FAA funding troubles fuel industry concerns

 - September 21, 2006, 5:06 AM

FAA financing and the prospect of user fees to help pay for modernization of the ATC system is the primary issue facing general aviation in the coming year, said National Air Transportation Association (NATA) president Jim Coyne during an annual industry briefing to the media.

“I want to make it perfectly clear that this is an issue that should properly be described as a tax,” he asserted. “Anything that is imposed by the government from a position of a monopoly power on citizens is a tax. And this is as much an example of a monopoly government action forcing you to pay something as any other tax.”

The Bush Administration calls the concept a fee for services, but most people in the aviation industry label it a user fee. Coyne called it probably one of the greatest tax increases ever levied on general aviation.

“I’m very, very worried about how this fight will unfold because I think it’s going to create a tremendous amount of anger, hostility and dispute across the aviation industry,” he predicted. “And this is at a time when aviation needs to be working together.”

Coyne added that in the debate over the past year there has been an unusual amount of each side blaming the other, with the airlines arguing that general aviation–and more specifically business aviation–is not paying its fair share. He countered that GA is paying more since 9/11 while the airlines are paying less and less.

Virtually all of the problems that are causing the FAA’s funding crisis, he said, are a function of the reduced amount of taxes that the agency is collecting from the airlines as their ticket prices have fallen.

“I think if I had two taxpayers supporting the government and one of them is paying a lot less than he was four years ago, and the other one is paying a lot more, for the one that was paying less to point to the other one and say, ‘He should be paying even more’ seems like a little bit of chutzpah,” Coyne told the group.

“Now I like my friends in the airline business as much as anybody does, but I think this debate has got to be presented really on a much more intelligent basis than what we are seeing now.”

The airlines’ strategy to target business aviation is “a little bit like the airline strategy of soaking the first-class passengers over the last 30 years,” he explained. “You charge the business traveler three or four times as much as anybody else in the aircraft because you can.”

Coyne believes this “soak the rich” mentality will probably “meet with a lot of resistance in Congress over the next year.” NATA believes the fight is far from over and that there will be opportunity to change the thinking of the Bush Administration and the FAA.

He reminded the group that the ATC system was created for the airlines and exists principally for the airlines. “For them to assert that every plane in the sky should pay the same fee or something similar to that is just not historically accurate or fair,” Coyne said.

Further, he said that the core financial difficulties that the FAA is experiencing are not going to be solved by the creation of a slightly different version of the existing monopoly.

Despite all of the proposals that have come out of the White House, he continued, the same flaws that render the monopoly unable to monitor its costs will continue unless a truly competitive alternative to the ATC system is created.

“The other big issue this reflects upon is the labor costs in the ATC system,” Coyne said. “The FAA has done a poor job, even by its own admission, in the last 20 years of controlling its labor costs ever since the [1981 controllers] strike.”

“We have got to go a long way to help the FAA get control of its labor costs,” he stated. “It’s not a money crisis; it’s a ‘let’s get our costs down’ crisis.”

Coyne also called on the federal government to take a more active role to prevent closure of general aviation airports. While a handful of new runways might open at major airports within the next few years, hundreds of GA airports could be forced to close within that time. He said he was “dismayed” by the FAA’s lack of leadership in preventing airport closures and promoting aviation.

“Our political leaders have to make commitments as they do for some other front-burner issues,” Coyne told the group. “I think we are going to be looking to Congress for support.”

NATA will be looking for congressional support on GA safety, as well. The association established a safety management system (SMS) for airport ground operations in 2004 and has unveiled an SMS for air charter operations.

NATA describes the system for air charter as a systematic, comprehensive program for the management of safety risks. For companies with existing safety programs, the program can serve as a benchmark or bolster the safety management already in place.

According to NATA, this proactive approach to safety, through a professional safety management system, is the best course of action to improve the overall air charter safety record while enhancing industry standardization and improving public perceptions.

“As we see more and more Americans relying upon general aviation aircraft, I think it’s fair to say that the American public expects private aviation safety to rise to the standards that we have come to expect from the airline industry, recognizing that there are some fundamental differences,” said Coyne.