GA Faults Report on Private Jet Travel
July 29, 2009
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  • By Paul Lowe
    Business Aviation, Aerospace Industry

    No sooner had the ink dried on a report by the Institute for Policy Studies and Essential Action (IPS/EA) claiming super-wealthy private jet owners are enjoying tax breaks and luxury at the public’s expense than general aviation stood up to vociferously disagree.

    The think tank’s report recommends imposing a “luxury tax” on private jets and “fixing” the FAA’s funding structure to require private jets to pay their share of the costs. The authors call on Congress to tighten security requirements on private jets and suggest government subsidies spent on fixing small airports that largely serve private jets would be better invested in high-speed rail as an alternative to short-haul air travel.

    “While air travel has become more expensive, uncomfortable and degrading for the rest of us, a growing class of ultra-rich Americans [is] fueling a boom in private jets and flying high on tax breaks,” said Chuck Collins, senior scholar at the IPS and coordinator of the Working Group on Extreme Inequality. “The surge in private jets has real costs to taxpayers, shareholders and everyday air travelers. These high fliers aren’t just living large on their own privilege; they’re threatening our environment, security and the cohesion of our country at our expense.”

    NBAA president and CEO Ed Bolen said the report, “High Flyers: How Private Jet Travel Is Straining the System, Warming the Planet and Costing You Money,” starts with a caricature of general aviation that has been heavily promoted by the airlines but bears no relationship to reality. “Then, it throws a barrage of baseless, over-the-top claims against the wall to see if anything sticks,” he said. “In the end, none of the allegations stick, because the report is both inaccurate and distorted.”
    AOPA commented that the report contains almost all of the discredited arguments the airlines have made in support of user fees over the past three years.

    “The air traffic control system is here for the airlines,” association president Phil Boyer told ABC News. He also noted that businesspeople using general aviation bring economic activity to communities, citing Wal-Mart – with its fleet of 40 corporate aircraft – as a company that uses its airplanes to be a leader in class.

    He further pointed out that the airlines have already tried all of the report’s arguments and nobody on Capitol Hill is buying them. “Both houses of Congress have rejected user fees in their FAA reauthorization bills,” he explained.

    The General Aviation Manufacturers Association agreed, saying that the report resurrects the well worn and worn-out airline industry claim that GA does not pay its fair share of the costs associated with ATC services when, in fact, the airlines themselves drive the costs of a hub-and-spoke model that was built primarily to meet their needs.

    “This report will get its 24-hour news cycle and then be retired to the trash can as uninformed slander of one of America’s most dynamic manufacturing industries, a contributor to quality jobs and growing export markets and a form of transportation that is safe, secure and avoids airline-created congestion, while providing travel options where airline service is contracting or is non-existent,” said GAMA president and CEO Pete Bunce.

    The Alliance for Aviation Across America also weighed in quickly, with information that countered many of the IPS/EA report’s claims. In a written response to what the alliance called “think tank propaganda,” it said that the report is a rehash of the big airlines’ discredited attacks on general aviation aircraft that are a lifeline to small towns and communities.

    “This inside-the-Beltway study does little more than promote an unpopular proposal that would have serious repercussions for small businesses and towns,” said Neil Ritchie, president of the League of Rural Voters. “By advocating for the big airlines’ bottom line over the economies of rural communities, the authors of the study are joining the airlines in a full attack on the very backbone
    of our country.”

    NBAA cited several examples as illustrative of the inaccuracies and distortions in the report. For example, the report says that “travel has expanded dramatically” when industry flight hours are basically flat. And it suggests that U.S. passenger airlines pay 95 percent of the ATC costs when they actually pay 77 percent of those costs.
    The report implies that GA aircraft are the only business equipment eligible for accelerated depreciation, when in fact all significant capital equipment is eligible for accelerated depreciation.

    NBAA said the report “praises European user fees based on aircraft weight and distance flown but ignores the fact that general aviation fuel taxes [already levied in the U.S.] reflect aircraft weight and distance flown without requiring a new government collection bureaucracy.”

    According to NBAA, the report also fails to acknowledge that the fuel tax creates incentives for development and use of cleaner, quieter, more fuel-efficient engines. “This report is 30 pages of nothing but outrageous claims and the warmed-over rhetoric used by the nation’s big airlines,” said Bolen. “It is unfortunate that at a time when businesses are struggling and communities are losing air service, we see political screed masquerading as a policy report.”

    GAMA noted that the report also claims that “small planes are by far the most polluting method of transportation.” Accusing the IPS/EA report of stretching the truth far beyond credibility, the association pointed out general aviation contributes less than two-tenths of 1 percent of overall greenhouse gas emissions, “not-withstanding IPS/EA’s facile and misleading comparisons with hybrid cars and transcontinental trips.”

    The Institute for Policy Studies describes itself as strengthening
    “social movements with independent research, visionary thinking and links to the grassroots, scholars and elected officials. Since 1963 it has empowered people to build healthy and democratic societies in communities, the United States and the world.”

    Essential Action says it “undertakes strategic projects to promote global public health, advance corporate accountability, support public sector investment and protect the environment.”

    Date: 2008-08-01