Washington Report: NATA questions domestic RVSM costs

 - August 5, 2008, 8:35 AM

The National Air Transportation Association said in a letter to the Office of Management and Budget (OMB) that the FAA has failed to take into account the economic impact of domestic reduced vertical separation minima (DRVSM) on small on-demand air charter operators.

“The proposed rule should be returned to the [Transportation Department] for reconsideration and further analysis by the FAA,” said NATA president Jim Coyne. “This rule represents a very bad return on investment for small businesses.”

According to NATA, the FAA now has admitted that at least 380 small businesses providing services as on-demand air charter operators are substantially affected by the proposed rule. NATA believes the majority of those affected small businesses are air-cargo operators. The newly revised figure is said to represent almost a 200-fold increase in the number of small businesses that the FAA admits will be affected by the rule.

The rule is scheduled to be delivered shortly to the OMB for review. As part of its review of the proposed DRVSM, the OMB, which is part of the White House, is supposed to reduce unnecessary burdens on the public.

“Of the roughly 3,000 Part 135 FAA-certified on-demand air charter operators, the vast majority of them have fewer than 25 employees and annual revenues of less than $5 million,” Coyne said in a letter to new OMB director Joshua Bolton. “The majority (64 percent) of the turbine aircraft operated by on-demand carriers are at least 11 years old. These older aircraft are the most likely to incur high compliance costs to meet DRVSM specifications.”

The NATA president noted that the oldest aircraft in the fleet are generally flown by all-cargo operators and are likely to be phased out of use in the next five to 10 years. Based on frequent and widespread statements by manufacturers, installers and operators alike, NATA estimates that operators of such aircraft will be faced with compliance costs averaging $200,000 per aircraft if the regulation is implemented as proposed.

Coyne said the FAA has failed to accurately account for the proposed regulation’s substantial economic impact on small businesses as a result of its drive to implement DRVSM.

For its part, the FAA projects that DRVSM will result in fuel savings alone
of about $5.3 billion a year (AIN, July, page 88). The OMB will review the final DRVSM rule before publication to evaluate its economic effect.