"FAA plan hits small planes"

["Stephen Irwin" <stepheni@xxxxxxxxxxxxxxxxxxxxxx>]

Thursday, May 3, 2007 

FAA plan hits small planes
General aviation in uproar; proposal would triple fuel tax
By Jane Roberts
The Memphis (TN) Commercial Appeal


To finance the nation's aviation system through 2017, the FAA is proposing
swooping changes in its funding structure, including more than tripling
taxes on fuel for small planes. 

The uproar among the general aviation community -- which includes all planes
outside commercial and military use -- has been loud and constant, according
to the Aircraft Owners & Pilots Association, which represents more than
411,000 pilots. 

"We surveyed our members before the FAA's proposal came out," said Chris
Dancy, spokesman. "At the level the FAA is proposing, 88 percent said they
would dramatically reduce or even cease flying." 

General aviation, which generates 16 percent of the cost of running the
nation's air system, pays 3 percent of the costs in a funding formula
subsidized heavily by taxes on passenger tickets, according to the Federal
Aviation Administration. 

To even the score, the FAA proposes a more than 200 percent tax increase on
both the jet fuel used by general aviation -- from 21.8 cents a gallon to 70
cents -- and gasoline for piston-powered planes -- from 19.3 cents to 70
cents -- bringing the price of both to more than $5 a gallon. 

The general aviation community has reacted "vehemently," Dancy said, because
its pilots rarely use the service of air traffic control towers or
contribute to congestion in the busiest airports. 

"General aviation tends to use excess capacity. We're not using the busiest
airports. In fact, we deliberately avoid them. We're not adding to the
burden at the airports, and we're flying routes that don't add to the
controllers' work burden." 

He likens the system to the nation's federal highways, subsidized in rural,
Western states by users in more populated areas. 

"The heaviest users of the system pay more than the lighter users," Dancy
said. "The aviation system is as fair as the highway system." 

The Federal Aviation Administration -- which runs the nation's air traffic
control system and funds airport improvements -- generates 70 percent of its
$14.5 billion budget through fees commercial carriers pay to use the
nation's busiest airports and taxes it imposes on fuel and tickets. 

Under a 1997 funding formula -- set to expire Sept. 30 -- passenger carriers
have paid the lion's share of the bill, largely through ticket taxes they
pass on to passengers. 

"The person in seat 12C, going to see Grandma, pays more in taxes than any
segment of the industry," said Doug Murphy, FAA regional administrator. "Up
to 25 percent of the ticket costs go to fund and finance the aviation
system, which is all well and good, except the airlines are responsible for
73.5 percent of the cost of the aviation system, but they pay 95 percent of
the cost. Therein lies the rub." 

The FAA says it needs to revamp the funding structure in order to have a
stable source of revenue for investments that include moving from
ground-based to satellite-based technology and improving airfield
efficiency. 

"If you're going to expand the growth of the system, you have to have more
runways or be more efficient in how they are used," Murphy said. 

Last year, the FAA spent $3.5 billion on airport improvements, including
millions at Memphis International Airport to extend Taxiway Yankee, creating
efficiencies for FedEx Corp., UPS and Tennessee Air National Guard. 

If the FAA tax proposal passes in both houses of Congress, general aviation
would foot 11 percent of the cost of the aviation system, still 5 percent
less than what it uses, Murphy said. 

"They still not paying their fair share, but it would be a larger amount,"
he said. 

The higher tax, on top of already rising fuel costs, would deal a
debilitating blow to small airplane owners or the companies that own them,
said David Ivey at Wilson Air Center, a fixed base operator that sells fuel
in Memphis, Charlotte, N.C., and Houston. 

"Any increase, in light of what's happening with fuel prices, is going to be
significant to the budget of flight departments," he said. 

George Cates, longtime Memphis businessman and pilot, says the proposal is
symptomatic of history of "bias against small planes. 

"They are perceived as clutter. They are not cluttering the major airports,
but they do feed the system," he said. "A lot of people are doing business
in these things that well might be crimped. Sooner or later, that limits
business." 

He also suspects a tax hike of this size could reduce the number of people
interested in becoming pilots. 

"They don't start out as FedEx pilots. They start out flying Cessna 152s,"
Cates said. "Somebody at the FAA better be thinking about where we are going
to generate pilots; computers aren't going to fly these things." 

Bob Wilson, inducted into the Tennessee Aviation Hall of Fame last year,
blames the commercial carriers for the huge expense it takes to run U.S.
aviation. 

"When the airlines pay back the $5 billion they got from the government for
9/11, maybe then there's some discussion we can have," Wilson said. "They
got all that money and still went bankrupt." 

At LaGuardia, JFK and O'Hare international airports, small planes are
allowed to land only in certain time slots, Wilson said. 

"As general aviation, we're almost pushed from those airports," he said. 

Murphy finds the argument that pilots would dramatically curtail flying "a
bit shallow." 

"For a Cessna 182, using six to eight gallons of fuel per hour of flight
time, the increase would be $3 to $4," Murphy said. 

In actuarial studies completed with the Massachusetts Institute of
Technology, the FAA says the hike would cost the average general aviation
pilot, flying mostly for pleasure, $400 to $500 a year. 

"I don't want to minimize it, but stop and think about the extra you have
paid for fuel for your car," Murphy said. 

If the proposal passes, general aviation planes will also be assessed
landing fees whenever they use the nation's 30 biggest airports, a new
charge the FAA would institute to ward of increasing congestion in a time
when air travel is growing nearly exponentially. 

Last year, 750 million passengers traveled by plane in the United States. By
2015, the FAA expects the number will be close to 1 billion. 

Both houses of Congress are working on their version of the proposal. By the
end of this week, the Senate aviation subcommittee is expected to have its
final draft, which it will pass to the Senate Commerce committee next week. 

Industry insiders say it includes a 49-cent tax on jet fuel but no increase
in aviation gasoline.

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