Anti-bizjet language removed from TARP

 - January 27, 2009, 9:09 AM

Just as business aviation was girding for a fight over a Troubled Assets Relief Program (TARP) amendment that would have forced companies receiving TARP funds to dispose of their business aircraft, the House of Representatives moved to strike the language from the legislation.

Before the provision was scuttled, general aviation groups warned Congress that such a requirement would have a devastating effect on the GA industry and the national economy, putting hundreds of thousands of jobs at risk.

“Congress might be trying to bolster the economy, but enactment of this provision will put the jobs of tens of thousands of hard-working Americans at risk,” NBAA president and CEO Ed Bolen said. “This could devastate the small businesses that fuel and service general aviation airplanes, further harm the manufacturers who are already laying off workers and slowing assembly lines, and take away a tool from companies that need general aviation airplanes to operate to and from the thousands of U.S. communities that have little or no scheduled airline service.”   

The amendment that would have required all companies applying for TARP funds to get rid of private aircraft owned or leased was introduced January 9 by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.

Frank’s amendment sprang from what is referred to as the “Auto Bailout Bill,” H.R.7321, which would authorize financial assistance to eligible automobile manufacturers. The legislation contains a provision that would prohibit the “Big 3” from owning or leasing private aircraft.

At a series of hearings in early December to determine whether Ford, General Motors and Chrysler deserved federal assistance due to their financial struggles, members of Congress blasted the three CEOs for each using private jets to travel separately to Washington to ask Congress for billions of dollars in federal assistance.

The National Air Transportation Association (NATA), which represents on-demand charter operators, said that after reviewing the bill’s language in consultation with congressional staff, it concluded the prohibition against TARP recipients owning or leasing aircraft also was intended to preclude the use of commercial, on-demand air carriers as well as participation in fractional ownership programs.

Frank’s proposed amendment forcing TARP recipients to sell their aircraft and close their flight departments received unanimous opposition from general aviation. The outcry was loud, immediate and unrelenting.

“Targeting our industry is an unacceptable and counterproductive response to our nation’s economic situation,” said Pete Bunce, president and CEO of the General Aviation Manufacturers Association (GAMA). “If passed, this provision will have an adverse impact on our industry and jeopardize high-paying manufacturing jobs. A decision like this would be completely inappropriate at a time when general aviation manufacturers are already suffering from a weak economy. The last thing we need is for Congress to pursue an effort that will ultimately weaken an important domestic manufacturing industry.”

GAMA also pointed out that the GA industry is one of the few remaining industries that maintain a positive trade balance for the U.S. In 2007, U.S. general aviation airplane manufacturers delivered more than 3,279 airplanes to customers in the U.S. and abroad. The total value of these aircraft was close to $11.9 billion. Some 38.4 percent of those airplanes were exported.

More support to strike Frank’s amendment came from the powerful U.S. Chamber of Commerce, which strongly supported TARP. The chamber told Congress that forcing a wholesale and massive divestiture of private passenger aircraft could jeopardize the employment of tens of thousands of workers and imperil billions of dollars of economic activity.

“The state of commercial airspace congestion is well documented,” the chamber said in a letter to Frank and Rep. Spencer Bachus (R-Ala.), the ranking Republican on Frank’s committee. “Private passenger aircraft allow companies to transport workers and goods more efficiently and quickly. Additionally, this sector employs tens of thousands of workers who build, maintain, fuel and dispatch aircraft.”

Industry Takes Action
NBAA, NATA and the Alliance for Aviation Across America all issued “action calls” to members when Frank’s proposal was made public, and when the language was removed Bolen recognized NBAA members for their critical role in voicing their concerns about the TARP proposal with their members of Congress. 

“NBAA has long said that efforts by the association in Washington are most effective if its members also reach out to Congress,” Bolen told NBAA members in a January 13 e-mail. “My thanks to all those in NBAA’s membership who used Contact Congress to send Congress an unequivocal message of opposition to the TARP proposal. Today’s outcome shows that our members’ direct participation can make a difference.”

NATA issued its action call on January 12, and said members responded overwhelmingly with e-mails and phone calls to members of Congress. “The association thanks its members for this overwhelming response as this legislation would have set a damaging precedent that would have detrimentally affected the thousands of small businesses in this country that provide air transportation using general aviation aircraft as well as the small businesses that support these types of operations.”

In the fallout from the automakers’ trips to Washington, both GM and Ford released statements noting their intent to close their flight departments. Both blamed the economy, rather than the media brouhaha they ignited by flying to Washington in private jets to request government financial assistance.