FAA Reauthorization Bill Status

[Furloughed80]

AP
Ahead of the Bell: FAA Reauthorization
Thursday September 20, 6:09 am ET House Vote Likely on FAA Reauthorization; Major Airlines, White House Oppose Bill
WASHINGTON (AP) -- Commercial airlines and the White House oppose key parts of a Federal Aviation Administration funding bill the House of Representatives is expected to pass Thursday.
Congress has until Sept. 30 to reauthorize the FAA and possibly raise taxes and fees to pay for upgrades to the air traffic control system and other aviation programs. Commercial airlines are battling corporate jets and small plane operators over what share of the cost they each should shoulder after a summer in which travel delays reached record highs.
After the House Ways and Means Committee passed the reauthorization bill Tuesday, Air Transport Association President and Chief Executive James C. May said the "minimal increases in corporate plane fuel taxes represent a 'business as usual' approach" and urged lawmakers to instead pass true "cost-based funding reform."
The ATA, whose members include Continental Airlines Inc., Delta Air Lines Inc. AMR Corp.'s American Airlines, UAL Corp.'s United and others, contend that corporate aviation does not pay its fair share of fees based on the amount of services it uses.
The White House on Wednesday issued a statement that said if the current version of the bill were presented to President Bush, his senior advisers would recommend a veto. The administration also favors a closer alignment of FAA revenue with its costs through fees linked to system usage.
"While the administration is pleased that (the bill) adopts cost-based registration and certification fees, (it) strongly urges the House to adopt cost-based financing more broadly," according to the White House statement.
But Ed Bolen, president and CEO of the National Business Aviation Association, hailed the legislation for dedicating the additional tax revenue exclusively to modernization and for rejecting user fees. The group represents more than 8,000 companies and other operators of private aircraft.
And not all ATA members endorse its financing plan for the FAA. JetBlue Airways Corp. last month took the unusual step of publicly splitting from the trade group in letters sent by its president and CEO Dave Barger to House and Senate leaders.
Forest Hills, N.Y.-based JetBlue said the ATA proposal to tax passengers based on the distance between their origin and final destination, instead of actual miles flown on connecting flights, penalizes JetBlue and other airlines that avoid hubs and rely primarily on nonstop, point-to-point service.
Barger's letter said the ATA proposal would "mislead Congress into legislating which airlines using the (air traffic control) system pay their fair share and which airlines are provided statutory exemptions."
The FAA on Aug. 30 awarded a ITT Corp. a contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system. Upgrading the system used to manage commercial and general aviation traffic will help reduce air and runway congestion and operating costs, but will take nearly 20 years to complete and cost more than $15 billion.

 

[mynameisjim]

May said the "minimal increases in corporate plane fuel taxes represent a 'business as usual' approach" and urged lawmakers to instead pass true "cost-based funding reform."
...
"While the administration is pleased that (the bill) adopts cost-based registration and certification fees, (it) strongly urges the House to adopt cost-based financing more broadly," according to the White House statement.

So the government won't be happy until there are user fees. Does anyone think that gas taxes will go away once they fund the FAA with user fees? Any chance we can delay this until a new administration starts?

 

[BoilerUP]

Any chance we can delay this until a new administration starts?

Yup.

Bill passes the House and Senate. President vetos the bill. Bickering and infighting between politicians and special interests commences.

Repeat ad nauseum until January of 2009.

 

[mynameisjim]

The best part is that both my employer and AOPA can use my money to fight each other

 

[Andy Neill]

So the government won't be happy until there are user fees. Does anyone think that gas taxes will go away once they fund the FAA with user fees? Any chance we can delay this until a new administration starts?

An authorization bill passed by a Democratic House and a Democratic Senate is threatened to be vetoed by a Republican President. Do you think the results will be better with a Democratic President?

 

[The_Russian]

If this passes, many of us will be furloughed. Some airlines will die and the FAA may lose much of the income they would have received otherwise. Not to mention that the FAA inspectors may go with the certificates as they lose their operators.

Oh, and watch for concessionary contracts.

 

[N1atEcon]

If this passes, many of us will be furloughed. Some airlines will die and the FAA may lose much of the income they would have received otherwise. Not to mention that the FAA inspectors may go with the certificates as they lose their operators.

Oh, and watch for concessionary contracts.

"Please!" anything else you want to throw in there Chicken little?

 

[bravodude]

Is the age 60 rule in their somewhere. i hope not

 

[Furloughed80]

Yes, age 65 is included in this bill. If this bill is vetoed it would be a significant set back for age 65.

 

[Furloughed80]

WASHINGTON (AP) -- Commercial airlines are counting on a probable White House veto for a Federal Aviation Administration funding bill they oppose because it does not fairly link fees to system use.
The Air Transport Association, whose members include Continental Airlines Inc., Delta Air Lines Inc. AMR Corp.'s American Airlines, UAL Corp.'s United and others, lobbied against the bill, which easily passed the House of Representatives on Thursday.
Congress has until the end of the month to reauthorize the FAA and possibly raise taxes and fees to pay for upgrades to the air traffic control system and other aviation programs.
Commercial airlines are battling corporate jets and small plane operators over what share of the cost they each should shoulder after a summer in which travel delays reached record highs.
The airline trade group contends that corporate aviation does not pay its fair share of fees based on the amount of services it uses. The Senate is working on similar legislation.
The White House on Wednesday issued a statement that said President Bush's senior advisers would recommend a veto of the current version of the bill partly because the administration also favors a closer alignment of FAA revenue with its costs through fees linked to system usage.
The bill would increase the jet fuel tax for noncommercial planes to 30.7 cents per gallon from 21.8 cents, and the aviation gasoline tax to 24.1 cents from 19.3 cents. It would also raise the cap on fees airports can charge passengers for capital improvements to $7 from $4.50.
Ed Bolen, president and CEO of the National Business Aviation Association, hailed the House bill for dedicating the additional tax revenue exclusively to modernization and for rejecting user fees. The group represents more than 8,000 companies and other operators of private aircraft.
The FAA on Aug. 30 awarded a ITT Corp. a contract worth up to $1.8 billion to build the first portion of a new satellite-based air traffic control system.
Upgrading the system used to manage commercial and general aviation traffic will help reduce air and runway congestion and operating costs, but will take nearly 20 years to complete and cost more than $15 billion.

 

[BoilerUP]

I don't want age 65 now OR later...but if it comes down to user fees for GA or immediate age 65, I say let's get the age discrimination lawsuits over with.

NO USER FEES.

 

[Daddy]

Age 65 passes house

http://biz.yahoo.com/ap/070920/airlines_faa_funding_bill.html?.v=1

 

[Furloughed80]

SAN FRANCISCO (MarketWatch) -- Legislation that would fund a long-awaited upgrade of the U.S. air-traffic control system easily passed the House Thursday, though key parts of the bill looked doomed after the White House said the bill's tax structure would trigger a veto.


The House of Representatives voted to authorize funding for the Federal Aviation Administration through 2011. The 267-151 vote was mostly on party lines.
The bill would provide $68 billion for the agency that oversees U.S. airspace and regulates U.S airlines, bankrolling its operating budget and underwriting a major upgrade to the nation's air traffic control system to one based on satellite-positioning. The current system uses 1950s-era radar technology.
The increased spending would be partly financed by higher fuel taxes on airlines, increasing the tax rate on aviation gasoline by 25%, to 24.2 cents a gallon, and by 64% for aviation-grade kerosene used in noncommercial aviation, to 36 cents.
Consumers would also share some of the pain, and get some additional looking-after when things go wrong.
The bill, H.R. 2881, would raise the fee that airports can charge passengers to a maximum of $7 a ticket from a $4.50, an increase that would go to expanding or improving airports, such as projects to reduce noise congestion.
And it would require airlines and airports to have contingency plans in place to take care of passengers stuck in planes waiting at an airport for several hours. Those excessive tarmac delays are part of a passenger's bill of rights pushed by some legislators and consumer activists. See related story.
The bill also included a slew of smaller proposed changes to the way airlines operate in the United States, such as raising the mandatory retirement age for commercial pilots to 65 from 60.
The White House has threatened to veto FAA reauthorization if final legislation, which is also making its way through the Senate, contains the same structure for levying fees on airlines.
On the eve of the House vote, the White House said H.R. 2881 "falls far short" of providing reforms proposed by the Bush administration earlier in the year, including linking fees to fund the FAA with usage.
Making the tax rate on aircraft operators line up with their use of the system has been a subject of intense lobbying by commercial airlines, which say they are paying more then their fair share for the FAA's operations.
Instead, the Air Transport Association wants Congress to raise the tax rate on corporate jets. The association includes , such major carriers as AMR, CAL, UAL.
The association has launched an advertising campaign targeted at wealthy owners of corporate jets, featuring a bee-hived flyer named Edna, who "likes wearing big-wigs ... not subsidizing them."
"The House bill does little to promote NextGen or correct the subsidy of corporate jets by airline passengers," said James May, the group's president and CEO, in a statement late Thursday. "Even worse, it imposes a $2.2 billion tax increase on passengers in the form of airport facilities charges."
The ATA says jets carrying commercial passengers use 66% of air traffic control services but pay 92% of money that goes into fund, while corporations use about 16% but pay under 8%.
JetBlue Airways has broken with the commercial airline industry on how the funding structure should be changed.
As Congress debates funding for the FAA, the agency has already started to award contracts for an upgrade of its antiquated air-traffic control system.
In August, defense electronics-maker ITt and French communications specialist Thales (FR:012132: news, chart, profile) , won a contract worth up $1.8 billion to build key technology for the satellite system.

 

[PCL_128]

I don't want age 65 now OR later...but if it comes down to user fees for GA or immediate age 65, I say let's get the age discrimination lawsuits over with.

NO USER FEES.

This is ridiculous. Age-65 directly affects your career progression, but GA user fees have absolutely nothing to do with your livelihood. Not to mention that the "GA" in these user fees is only business jets, and not real general aviation. These user fees would never have any affect on you whatsoever.

 

[FR8dognit]

Thank goodness "line item veto" went away. If it hadn't the bill might have passed with those few things veto'd. WHEW. I knew I still loved our President.

 

[AlbieF15]

This is ridiculous. Age-65 directly affects your career progression, but GA user fees have absolutely nothing to do with your livelihood. Not to mention that the "GA" in these user fees is only business jets, and not real general aviation. These user fees would never have any affect on you whatsoever.

User fees would affect us--the guys at the fractionals and corporate would absorb the cost and would pass it on or take it out of labor. While not directly our labor pool, we all benefit when GV drivers are well paid too.

Additionally--taxes have a way of trickling down. This year--a King Air or Citation has to pay to file IFR. Three years down the road, I could be asked to the same thing for my Navion.

Finally--one of the few areas where this country has a solid, dominating industrial base is aviation. WHY would be want to put a tax and that and potentially harm what is a very successful part of American industry. The Canadians and Brazilians and French have been successful too, but around the globe a heck of a lot of airplanes are made my Beech, Cessna, Cirus, Gulfstream etc etc. We need to encourage and support that base--not stick another tick on it to suck the life out to support the unproductive.

 

[Furloughed80]

User fees would affect us--the guys at the fractionals and corporate would absorb the cost and would pass it on or take it out of labor. While not directly our labor pool, we all benefit when GV drivers are well paid too.

I see your point, but what about airline labor? Do you think having airlines pay the bulk of these fees have had no impact at all on the pay of airline employees? I don't know if it has or has not, but if it is assumed that fractionals and corporate aviation will pass these costs to labor the same argument could be made for the airlines.

 

[BoilerUP]

Do you think having airlines pay the bulk of these fees have had no impact at all on the pay of airline employees?

Airlines don't pay most the fees, their passengers do. Besides, airlines are the primary users and beneficiaries of an air traffic system that was built to specifically cater to their hub-and-spoke system.

This is ridiculous. Age-65 directly affects your career progression, but GA user fees have absolutely nothing to do with your livelihood. Not to mention that the "GA" in these user fees is only business jets, and not real general aviation. These user fees would never have any affect on you whatsoever.

"Never have any affect on me whatsoever"? Come on now, don't be so naive or short-sighted about the sum of the aviation industry.

I'm not willing to screw somebody else just so I can get mine. Besides, the age is going to change sooner OR later, if it happening sooner prevents user fees (the same fees that have DESTROYED GA in most other countries) then so be it.

 

[Dizel8]

Do foreign airlines pay nav fees in the US, because I know the rest of the world, well most anyway, ch$arges an arm and a leg from US operators. Saw somewhere that overflying China in a GV was $3000+.

 

[PCL_128]

User fees would affect us--the guys at the fractionals and corporate would absorb the cost and would pass it on or take it out of labor. While not directly our labor pool, we all benefit when GV drivers are well paid too.

We don't benefit even the slightest bit from any corporate pilot salaries. It never enters the equation in any contract negotiations. Only other airlines are used for comparisons by both management and the unions.

 

[Cavpilot]

If this passes, many of us will be furloughed. Some airlines will die and the FAA may lose much of the income they would have received otherwise. Not to mention that the FAA inspectors may go with the certificates as they lose their operators.

Oh, and watch for concessionary contracts.

Dude, you have got to be kidding me.

 

[Furloughed80]

Airlines don't pay most the fees, their passengers do. Besides, airlines are the primary users and beneficiaries of an air traffic system that was built to specifically cater to their hub-and-spoke system.

Yes, currently the bulk of the money going into the Airport & Airway Trust Fund which partly funds the FAA comes from passengers taxes. A part of it also comes from fees and taxes levied on airlines. From what I understand, the fund was created in 1970 when airlines almost exclusively used the system and therefore paid the bulk of the fees. With the rapid growth of biz jet traffic, airlines feel they should pay for part of the system as well. I don't see how the air traffic system was built to cater to the hub and spoke system.

 

[DornierPilot]

Come on guys! Do you really believe that User Fees will never trickle down to single engine piston planes?? Pull your head out of the sand!

Here's the best analogy that I can come up with:

The Administration wants to tie all the expenses of operating the ATC system to individual flights, whether they're Heavys or corporate airplanes. (What other Federal services are financed solely from just the users of that service??) This would be just like making all Federal highways into toll roads - just the drivers that used the highways would pay for them. No contributions from the general fund. Is that a good idea? If your answer is No, then you can't argue that User Fees for ATC are fine.

The entire population of the U.S. benefits from a safe air and ground interstate transportation system. The General Fund should continue to play a large role in funding both. User Fees and Toll Roads will stunt the growth and safety of the transportation infrastructure.

For those of you that want to argue that the airlines are paying more than their fair share in taxes, let me ask you - If GA flights were grounded permanently, how many controllers would be laid off, how many towers would close, how many radar facilities would shut down. Answer - almost none!! Why? Because the entire ATC system is there for commercial operators (135/121), not GA.

If you agree, please contact your representatives and ask them to just say no to User Fees!

 

[Furloughed80]

From what I have read, the user-fee system would still include contributions from the General Fund.

 

[PCL_128]

Airlines don't pay most the fees, their passengers do.

And that fee goes into the total cost of a ticket. Airlines have a certain pricing point that they are targeting based on market research and yield management software that indicates what a passenger will pay. If they don't have the fees as part of that pricing point, then they can raise the cost of the actual fares and generate more profit. More profit = better CBAs.

 

[DornierPilot]

Furloughed,

What is the current General Fund contribution and what is the User Fee version General Fund proposed percentage? (I don't know the answer) If, in the User Fee proposal, it is lower, I'm against it. It should not be lowered from where it is now.

Are you a supporter of User Fees? If you are, do you plan on continuing to fly the piston aircraft in your profile???

If you are done flying privately in pistons, than i understand your lack of concern re: User Fees. I'm asking that you don't advocate ruining it for those of us that would like to be able to afford to fly privately now (or in the future in my case!).

Regards,

 

[DornierPilot]

PCL_128,

I think that since all tickets for the same segment would have exactly the same tax for all the carriers, there would be minimal impact on the profitability side.

Are you saying that the additional few dollars per ticket would keep such a large number of customers from buying an airline ticket, thereby reducing airline revenue significantly??

I don't buy that increasing ticket taxes across the board by a few dollars, removes significant numbers of customers to other modes of transport (or just not making the trip at all.)

Regards,

 

[Furloughed80]

I don't know what the percentage would be under a user-fee system. Under the current system the General Fund accounted for about 18%-24% recently. I can't imagine it being much lower under a user-fee system. I understand where you're coming from; but can we assume with certainty that the user-fee system will trickle down to single-engine pistons. It is not supposed to. I think a user-fee system represents a drastic change, and people generally resist change.

Anyway, I meant for this thread to be about age 65 and the fact that the Reauthorization Bill that it is attached to might get vetoed. I wanted to know how much of a delay that would put on age 65. I can understand both sides of the user-fee debate.

 

[PCL_128]

PCL_128,

I think that since all tickets for the same segment would have exactly the same tax for all the carriers, there would be minimal impact on the profitability side.

Are you saying that the additional few dollars per ticket would keep such a large number of customers from buying an airline ticket, thereby reducing airline revenue significantly??

I don't buy that increasing ticket taxes across the board by a few dollars, removes significant numbers of customers to other modes of transport (or just not making the trip at all.)

Regards,

Example:

Marketing determines that the correct pricing point for a ticket from ATL-DTW is $325, including all taxes and fees. This is the price that that they calculate will produce the most profitable yield. I don't know what the current fees and taxes are, but for sake of argument, let's keep it simple and say that they're $75 for this ticket. So, if that amount is reduced to, say $50, by new user fees that put a heavier burden on business aviation, then that's an additional $25 that can be added as pure fare price to achieve the same pricing point. This flight operates with a typical load of 100 pax. That means that this flight would now produce an additional $2500 of profit. That is why the ATA is pushing so heavily for this user-fee system. From our perspective as labor, this is additional profit that we can negotiate for in our next CBAs. Remember, this is a business that hasn't been able to pass costs on to the customers as other businesses can. Any fees and taxes mean that the airline has to reduce their profits to cover these costs.

 

[DornierPilot]

Furloughed,

I don't think the Administration will pull the pin on the Veto. I think he's bluffin' !

Re: the User Fee debate - I'm not willing to bet our current system to go the way of the Europeans. The fees have devastated their personal flying. Here's a quote from AOPA that explains alot:



Erik Lindbergh, criticized the FAA/airline-backed funding bill that would increase GA fuel taxes and add new user fees.

Recalling his transatlantic flight in 2002 commemorating his grandfather's achievement, Lindbergh said that while he was over the ocean and out of VHF radio range with air traffic control, he asked an Air Canada flight to relay a deviation request to Shannon, Ireland, air traffic control, to avoid towering cumulus clouds that were rapidly developing into thunderstorms. He was granted the amended clearance. And three months later, he received a bill for 80 Euros (about $109) for the ATC service.

"How would that affect safety? How's that going to affect the decision-making process?" Lindbergh asked. "If an approach is in doubt, are you going to do a missed [approach] if it's going to cost you 50 bucks?"

Many European countries charge a fee for every instrument approach. Prudent instrument pilots will break off an approach — "go missed" — if they don't have a clear view of the runway environment when reaching minimums or are uncomfortable with the progress of the approach.

AOPA believes that if any user fees are introduced for any segment of aviation, those fees will eventually trickle down to GA, just as they have in Europe and other countries.