FAA Administrator defends user fees at avionics show

 - April 27, 2007, 8:39 AM

The Aircraft Electronics Association (AEA) convention usually offers a sneak preview of the future of general aviation avionics. This year there were plenty of product introductions, but the real news from AEA 2007 unfolded before the show started.

FAA Administrator Marion Blakey accepted an invitation to deliver the keynote speech at the convention’s opening session. It is the first time she has done so, despite repeated overtures from AEA in the past. But this year is different. 

The attendees at AEA’s 50th annual convention in Reno, Nev., in late March probably represented one of Blakey’s tougher crowds, and for good reason. AEA’s audience stands to lose if Blakey’s assumptions about user fees are wrong. If general aviation flying slows as a result of big fuel tax increases and user fees, aircraft owners and operators will have a harder time justifying the purchase of the very electronics gadgetry that is the lifeblood of the avionics industry.

Under such a scenario, smaller equipment makers and avionics dealers would suffer. Mandates for automatic dependent surveillance-broadcast (ADS-B) transceivers and other next-generation avionics will provide some lucrative opportunities down the road, but perhaps not to the degree Blakey and other members of the FAA are anticipating.

Some of the comments Blakey made raised the ire of attendees, many of whom expressed cynicism and even some anger afterward. In response to skeptics who pointed to the FAA’s reputation for wasteful spending and questioned the agency’s track record for staying on budget when it comes to funding big-ticket modernization projects, Blakey said, “Some of the rhetoric out there, it’s just that–but it’s flat-out wrong.” She added, “The criticisms that the FAA can’t be trusted with a cost-based system just don’t hold water. One-hundred percent of our major capital projects are on schedule and on budget.”

A number of attendees refuted Blakey’s claim, recounting the cost overruns incurred by the wide-area augmentation system (WAAS) and the standard terminal automation replacement system (Stars) project, as well as more recent delays of the local-area augmentation system (LAAS) and controller-pilot datalink communications (CPDLC) program. Blakey has since revised her stance by saying 90 percent of major projects are on budget.

Blakey also attempted to explain the new user fees in practical terms, in spite of the resistance from the audience. She said, “In our proposal, Joe Pilot in a Cessna 172 will experience an operating cost increase of about $4 an hour. Let me repeat that: $4 an hour. In other words, the owner of a very expensive aircraft is engaged in a heated dispute that hinges on the cost of a Starbucks latte. If the fuel tax is increased, it still represents less than 5 percent of the overall annual operating costs of what it takes to fly GA aircraft, and that’s across the board.”

AEA president Paula Derks questioned the accuracy of Blakey’s statements. The FAA is proposing a GA fuel-tax increase of around 50 cents a gallon, which would be added to the current 19-cent tax for avgas and 21-cent tax for jet fuel. Joe Pilot’s Cessna 172 burns around eight gallons an hour at 65-percent power, for the $4 figure Blakey mentioned.

However, Derks said, “The owner of a King Air or Citation will pay a lot more than $4, I can tell you that. It will have a big impact on those operators and on the industry as a whole.” 

Critics of the FAA’s funding plan employ a certain amount of “fuzzy math” in their own arguments, however. For example, many GA leaders refer to a 70-cents-a-gallon tax increase when talking about the proposal, but it’s actually an increase to 70 cents a gallon from the current 21.8-cent tax for jet-A. The tax increase is 48.2 cents per gallon. Although critics rightly point out that the proposal is intended to shift costs away from the airlines, the FAA under the new tax structure would prefer more flying by GA operators since every gallon of fuel burned by GA fliers would mean more money for modernization.