I know, I know. The subject does not exactly spark visions of enjoyment, but trust me, this is interesting, because it impacts how much you’ll pay when you fly.
It’s that time again where the FAA comes up for reauthorization from Congress. As usual, they’re slow in getting started with this thing. If it doesn’t happen by the end of September, passengers won’t pay taxes on their airline tickets. Hooray!
Now, don’t get too excited. This happened last time as well, but the prices didn’t change. The airlines just pocketed the difference until the reauthorization was pushed through. This time, there are a million things up for discussion, but the most important, of course, is how will the FAA be funded.
Currently, the FAA gets most of its funding through excise taxes. This includes a 7.5% tax on tickets plus a segment fee. There are also fees for fuel and cargo, and a few others as well. The FAA needs a ton of money to run the agency and to pay for the next generation Air Traffic Control system, so this is a pretty crucial decision.
Most airlines share the same stance here. They don’t like the excise fee system, because they say it doesn’t charge based on costs to the system. That’s a fair point. The ATA (Air Transport Association) has their PR campaign in full swing at SmartSkies.org. I’ll let the unbelievably obnoxious Edna tell the story from their point of view.
The argument, as you can see, is that a commercial jet pays a lot more than a corporate jet, but it’s not proportional to how much they each use the ATC system. Logic says corporate jets should pay more than they do now.
Under this plan, airline passengers should pay less than they do now, but they’ll still have to pay under the “the more you use, the more you pay” philosophy. The latest proposal suggests having a passenger tax that would go up with the number of departures (connection vs nonstop) and the length of the flights. Flights under 250 miles would be tax free. That obnoxiously leaves the DC-New York-Boston runs without tax, but the rest of the plan makes sense.
What about the other side?
They like to use the slippery slope argument. It’s one thing to charge corporate jets of the rich and famous, but let’s say that this trickles down to apply to all aircraft using the ATC system equally. Right now, the proposal would only apply to jet and turboprop aircraft, so the everyday pilot wouldn’t be affected. But opponents like to say that it’s inevitable that it will end up being charged to all aircraft.
If that happens, a private pilot who uses ATC on his little Cessna 172 would have to pay a ton of money. Of course, AOPA, the Aircraft Owners and Pilots Association, has its list of points in favor of keeping the current system. They say that if you charge too much for ATC, private pilots will fly without ATC services and that is more dangerous. The alternative is that they won’t fly at all and that’s not good either. They also say that it’s really easy and relatively cheap to collect the excise taxes so we shouldn’t create something more complicated that will have higher administrative costs.
In the end, there are two sides of the argument and both have valid points. Since I use commercial aviation and not corporate or general aviation, I should want the user fee since that should lower costs for airline passengers. And since the current proposal doesn’t tax piston engine aircraft, my pilot friends wouldn’t be affected either. Right now, I’m learning toward user fees, but I’m not completely sold on it. Write your comments below and let me know what you think.