Tag Archives: James May

Passage of H.R. 915: industry groups ‘eerily’ harmonized… or are they?

Jim Swickard at Aviation Week has the following analysis in the wake of the FAA reauthorization bill passing the House:

The current FAA bill retains the FAA funding mix of excise taxes, fuel taxes and general fund contributions, but increases the general aviation jet fuel tax rate from 21.8 cents per gallon to 35.9 cents per gallon and increase the avgas tax from 19.3 cents per gallon to 24.1 cents per gallon. These were the same rates the Way and Means Committee endorsed in the previous Congress.

Industry groups stated their acceptance these tax hikes in lieu of user fees when they were proposed last year.

The Air Transport Association last year had complained vociferously that General Aviation was not paying its fair share of Air Traffic Control costs.  That argument was muted by AOPA, NBAA and NATA’s eerily gracious acceptance of the increased fuel taxes.

There are philosophical issues related to the U.S. General Fund contribution to the FAA and ATC budgets and the Obama administration wants to reduce that contribution and impose direct user fees after 2011, a prospect that would not upset the airlines. But that’s for tomorrow.

For now, all parties involved; industry associations, regulators and legislators can feel proud of their unity of larger purpose while not cluttering the playing field with their differences.  In other words, they have acted like aviators – to their great credit.

Can this collegial atmosphere hold through passage of a final bill by both the House and Senate, and the President’s signature?  Stay tuned.

Swickard’s view is compelling, though offset somewhat by the contents of a highly critical letter sent to Congress by ATA President James May (full text at Aero-News.net):

We have asked that Congress:

  • Expedite investment in and deployment of NextGen. The United States is at a critical juncture right now. Either we can accelerate the transformation of the ATC, to allow air transportation to grow in a safe and efficient manner while achieving environmental benefits, or we can risk bringing our economy and leadership in technology to a halt by failing to address our growing aviation capacity constraints. Leadership from the committee is needed to ensure that appropriate funding and program direction is in place to accelerate the deployment of this critical program.
  • Reject increasing taxes and fees on passengers. An increase in the maximum passenger facility charge (PFC) from $4.50 per segment to $7 per segment would impose an additional and unwarranted $2 billion tax increase per year on commercial passengers. With airport revenue eclipsing record levels – over $12.7 billion in 2007 – and with $27 billion in unrestricted financial assets, the imposition of an increased PFC tax is not only unwarranted, but also will further reduce demand for travel.
  • Protect our valued U.S. aviation repair facilities by ensuring that any requirements are applied in a manner consistent with U.S. obligations under international agreements. During recent conversations between U.S. trade associations and European officials, the Europeans have indicated that as a result of the current language in Section 303, many U.S. facilities would be subject to new, regulatory requirements by the European Aviation Safety Agency (EASA). Such duplicative, burdensome impositions are in no one’s interest.
  • Reject the automatic elimination of previously granted antitrust immunity (ATI) to carriers for international marketing alliances. DOT has approved international airline alliances because they produce numerous and substantial benefits, both to the public and the participating carriers. Arbitrarily terminating antitrust immunity will have a harsh impact on airline employees and cause a ripple effect across the travel and tourism industry at a time when the industry is already hobbled.
  • Maintain safety without requiring overly strict fire-fighting standards. Federal Aviation Administration (FAA) regulations have safely dictated staffing and equipment requirements for airport fire stations for years based on the needs within the airport boundary. Increasing staffing and equipment based on surrounding populations will not enhance airport safety but will increase costs unnecessarily. These are not legitimate safety claims and should be rejected.
  • Allow carriers to continue improving customer service without imposing unsafe or unreasonable deplaning requirements. In particular, we oppose a hard-and-fast rule requiring airlines to give passengers the option to deplane after three hours. Mandatory deplaning will have numerous unintended consequences that, ultimately, will create even more inconvenience for passengers and lead to even more flight cancellations.
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LaHood hints at possible equipage subsidies

From the Associated Press:

Transportation Secretary Ray LaHood said Thursday he thinks the Obama administration will seek financial aid for airlines to pay for equipment onboard planes that will be needed to move to a satellite-based air traffic control system.

LaHood, speaking at a luncheon of the Aero Club of Washington, said he expects the White House to “rally some dollars” in response to a request from airline industry officials who met with the administration’s top economic adviser, Lawrence Summers.

“I could tell from just talking to Larry today that those of you who met with Larry Summers really made an impact on him,” LaHood told the audience of 700, which included many airline industry officials.

“I believe you are going to see some movement here on the part of the administration, on the part of Larry Summers and certainly from our point of view, to see if we can really rally some dollars and get some of these dollars that are necessary to get us to NextGen,” he said. [..]

The meeting with Summers … included James May, president and CEO of the Air Transport Association, which represents most large airlines, and officials from United and Southwest airlines, said an industry official who asked not to be named because he wasn’t authorized to speak publicly.

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