ATA content with reauthorization first step

The Air Transport Association of America has issued a positive statement in response to the release of the
Federal Aviation Administration (FAA) Reauthorization Bill and FAA Cost
Allocation Study on the reauthorization of the Airport and Airway Trust
Fund (AATF).

“While we applaud this proposal as a good step forward in advancing the
reauthorization debate and welcome its recognition of the inequity of
forcing airlines and their customers to subsidize other system users, we
have deep concerns over a number of elements of the proposal,” said ATA
President and CEO James C. May.

        May offered the following observations:


*      Support for Rational Funding


ATA supports the FAA movement to correct the unfairness of the current
funding system by proposing more reliable, predictable and equitable
funding going forward. While more work remains to fine-tune the
allocation process, we see the FAA endorsement of a cost-based funding
mechanism for both airlines and other air traffic control (ATC) system
users as a step in the right direction. In addition, the proposal
accommodates the general aviation community’s desire to pay their fair
share of the cost for using the system through a use-based, calibrated
fuel tax.


*      Elimination of Corporate Jet Subsidy

ATA is pleased that FAA has been able to quantify the subsidy that
airline passengers and shippers have been forced to pay to cover the
cost of all other users of the ATC system. Today, airlines contribute 94
percent of revenue into the Trust Fund but, according to the new FAA
Cost Allocation Study, airlines drive less than 73 percent of ATC costs.
While that new calculation continues to reflect a subsidy we will be
addressing, it is a major step forward.


*      Establishment of Bonding Authority

ATA also is pleased that the administration is providing FAA with $5
billion in borrowing authority - and not relying on new taxes or fees -
to build a 21st century ATC system. This will provide FAA with the
funding needed to move from a ground-based, human-centric ATC system, to
a satellite-based system that will allow us to meet future demand.


*      Confusion over Congested Airspace versus Congested Airports

The administration’s proposal includes a fee for operating in the “most
congested” airspace, but improperly pegs that fee to large airports, and
that concerns us. By tying the fee to the airport, the FAA does not
address the real congestion issue in surrounding airspace. For example,
20 percent of en route traffic in the New York area comes from general
aviation traffic that does not use large airports in the area and no
rationale exists for the continuation of a subsidy.


*      Use of Aircraft Weight as an “Artificial Proxy”

The proposal’s use of weight as a factor in assessing cost-based funding
is of enormous concern to ATA member airlines. FAA’s own study found the
number of onboard passengers, aircraft weight and size were irrelevant
to the actual costs of using the ATC system. Further, the Government
Accountability Office has determined that incorporating weight into a
cost-based formula weakens the link between use and costs. Heavier
planes would be required to contribute more for traveling the same
distance, even though they impose no greater costs. This old-school
thinking has no place in a modern, fair funding system.


*      Failure to Meaningfully Reform Airport Funding

The administration also missed the mark on its airport funding
proposals. For one, the Airport Improvement Program (AIP) includes $1
billion in subsidies for non-commercial airports paid by commercial
airline passengers. Worse still, the administration is proposing to
raise passenger “head taxes” in the form of the passenger facility
charge - this federally approved, local ticket tax could cost passengers
an extra $2 billion annually, without any meaningful airline or FAA
controls. In essence this will provide more money on top of the
approximately $14 billion already being spent annually on our nation’s
airports. This is more about meeting airport wants rather than airport


“ATA views the administration’s proposal as a starting point for
Congress to draw upon as it begins its consideration of the crucial
future course of our nation’s air transport system,” said May. “We look
forward to working with Congress and the administration to build a 21st
century ATC system supported by equitable, sustainable funding.”