It was a major show of unity on the part of the so-called alphabet groups — leaders from four of them testifying on Capitol Hill Wednesday, all adamant against the possibility that user fees will be imposed on general aviation in America. The Bush administration and FAA, with backing from think tanks like the Reason Foundation, are fast building a case to charge user fees for air traffic services, a movement NBAA President Ed Bolen centers on the contention that “general aviation isn’t paying its fair share.” It was an impression that Bolen, AOPA President Phil Boyer, NATA chief James Coyne and GAMA President Pete Bunce strove hard to dispel Wednesday.
“When people have looked at general aviation’s contribution,” Bolen told ANN after his testimony Wednesday evening, “they have only looked at the general aviation fuel taxes. They have completely missed the fact that there are portions of the general aviation community that are paying the commercial fuel taxes, the commercial ticket taxes, the departure taxes and the international departure taxes.”
When those contributions toward offsetting the cost of government aviation services and infrastructure, Bolen said, general aviation’s contribution to the Aviation Trust Fund jumps from $200 million (less than two-percent of the fund’s total revenues) to at least $600 million and up to seven percent of the fund’s income.
“I wanted to give (lawmakers) a different picture of how we pay and how much we pay.”
That was a theme repeated throughout the long day of testimony before the Aviation Subcommittee as one after another, Bolen and his fellow “alphabet group” leaders tried to dispel inside-the-beltway thinking on how the Aviation Trust Fund is bankrolled.
“What seems to be going around as convention wisdom is, ‘whatever your traffic levels are, that somehow equates to the cost you impose on the system.'”
That conventional wisdom, he said, has airlines shouldering 90-percent of the money going into the trust fund while less than 70-percent of the operations that fund pays for are actually incurred by the airlines.
Instead, Bolen said, airlines have put needless burdens on the system by starting up hubs in places like Raleigh-Durham or Nashville, then abandoning them a few years later. He also pointed to the remarkable costs of maintaining complex hub systems in places like Chicago.
“In fact, he said, “If you grounded general aviation tomorrow, the cost of the system would not go down appreciably.”
Are airlines, struggling to stay out of bankruptcy and still swimming in red ink, trying to balance their books on the backs of general aviation and business operators?
“Well, that certainly appears to be what they’re doing,” Bolen told ANN. “They’re certainly suggesting that they’re overpaying into the system. And they’re certainly suggesting that there are others who are not paying their fair share. They’ve been pretty clear about that being general aviation.”
It’s a refrain heard more than once over the past couple of months — airlines are trying to reduce their financial input into the aviation trust. Struggling against low-cost carriers, legacy lines such as United, US Airways and Delta are drastically cutting costs. They’re restructuring routes and demanding concessions from their employees’ unions. With few places left to turn and still hemorrhaging red ink, Bolen and other GA leaders believe the carriers are trying to shift aviation services costs to general and business aviation.
It’s an argument made increasingly as the ongoing financial slump among legacy carriers continues, even as passenger traffic continues to rise beyond pre-2001 levels. Fares have risen several times since the beginning of the year, but those increases have been relatively small and mostly driven by the skyrocketing price of fuel.
“It’s not fuel.”
That word from former Boeing CEO Harry Stonecipher (right), speaking to a civic group in Naples, FL, back in March. “Everybody says, ‘oh, it’s oil causing all this.’ Well, oil doesn’t cause that…. If you’re in the plastics molding business, [the rising cost of] oil probably affects you more than it does the airlines.”
If it’s not oil, or 9/11 or the outbreak of SARS that grounded travelers a couple of years ago, then what is it?
“Right now, if you look at the majors in this country… Delta, United, Northwest, American, US Air… you have a cost up here that 47-percent of is labor cost. Forty-seven percent up here,” Stonecipher said, gesturing around his own neck. “That’s where United was [before bankruptcy]…. And you’ve got JetBlue, Southwest, [AirTran} — those guys are down to 27-percent of their cost. If you’re going to succeed, you have to get that cost down there.” He pointed at his shoes.
Then there’s the issue of what services are used by the airlines and what are used by general aviation. AOPA President Boyer addressed that issue in an interview with ANN last month.
“Air traffic service,” Boyer said. “Do we need Class B airspace if there were no airlines? Absolutely not. It’s there for the airlines. We’re an incremental user. Is that control tower at the airport there for GA or for the airlines? I could go on and on. I think that debate is going to fall down to that kind of level.”
A Coordinated Effort To Defeat User Fees?
It was a rare thing to see leaders from three of the major general aviation groups on Capitol Hill in a single day — a “very long day” as some participants described it. But observers were surprised at the level of unanimity among the three major general aviation advocacy groups. Does this mean NBAA, AOPA GAMA and NATA might work together to defeat user fees?
“I think good communications and coordination between general aviation associations is essential. I think it’s really important that our community makes sure that we are in sync with each other and we understand the numbers — where they’re coming from and what they mean.”
Should the alphabet groups form an umbrella organization to show their solidarity on the user fee issues?
No, said Bolen.
“Sometimes, the more formalized you try to make things, the less nimble you are. I’ve got a really good personal relationship with Phil Boyer, Jim Coyne with Pete Bunce. I think all four of us get along really well. We can easily pick up the phone really quickly and call each other. I think that’s the easiest and best way… right now.”
FMI: www.nbaa.org, www.aopa.org, www.nata.org