percent.

Along with its own projections, the AIA study cites a letter that U.S. Rep. Norm Dicks (D-Wash.) sent to the super committee last October. In that letter, Dicks estimated that sequestration would close 246 ATC towers and lead to the layoff of 1,600 controllers, 9,000 Transportation Security Administration screeners and 1,600 customs inspection officers.

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