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Internet Travel Monitor - Events & Legislation
June 20, 2007
Air Fuel Tax Could Ground Private Fliers
Proposal Might Add Takeoff, Landing Fees
PLEASANTON, CA – Real estate broker Charles White believes a federal plan to boost funding for the nation's outdated air-traffic control system would unfairly burden private pilots and small-business owners.
Aviation officials are proposing a roughly 50-cent-a-gallon rise in the federal fuel tax for corporate jets and small planes.
"That's a whole big jump," said White, of Truckee, whose twin-engine Piper Apache uses about 15 gallons of fuel an hour. The federal fuel tax would increase to 70 cents a gallon, meaning White would pay more than $5 a gallon.
The plan also calls for a user fee, charged for takeoffs and landings, on general aviation aircraft. Based on the aircraft's weight, the fee would be in effect at the nation's 30 largest airports. But private pilots are worried that fees would soon expand to smaller airports.
Since the Bush administration released its aviation financing reform proposal in February, a debate has been brewing over who should pay for improvements.
A new flight plan
Federal officials say reform is needed to build new system that will handle nearly 25 percent more passengers by 2015. The Federal Aviation Administration estimates the nation's airports will handle about 760 million passengers this year, and 1 billion in the next eight years.
About 80 percent of the agency's budget comes from a 7.5 percent tax on passenger tickets, said FAA spokesman Ian Gregor. But because of changing ticket prices, the FAA wants to end the passenger tax and establish fees based on the system's use.
Commercial airlines support the plan, arguing their industry bears an unfair burden compared with general aviation.
But small-aircraft advocates say the fee proposal would hurt small airports, flight schools, private pilots and small-business owners, transferring billions of dollars of the airlines' tax burden onto businesses and small communities.
Scott Powell, president of Sacramento Jet Center, which refuels and services jets at Executive and Sacramento International airports, said the proposal stands to hurt his business and everyone who flies privately.
Powell sent a letter this week to Sen. Daniel Inouye, a Democrat from Hawaii and chairman of the Senate Commerce Committee, which recently presented another plan for funding a modern air-traffic control system.
The committee proposed a $25 a-flight fee on commercial planes and on the 10 percent of general aviation planes that use the system.
Sky-high fees?
Ed Callaway, president and chief instructor at Executive Fliers, a flight school at Executive Airport, said he is concerned fees would be handed down.
"If they impose fees on the airlines, it'll only be a matter of time before they start to ask for fees from the general aviation population," he said.
The FAA says existing infrastructure cannot handle future demand. Plans call for replacing the existing ground-radar with a satellite-based control system with an estimated cost of at least $15 billion.
Currently, general aviation accounts for 16 percent of the cost of operating the system but pays 3 percent of the tab, FAA spokesman Gregor said. At the same time, he said, commercial airlines account for 73 percent of the budget, but passengers pay for about 95 percent of those costs.
"It's a much more fair and balanced financing system than what we have in place now," Gregor said of the proposal.
Copyright 2007 American City Business Journals, Inc. All rights
reserved. From http://www.bizjournals.com. By Melanie Turner.
To view the Internet Travel Monitor Archive, click http://www.tripinfo.com/ITM/index.html.
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