"Transforming air travel"

["Stephen Irwin" <stepheni@xxxxxxxxxxxxxxxxxxxxxx>]

Monday, May 21, 2007

Transforming air travel
By Rachel Tobin Ramos
The Atlanta (GA) Business Chronicle


A proposal to dramatically reform the nation's aviation system has private
pilots and small airports in a dogfight with big airlines. 

The Georgia Airports Association says the proposal by the Federal Aviation
Administration would hurt economic development in rural areas. They say new
user fees the FAA would like to impose on small jets and planes would put a
damper on private air travel and hurt business. 
 
The FAA counters that the U.S. aviation system needs an overhaul, and that
changes are critical to reduce aviation congestion and improve passenger
airline travel. 

The current regulations and taxes expire Sept. 30. 

Specifically, the FAA says demand for travel is far outstripping the
aviation system's resources. By the year 2015, commercial air travel is
expected to grow to 1 billion passengers, from 738 million in 2005. 

The FAA says it needs to transform the aviation system from relying on
ground-based navigation to one that uses new technologies, such as global
positioning systems. 

New funding sources -- and different taxation methods -- can generate funds
to develop "Next Generation" air traffic control systems as well as develop
airport facilities, the FAA says. 

On May 15, officials from the FAA and U.S. Department of Transportation
underscored that notion in Atlanta, saying the city soon will outgrow
Hartsfield-Jackson Atlanta International Airport -- already the world's
busiest airport -- and need a second commercial airfield. 

For the average airline passenger in the middle seat, who wins the contest
could determine how much they pay for commercial airline tickets. 

The FAA bill, as introduced in the U.S. House of Representatives on Feb. 14,
would reform the taxation and fee system for users of the aviation system,
from crop dusters to commercial jets. 

But, general aviation consumer groups say that if the FAA bill, called the
"Next Generation Air Transportation System Financing Reform Act of 2007,"
passes, it could hurt the economic development of rural areas, which are not
served by the nation's large commercial airlines. 

Groups aligned against the bill include the National Business Aviation
Association, Aircraft Owners and Pilots Association, National Air
Transportation Association and Experimental Aircraft Association. 

In a recent interview, the FAA's Southern regional administrator, Douglas R.
Murphy, said the reforms are a way to bring fairness into the aviation
system. 

Under the current system, Murphy said, commercial aviation users -- such as
Delta Air Lines Inc. and AirTran Airways and their customers -- pay about 90
percent of the cost of the aviation system but use only about 73.5 percent
of it. 

General aviation users, by contrast -- including corporate jets and private
pilots -- pay about 3 percent of the costs of the system, but use 15.6
percent. 

Those costs, which are funded primarily through a 7.5 percent ticket tax,
allow the FAA to pay for the nation's air traffic controllers and airport
infrastructure, such as new airports and runways. 
 
Under the FAA bill, that tax would be replaced by set fees for a leg of a
flight and for using terminals. 

The FAA's yearly budget is about $14 billion. 

Murphy says the proposal spreads the costs among users more fairly. 

"I'm comfortable in saying ticket prices will go down, because we'll be
spreading out the costs between all users," he said. 

"It's appropriate that everybody share in the cost of operating airports and
aviation infrastructure," agreed Delta spokesman Kent Landers. "And that
commercial customers don't bear all the costs and aren't unduly taxed to
fund projects that don't directly benefit their travel." 

But because many small pilots don't pay for tickets, they haven't been
paying the ticket tax. 

Under the new bill, they would encounter new user fees. 

In Georgia, there are 8,894 registered aircraft, according to the FAA. 

Pat Epps, president of Epps Aviation, which operates a charter and
maintenance facility at DeKalb Peachtree Airport, said the new fees would be
the equivalent of being charged every time you leave your house in a car. 

He said he has seen similar fees in Europe suppress "the freedom" of general
aviation. 
 
"There is a humongous difference of opinion" between the FAA and business
jet owners, said Epps. The FAA bill "could reduce the traffic that I'm
seeing and the business that Atlanta is seeing." 

He said it will also affect air travel for large Atlanta corporations, such
as The Home Depot Inc. and The Coca-Cola Co.. 

Small airfields, pilots and corporate jet operators are also saying the FAA
has been hijacked by the interests of large airlines. 

In a letter mailed May 15 to U.S. Sen. Saxby Chambliss, the Georgia Airports
Association -- a trade group led by managers of general aviation airports in
the state -- said that the new proposal has "serious drawbacks." 

Written by the group's president, Mike Van Wie, the assistant airport
director of DeKalb Peachtree Airport, the letter calls the FAA bill "unwise
aviation policy." 

"We are pushing our elected representatives to rework the system so that it
doesn't harm general aviation," said Van Wie. 

Epps also sent a letter to the Georgia congressional delegation. In it, he
writes, "Business jets get by on 4,000 to 6,000 foot runways and the light
Cessna much less, while the airlines need 7,000 to 12,000 foot runways." 

In other words, he said, small jets need less infrastructure. "The FAA needs
a better count on where we're not paying our share," he added in an
interview. 

Van Wie, however, said it's true that the current system isn't "fair." 

But, what's being forgotten, he said, is that large airlines don't serve the
communities that small aircraft do. 
 
"They totally discount the tens of thousands of small businessmen that use
their airplanes to fly from PDK to Macon, from Rome to St. Simons. Those are
the venture capitalists that can make a difference in that community. The
very cornerstone of economic development in a state like Georgia or anywhere
else is their ability to do their business in a cost-effective way." 

In short, he said, a little bit of welfare from the large carriers -- and
their customers -- goes a long way toward the economic development of the
state's rural areas. 

But one expert doesn't buy that argument. 

"It's utter nonsense," said James Burnley, the head of the transportation
practice at the law firm Venable LLP in Washington, D.C. 

"The bill will make zero difference on small communities. It will have no
impact." 

Burnley was U.S. Secretary of Transportation from 1987 to 1989. 

He's seen this issue brought up over and over for about 15 years. 

In his view, corporate jet owners can afford increases in their fees. 

"I have seldom seen an issue where more smoke is getting blown by the very
able lobbyists for a group, i.e., corporate aircraft," Burnley said. "People
who hardly need welfare support and are already subsidized. You talk about
crying wolf." 

FAA Regional Director Murphy agrees: "Their argument is shallow but they've
had a nice ride for the last few years." 
 
Before it gets simpler, however, the issue will get more complicated as it
winds its way through Washington. 

The U.S. Senate has already rewritten the FAA bill, which was scheduled for
a May 16 meeting of the Committee on Commerce, Science and Transportation.
And the House is expected to craft a new version as well. 

In fact, Delta CEO Gerald Grinstein said the Bush administration's bill --
the one that has riled up Van Wie and Epps -- was "dead on arrival" because
he knew it would get rewritten by the Democratic Congress. 

Still, Burnley said he's seen the general aviation community prevail on this
issue for 15 years. 

That's unfortunate, he says, because they are getting subsidized by the
airlines. "And our airlines are not in great shape." 

For Murphy, the goal is to "raise the level of awareness" that change is on
the way and "encourage and foster a dialogue to come up with a proposal for
everyone." Including the passenger in 12C. 

"I would suggest to you that the robust debate is good for us," said Murphy.
"We have an opportunity to make a meaningful change so that the world's best
aviation system stays that way." 

Atlanta's airplanes 

Number of aircraft registered with the FAA for 10-county metro area 

Fulton 1,181 
Cobb 580 
Gwinnett 492 
DeKalb 474 
Fayette 303 
Henry 213 
Cherokee 177 
Forsyth 123 
Clayton 88 
Douglas 77 

Source: Federal Aviation Administration
(registry.faa.gov/aircraftinquiry/state_inquiry.asp)

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