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Thu, Apr 19, 2007

Report: Some Airline Execs Reconsidering Support Of User Fees

Piston Aircraft Could Escape Taxes... But BizAv Would Still Pay

Could even some airline representatives be coming around on the subject of user fees? It sounds hard to believe... but weekly congressional newspaper The Hill quotes an airline industry source as saying the FAA erred in proposing increased taxes on small aircraft to pay for air traffic control modernization.

The proposal move has triggered an outcry from the general aviation community, which last week announced it was forming the Alliance for Aviation Across America, a new coalition to fight the FAA plan. As Aero-News reported, the group includes aviation interests as well as groups associated with rural America, including the National Farmers Union and League of Rural Voters.

Concern over the impact such fees would have on medical flights and other charitable, often life-saving missions has reportedly swayed some airline executives to reconsider their support, according to an unnamed source in the industry.

“If costs go up significantly, it’s likely the public service missions will be hit first,” warned Rol Murrow, president of the Air Care Alliance, which represents nonprofits that do volunteer missions.

A spokeswoman for the alliance, Selena Shilad, told The Hill that commercial airlines are just trying to distance themselves from the FAA’s proposal, which they originally backed. Rumor has it many in the airline industry now believe such fees won't be levied against piston-driven aircraft (which would still leave turbine aircraft and business jets vulnerable to increased fees... perhaps even more so, given the loss of projected revenue from smaller GA planes -- Ed.)

The Hill also notes the FAA's own accounting figures don't quite measure up to its claims that airlines are paying a disproportionately high cost to maintain the nation's air traffic control system. According to an FAA spokeswoman, the major US airlines account for 73 percent of the air-traffic control system’s costs... but contribute 95 percent of the system’s trust fund.

“We’ve put forward what we think is a fair and equitable proposal,” the spokeswoman said.

That doesn't agree with an internal document, obtained by The Hill, from the Air Transport Association. The memo states the airlines paid roughly 74 percent of total fund contributions. The number only rises to the 90s when taking into account cargo shippers and foreign carriers.

Although the airlines have tremendous clout in Washington, they appear to face an uphill battle. Influential lawmakers of both parties, in both houses of congress, are critical of the FAA plan.

First versions of a bill to reauthorize and fund the FAA is expected from both houses by the end of May. The currently FAA authorization expires at the end of September.



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