Aviation Issues: ATC and FAA Funding – the Debate Heats Up

Aviation Issues: ATC and FAA Funding – the Debate Heats Up

Aviation Issues: ATC and FAA Funding – the Debate Heats Up

On May 23, the White House released a detailed budget for the Fiscal Year 2018, which included plans to cut $300 million from the FAA’s budget and a tax structure to assist in developing an independent, user-funded air traffic control (ATC) organization. Calling the House proposal, spearheaded by House Transportation & Infrastructure Committee chairman Bill Shuster (R-PA), an “excellent starting point,” the White House plan outlines a multi-year process to transfer the day-to-day ATC control to a new “non-governmental, non-profit corporation,” and calls for the government to continue to regulate safety.

A week earlier, Defense Secretary James Mattis wrote in a letter that the Department of Defense (DoD) is “supportive of possible privatization,” though acknowledged the potential risks that it could create for national security. In response to that concern, the letter said that a committee of Combatant Command and military department representatives had been formed to assess the current ATC relationship between the DoD and FAA “to delineate the linkages that would be necessary to a privatized ATC entity.”

President Trump followed up the release of the budget with a press briefing where he laid out his vision for the private ATC organization that would be run by an independent board appointed by the Transportation Secretary and fully funded through the collection of user fees. Under the White House proposal, the fees only recourse would be reviewed by the Secretary of Transportation and the determination of the secretary would be “final and not subject to judicial review.”

It was reported by many national news organizations and Capitol Hill outlets that on June 19, more than 100 CEOs, many of whom are also pilots, sent letters to U.S. House and Senate leaders to weigh in on privatizing ATC, noting that “our nation’s airspace belongs to the public, and every person, business and community should have fair and equitable access, not just a few special interests in select cities and metropolitan areas.”

The proposal was also predicted to face an uphill battle on Capitol Hill, as it did. On June 21 in the House, Transportation and Infrastructure Chair Shuster unveiled its new ATC reform proposal which is included in a comprehensive six-year FAA reauthorization bill. Based on its proposal from last year, but with a series of compromises for critics, the new reform proposal’s plan still includes a new ATC organization run by a board, but the 13-member board would include one seat each given to people nominated by Part 121 carriers, cargo carriers, regional carriers, airports, business aviation and general aviation, along with air traffic controllers and pilot unions. The DOT would be allowed to appoint two members and two “at large” seats would be reserved for people with financial backgrounds. The board would also be led by a CEO.

Addressing the fee structure, last year’s proposal had exemptions for general aviation but would have assessed the user fees for Part 135 operators. The new proposal recommends Part 91 and 135 operators would pay the existing excise taxes to support the remaining FAA functions and the Airport Improvement Program. The $4.10 per-segment passenger fee and international overflight fees, still seem to remain included.

The airline ticket tax would transition to a user-fee system for Part 121 carriers to fund the new organization, with a two-thirds super majority vote of the board required to raise the airline user fees. The proposal also included language guaranteeing access for small operators and small communities to establish a three-part oversight process. Shuster planned to bring the bill up for committee review on June 27 and reach the House floor by mid-July.

In opposition of the proposal, several general aviation groups – the Aircraft Owners and Pilots Association (AOPA), Experimental Aircraft Association (EAA), National Business Aviation Association (NBAA), National Air Transportation Association (NATA), General Aviation Manufacturers Association (GAMA), and Helicopter Association International (HAI) – showed unity in a joint statement that expresses in part:

“After a thorough and detailed review of Chairman Bill Shuster’s (R-PA) proposal to remove our nation’s air traffic control operations from the Federal Aviation Administration (FAA), we have concluded that these reforms, while well intentioned, will produce uncertainty and unintended consequences without achieving the desired outcomes.

We believe Chairman Shuster has raised the issue of reform in a meaningful and thoughtful manner and while we enjoy the safest most efficient air traffic control system in the world, we also believe that reforms, short of privatization, can better address the FAA’s need to improve its ability to modernize our system.”

The following day, the Senate released its version of the FAA Reauthorization Bill introduced by Senate Commerce, Science and Transportation Committee Chair­man John Thune (R-SD). At the writing of this article the details of the bill had not yet been posted, but according to NBAA President Ed Bolen, “In addition to targeting support toward implementation of a Next Generation (NextGen) aviation system, the bill addresses several other priorities identified by NBAA and other organizations, including provisions for streamlining the certification process for aviation technologies, enhancing aviation safety and integrating unmanned aircraft systems into the National Airspace System.”

Bolen continued, “Also notable is the Senate bill’s lack of controversial language to privatize ATC oversight. NBAA has long had significant concerns with the notion of privatizing ATC, which would turn control over the ATC system – a natural monopoly that currently serves the public’s interest, and is overseen by the public’s elected representatives in Congress – to a new entity governed by private interests.”

As the debate heats up, it may only be a matter of time before there is an FAA Reauthorization Bill that can be signed and one we can hopefully agree is fair for all parties involved.

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