6/28/07
Radio Interview with host Tom Berryman and guests Niel Ritchie of the League of Rural Voters, and Robert Grierson, of the Dubuque, IA Regional Airport.
Host: Welcome everyone to this issue of “Voices of the Tri-States” Dubuque’s radio magazine. We welcome your phone calls, as we do with every interview: 690-1370 is the phone number to use.
Planning any flying in the future? Well, for now, a rhetorical question. We’re going to get back to it in a moment. But first this update from several interviews we’ve done on the past on scams and fraudsÉÉ
Unrelated story
And now to our cover story: There’s a bill in Congress that could affect how much people pay to fly in and out of airports like Dubuque Regional Airport. There is an effort underway to shift user fees onto smaller airports and to general aviation and away from commercial airlines. With us in studios is Robert Grierson, manager of the Dubuque Regional Airport and by phone, Niel Ritchie, executive director of the league of rural voters. So welcome to you all. A question first of all for both of you – the Bush administrations says the extra funds are needed to cover the cost of the Federal Aviation Administration, the FAA. At first I though, what’s wrong with that? The people who use are the people who will pay and that sounds fair. But maybe it isn’t as it seems. First let’s go to Robert Grierson. Robert, how would this affect airports the size of Dubuque?
Robert Grierson: Well, the bill as proposed by the administration would put an incredible amount of new and increased taxes on the aircraft owners and users. I’m not necessarily talking about the large air carriers, but when you look at the Dubuque airport, for example, 95 percent of total operations tend to be light general aviation aircraft. These could be anything from business aircraft used by companies like Flex Steel and American Trust as well as aircraft used by the University of Dubuque and personal flyers. What they’re looking at from the administration’s purposes is to increase fuel taxes for aviation gasoline from 19.1 cents a gallon to over 70 cents a gallon, and for the turbine users from approximately 21 to 48 cents per gallon. So that is a massive tax jump.
Host: Alright, I want to go to Niel. Now you’ve managed statewide and congressional campaigns in the Midwest, you’re author of a number of articles and opinions on food, farm, and rural economic policy. The League of Rural Voters is working to create change by working through the ballot box. How is something like thisÉ I guess, in a sense, why would your group be interested in it?
Niel Ritchie: We’re interested in it because it’s going to have a significant economic impact to rural communities that are already challenged trying to develop environments where small businesses can grow and thrive and trying to attract new businesses. So much of the emphasis of this shift is really taking a fair tax system on fuel, which is paid predominantly on the airlines, and it’s for the air traffic control system which they use, and it’s shifting it onto general aviation and the small aircraft disproportionably. It’s a windfall for the big airlines and its putting an enormous amount of financial pressure on companies in the small and regional airlines.
Host: Alright, just to give people an update, the fees that would likely be accessed would be things like weather briefing fees, flight planning and filing fees, landing fees, security fees, other airport services fees, written test exam fees, airline certificate issuance and renewal fees, aircraft airworthiness and modification approval fees, and potentially there could be a fee for any contact with the civil aviation agency. I can see with both of you gentlemen that this could have a real impact and Niel with you, for the rural voters, this could impact people that go out and do crop dusting, couldn’t it?
Niel Ritchie: Absolutely. Crop dusting, farmers and ranchers, many of them who have their own planes and rely on them to manage their businesses, even emergency services in some cases. And you know, the part of this that I think is the most unfair is that when we deregulated the airlines and when universal service was taken away from so many of our small regional communities and regional centers, this was part of the bargain. We would try and maintain a level playing field and to provide some kind of equity. This is really adding a burden that violates the trust that there was at that time so we feel pretty strongly about this.
Host: Robert, when I went through those fees, how much could all of those together affect someone who wants to take a short ride in his airplane? How much more could they be paying just to do that?
Robert Grierson: Well, the model that the FAA is looking at, regretfully, is Europe. Now keep in mind that 90 % of the aircraft owned and operated are in this country, not in Europe, but they’re intent on using Europe as an example. The aircraft owners and pilot’s association has visited Germany and analyzed their fee structure and estimates that it will cost anywhere from 100 to 250 dollars per flight just in user fees. And this is one of the proposals by the administration.
Host: Alright, but why are they using Europe as a model? Just because they’ve done it? In Europe they’ve practically driven general aviation out of business, haven’t they?
Robert Grierson: That’s correct. Europe has really put a damper on not just in cost of fuel for aircraft but availability of areas for landing, fees for operating, the general climate for aviation as a whole in Europe. So why they’d use it as an example is really beyond me.
Host: And some of the fees, I’ve read, are mandatory whether you use the service or not so you don’t even have to get out of your chair – you’re still going to have to pay it.
Robert Grierson: Correct. If you’re planning to utilize the air traffic control system, or access the air traffic control system, you will have had to follow it a couple of steps, associate it with weather briefing, filing flight plans, getting your clearances and things like that. Those are all steps that will occur even before you start the aircraft engine.
Host: Niel and Robert, let’s bring our listeners up to date. There is an administration proposal, or there was an administration proposal, there is a proposal in the Senate and a proposal in the House and there’s going to be some kind of conference committee, but let’s look at the three. First of all, when the administration proposed it, Niel, right away, did the League of Rural Voters come out against it?
Niel Ritchie: We did. We had been expecting this proposal and it was clearly indicated. What we weren’t expecting was the Senate Commerce Committee to embrace it so readily and there was a lot of activity, a lot of lobbying, to try and explain the impact this was going to have and it narrowly passed the Senate Commerce Committee. And there’s a proposal not yet introduced in the House but will be any day now that does not contain the user fees, but we were sort of expecting this and we still don’t understand it exactly but we’re ready to take it on.
Host: Robert, you can bring us up to date, I think something just came out of the House earlier todayÉ
Robert Grierson: It was earlier this morning that the House released House Resolution 2881 which reauthorizes the FAA as well as the Airport Airway Trust Fund and of course the Airport Improvement Program. This is a very reasonable bill and I have talked with Representative Braley, who sits on the House subcommittee, on aviation extensively, and reviewing this it’s not quite as good a bill as the Vision 100 legislation was several years back, but it is consistent with what’s we’ve had since the 1980’s and 1990’s. Overall, this is a good bill. It shows a progressive rate of growth in available funding. It does not restruc
ture the taxing mechanism, and I think it really addresses the issue at hand, which is to support improvements to our air traffic control system, improvements to airports, while maintaining a fair and equitable taxing system.
Host: Where did the push begin with the Bush administration? Was it the national air-carriers that had been urging the administration to do something? Robert?
Robert Grierson: Well, you can actually trace this back to the 1980’s. There’s an organization called the Reason Foundation which has looked at a number of ways of how they view air traffic systems. They have come up with the user fee system, like I said, really going back to the 1980’s. It’s been rejected over the years, but for some reason it was embraced this go around by the FAA administrator and that’s the direction they’ve chosen to go with this. But one thing I think is important to note, in 1986 the Federal Aviation Administration was only funded at 31 % by these tax revenues. Today that’s over 60%. So they’ve had an increase in operating costs, which are coming from these funds. To them it’s important to ensure that there’s a strong source of revenue, for today as well as any growth or development they’re looking at.
Host: Niel, I want to bring you back into the conversation. Who do you look at as the culprits who have been pushing the Bush administration to shift from the commercial air carriers onto general aviation?
Niel Ritchie: Well, in addition to the FAA itself, obviously this is a proposal that’s embraced by the large commercial carriers. This relieves them of hundreds of millions of dollars of fees and pavements and shifts that burden directly over to general aviation. There is no doubt that this is a commercial aviation bill and that they are the chief promoters of it.
Host: Some may say, Niel, “If they shift that burden, is that going to lower my ticket to fly on say United or Delta or American?” What do you think?
Niel Ritchie: It seems highly unlikely. I don’t think we’ve seen any history with airlines or any other form of transport that has passed along those kinds of savings. And it’s a very small price per head, per capita, that’s true, but in the aggregate, and for the amount of the traffic that is generated, and the miles that are flown, there’s no doubt that the FAA system should be paid for by the airlines which use the bulk of the services.
Host: Well who’s running the FAA, Niel? Is it Congress? Is it the President?
Niel Ritchie: No, it’s an independent agency and Bob probably knows more about how it’s been set up and structured from an industry standpoint.
Host: Bob, who really has the influence in the FAA?
Robert Grierson: It’s really the administration. It’s part of the US Department of Administration. It is accountable to the president as well as it is to Congress.
Host: We’re going to take a break so please hang with us here on Voices of the Tri-states talking about a bill pending in Congress on user fees funding the Federal Aviation Administration. The time is starting to draw short when there has to be a budget in place. We’ll be back with more on Voices of the Tri-States in just a moment.
Host: Welcome back to Voice of the Tri-States talking with Robert Grierson, manager of the Dubuque Regional Airport, and Niel Ritchie, joining us by phone, is the executive director of the League of Rural Voters. The issue is concerning an effort to shift user fees onto smaller airports and smaller operations. I want to tell you gentlemen, beginning with you, Robert, this issue has flown, to use a clichŽ, under the radar. I mean, where has it been? I just became aware of it a couple weeks ago. This has been awful quiet. Why?
Robert Grierson: That’s a great question and I’d love to be able to give you an answer. I can tell you the administration came out with their proposal back in February and, as Niel alluded to, this was brought through the Senate Commerce Committee about a month ago. The House subcommittee on aviation released theirs this morning but you’re really not going to see much for coverage on it because most people don’t see how it’s going to affect them. The ten percent passenger ticket tax is going to remain in place, there’s not going to be any change in that. What it really comes down to is that it’s the turbine operators or the light general aviation operators who are going to be affected and there is a cry coming from that segment of the community but it’s not really hitting the public airways or print media.
Host: How about that, Niel? Why is it kind of been not as visible as other issues?
Niel Ritchie: Well, I think Robert has hit on part of it. It’s an issue that is in the background, the tax policy, thinking about fuel taxes. The proponents have done a good job of selling this as the way to achieve modernization and that it’s only fair. They made their case to the administration and that’s obviously where this started. But when you stack this up as part of a large budget and a much larger stack of policy issues, in the context of all that’s going on in fuel prices and the conflicts overseas and so forth, it’s hard to see how it rises to the level. I will tell you though that there are thousands of organizations, most of them representing small counties and small towns that have joined together in an alliance to push Congress on this. There’s a lot of lobbying that’s going on, in fact Senators Grassley and Harkin in Iowa in particular are going to be enormously important voices in this from their respective places in the finance and the agriculture committees.
Host: Niel, you’re calling us from Minnesota, right?
Niel Ritchie: Yes
Host: What kind of support is there in Minnesota among congressmen?
Niel Ritchie: We haven’t taken a poll yet among the congressional delegation. We do know that Senator Klobuchar voted for the proposal at the committee level and we have gone to work to try and understand the reasoning for why she took that position and we’re trying to gather up the data we need. I think there’s been an effecting lobbying effort on the other side, and some inroads were made convincing legislators that somehow general aviation is using a great deal more of the FAA traffic control services than they actually are.
Host: Robert, have you had a chance to talk with any officials with American Airlines? That’s the carrier that flies in and out of Dubuque.
Robert Grierson: Well, we talk on a regular basis but American has not taken any public opinion on this. They tend to leave it to the trade groups, the Air Transport Association, and the Regional Airline Association to act as their surrogates in this issue. Just as most of us in the general aviation realm tend to rely on the Aircraft Owners and Pilots Association and the National Business Aircraft Association to represent most of our interests.
Host: You know, in doing the research for this, one of things I ran across was I saw that list of fees to be assessed if the original legislation would go through and heard some stories that in Europe what they do is they, for instance, might have a pilot skip a weather briefing fee or maybeÉI don’t know how they would land somewhere else. But they are looking for ways to get around the fees. And I thought, skip a weather briefing fee? That’s kind of scary. What do you do if the weather closes in and you’ve been using visual flight rules? Could this happen in this country, Robert, if those fees were imposed?
Robert Grierson: Tom, I’ve got to tell you, I’ve been a pilot since 1974. I have over three thousand flight hours and, as an aircraft owner and an active pilot I will tell you: there are no cheaper people on Earth than a pilot.I have friends who have flown forty miles out of their way to save three cents on a gallon of gasoline. It’s our mentality. So, to tell you the truth, if they are going to be nickel and dime for every
step of the way and they’re comfortable with what they’re about to undertake, they’re not going to get a weather brief. They’re not going to file a flight plan. They’re going to fly visual flight rules. And if the weather were to decay during that route segment, bad things could happen. And yes, I could easily see that occurring.
Host: What reaction have you had, Robert, from corporate flyers? Do they really understand what the impact of this will be on them?
Robert Grierson: I don’t really think the word’s gotten out very well. I’ve got a meeting this evening with a number of our corporate tenants. I plan to bring this up and discuss this with them. The action which they take is going to be strictly on their own, but I don’t really believe that people are aware of what’s pending.
Host: Niel, what about the individual farmer out there on the planes? Do they really understand? Are the cognizant of the facts involved in this legislation?
Niel Ritchie: I think a few of them are, but I think the vast majority of them are not, and there’s an issue now to raise this issue up. We’ve done a lot of editorial meetings with newspapers throughout the region to begin to try and generate stories about this. With all of the information that flows every day it’s hard to sometimes cut through but I believe we’re starting to get some traction with it.
Host: Just north of Minnesota, of course, is Canada. Canada has implemented such a user fees system. How has that affected general aviation in Canada, Robert?
Robert Grierson: It’s really hard to assess at this point. It’s fairly a new process. Europe has a better example, or even Australia where it’s absolutely grounded general aviation. Canada, however, will charge you, even if you fly on airways between US cities which take you over Canada. So it is beginning to have an effect: a negative effect.
Host: You mean, say, you’re flying from Detroit to Minneapolis and you happen to fly into Canada, then you’re going to have to pay a Canadian user fee?
Robert Grierson: That is correct.
Host: How are they going to catch you?
Robert Grierson: While you’re utilizing their air traffic services, they’ve got your tail number and they’ll invoice you from that point.
Host: Boy that sounds rather drastic. Have you heard, Niel, any stories of what it’s done to general aviation in Europe and Australia and what it could be doing in Canada?
Niel Ritchie: Nothing more than what Robert has reported that in Europe it has done significant damage. I think in the world of competitive economy there are always going to be those who would prefer not to have competition, and that’s what we’re really talking about here. Shifting enormous burdens from commercial to general aviation to tilt the playing field in their favor and hopefully capture more of that revenue.
Host: If the user fees were shifted, Neil, would that really giveÉof course that would put millions of dollars in the pockets of the airlines and they’re not going to rebate it back to the consumer at all, would that help them recover from bankruptcy protection?
Niel Ritchie: I’m sure that’s part of the logic behind this approach and behind their thinking. I don’t know if it will have a significant effect on that. There are other challenges with the business model that have put them in the position they’re in and frankly fixing their business model at the expense of doing real damage to business aviation and hampering the development prospects of rural communities is not a trade off that we think has any future.
Host: Robert, and both of you, we have just a couple of minutes left. Robert, how does American commercial aviation stand up to European commercial aviation? We obviously have a lot more competition in this country, but have we as good air carriers as anywhere in the world?
Robert Grierson: Well if you talk to a European they’ll tell you they have a better system; if you talk to an American we’ll tell you we have better system. The open competition we have among carriers today has reduced fares to really their lowest level ever. I think more people have flown today as a result of that than have ever flown before. Our numbers continue to increase every year in terms of passenger traffic, so I’d say the American air carriers are doing a magnificent job of transporting people from point A to point B and there are of course some snafus in terms of customer service and support and things like that. But of course you can go to Europe and fly from France to Italy for as little as 49 dollars each way on Ryan Air. There are a lot of subsidies in Europe. Every system’s a little different.
Host: So Niel, what would you want our listeners to do in your field, and eventually they would be impacted by it in some way, what would you want them to do?
Niel Ritchie: I would urge them to contact their congressional delegation, their representative and their senators. Urge their senators to oppose the Senate file 1300 when it comes to the floor, and urge the House members to strongly support the House file that’s there and to stand their ground in conference.
Host: Alright, and Robert, they probably shouldn’t waste any time. September 30th is when the federal budget years ends and the new one begins so can they really have an impact at this point?
Robert Grierson: I think so. I think so. This is still just coming out of the sub-committee and the House, so it’s still going to have to go in front of the whole transportation and infra-structure committee, which is headed by Representative Oberstar from Minnesota.
Host: Is really the average person going to have a voice? I mean, they’re up against the commercial airlines.
Robert Grierson: They do listen.
Host: How about that, Niel? Is there still a chance to turn things around, or do the commercial airlines have too much of a head start?
Niel Ritchie: Oh no, this is totally up to the people at this point and they’re the only ones who’ll be voting in the fall.
Host: Gentlemen, thanks to both of you. I appreciate your time. Robert Grierson, the Manager of the Dubuque Regional Airport in studio, and Niel Richie, Executive Director of the League of Rural Voters who joined us by phone, thanks to all of you.