Aviation 'Little Guys' Facing Higher Taxes and Fees Under FAA Proposal
July 24, 2009
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  • By Steve Porter

    The Bush administration, through the Federal Aviation Agency, is proposing that the nation’s general aviation industry, particularly the segment that uses smaller regional airports, cough up a lot more of the money needed not only to improve and expand those airports, but also to pay for the cost of the nationwide air traffic system.

    The FAA has been trying to shift more costs of the air traffic control system to general aviation for a long time.

    The fact that the laws pertaining to funding of the FAA expire in September has brought a new urgency to the agency to propose new funding formulas in its budget requests to Congress.

    The proposal would achieve this shift in financial responsibility by increasing taxes and fees on general aviation and by reducing subsidies that often are used for airport construction and operation.

    It could mean a significant cost increase for some small airports and many aircraft owners say they’ll have to stop flying.

    The estimated overall cost shift from commercial airlines to the general aviation industry would be $2 billion. As one might expect, the airline industry is all for it.

    “These taxes would saddle a huge burden onto South Carolina businesses, and drastically limit access to services such as specialized medical care, educational institutions and business resources,” said Rick Ott, senior vice president of the M.B. Kahn Construction Company and a member of a new organization formed to fight the FAA plan.

    Ott estimates that general aviation in South Carolina alone is a $400 million industry.

    The busiest general aviation operation in Horry County is at the Grand Strand airport in Windy Hill, which used to be the Myrtle Beach area’s commercial airport.

    It is home to dozens of private aircraft and a favorite way station for corporate and, in some cases, government and military aircraft.

    It just recently completed construction of a new hangar and ground facilities. Its pilot and passenger lounge facilities have been significantly upgraded because of increased traffic through the Fixed Base Operator, Ramp 66, and from individual aircraft owners at the airport.

    There is also flight instruction at the airport. It, along with everything else at the airport, would probably go up in price if the FAA gets final approval for its proposal.

    The same story exists at the Conway airport, where there are significant flight instruction operations going on every day of the week.

    At Loris, however, there’s not much there but an airstrip, although it does provide a convenient landing place for local pilots. It can be used in an emergency by many aircraft short of airliners.

    Georgetown’s airport is also in an expansion mode and may soon have a longer runway to allow more private jet users a more convenient landing spot for the growing number of upscale community residents in the county.

    The FAA’s argument is that general aviation has long been getting a virtual free ride on the nationwide air-traffic control system.

    In a statement released a few weeks ago, the FAA stated that general aviation “drives approximately 16 percent of the costs of air traffic services.”

    At the same, it said that general aviation contributes only 3 percent to covering air traffic.

    It is proposing that costs to general aviation be increased to 11 percent, with 10 percent coming from jets and other high performance aircraft and only 1 percent from piston aircraft users.

    This, said the FAA, shows that the complaint that the proposal would force GA (general aviation) to pay more than its fair share of FAA costs is a myth.

    The agency wants to recoup the money for air traffic costs by, among other things, charging more for fuel at regional airport GA operations.

    Its proposal would hike the current cost of fuel for a piston driven private aircraft by $4 an hour of flight time, or an average increase of about $500 per year.

    Would that force some small aircraft owners to give up taking their families on a budget vacation?

    The FAA has an interesting answer, “Reducing the current GA subsidy may result in some rationalization of behavior, but we do not believe the changes will be dramatic.”

    The agency also denies that a sharp increase in fuel charges will destroy service into small regional and community airports.

    It says that instead, its proposal protects service to small communities.

    “The general fund would pay for towers at all airports with fewer than 100,000 commercial enplanements, which includes all airports that qualify as rural airports,” it said.

    Towers, of course, are the base building blocks of the nationwide air traffic control system. The largest cost is making sure they are manned with trained air traffic personnel.

    Opposition to the FAA proposal has been intense; the lion’s share, as expected, coming from the general aviation side.

    Just after the FAA revealed its intentions, general aviation owners across the nation formed an organization called Alliance for Aviation Across America. Its membership includes a wide spectrum of airplane users from corporations to farmers.

    One of the victims of the FAA proposal, according to the Alliance, would be aviation provided medical and emergency evacuation services, not to mention aviation related and aviation dependent smaller companies that have to spend a large part of their budgets on aviation in order to stay in business.

    “This proposal would not only take away general aviation jobs and penalize small businesses, but dramatically harm entire support industries and the South Carolina economy as a whole,” said Ott.

    The nation’s most influential pilot’s organization, the Aircraft Owners and Pilot’s Association has also weighed in on the issue.

    It is especially opposed to giving the FAA the freedom to raise fees on general aviation.

    “The AOPA remains vehemently opposed to the imposition of user fees on any segment of aviation because once the precedent is established, user fees will inevitably be applied to all,” it said.

    At the present time, there are two bills in the U.S. Senate pertaining to the issue and a new one is expected to be formed in the House of Representatives this month.

    Date: 2007-06-06