US Airline PAX/Cargo Tax could be replaced with fuel tax by Sept 30
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US Airline PAX/Cargo Tax could be replaced with fuel tax by Sept 30
From the NY Times:
Judging by the quoted example, this sounds like a good plan. Funny, they didn't quote the cost comparison numbers for the proposed fuel tax.
WASHINGTON, Feb. 14 — The Bush administration proposed Wednesday to eliminate the tax on plane tickets and air cargo shipments, shifting the cost of the air traffic control system largely to user fees and increased taxes on fuel.
The proposal would shift some of the burden from airlines to corporate and private aviation. Because the plan would increase taxes on aviation fuels by 250 percent, even people who fly their own small planes would face higher costs, although they do not use air traffic control services so heavily.
In the highly organized world of aviation, nearly every group except the airlines reacted negatively.
The proposal would require approval by Congress, where the outcome is uncertain, though Congress is likely to take some action on aviation taxes this year because they are to expire on Sept. 30.
The Federal Aviation Administration, which operates the air traffic control system, said its far-reaching plan would charge extra for flights in congested places or at congested times of day. And it asked for the authority to auction landing rights at La Guardia Airport in New York, to reduce demand to a level the airport could accommodate without delays.
Marion Blakey, the F.A.A. administrator, said the proposal was “first and foremost of benefit to passengers,” but she did not estimate what the effect might be on ticket prices. She said a new financing plan was essential to developing and deploying her agency’s new system of air traffic control, which is to be based on satellite navigation and surveillance instead of radar and radio beacons.
But critics of the proposal, including groups that have wielded great influence in Congress, said that the plan was mostly a giveaway to the airlines, and that the agency’s stated goal, tying its income to the level of operations instead of to the price of tickets, was not sound. Because the overall volume of flights varies widely, they said, user fees based partly on the tally of takeoffs and landings are less predictable than percentage taxes on fares and freight tariffs.
In theory, the bulk of the F.A.A.’s budget comes from a trust fund, into which ticket tax, cargo tax and fuel tax revenues are deposited. The fund is at a 10-year low, about $1.8 billion. In practice, however, Congress has always appropriated money to the agency from general tax revenues, and at times has granted more than the executive branch has sought.
The F.A.A. is now also seeking the authority to borrow money to finance air traffic control. It envisions a 13-member advisory board, including four airline members, to consult on fees.
In the last decade, the Clinton and Bush administrations have advanced proposals to move the air traffic control system toward privatization, an idea generally favored by the airlines. Non-airline users of the system argued that the proposal offered on Wednesday was another step in that direction.
Today the main contribution of private planes to financing the air traffic system is a tax of about 21 cents a gallon on jet fuel. The airlines have been arguing that they pay nearly 95 percent of the system’s costs but use only about two-thirds of its services.
In one example, they say that a JetBlue Airbus A320 flying from Fort Lauderdale, Fla., to Washington pays $1,575, taking into account cargo, fuel and ticket taxes, while a Cessna Citation X, a large business jet, pays $87.
James May, president of the Air Transport Association, which represents airlines, said he did not understand why there should be any difference in what two airplanes pay when flying the same route.
But Ed Bolen, president of the National Business Aviation Association, said airline operations cost far more because airlines build hubs with extremely high traffic density, requiring far more equipment and air traffic controllers than are needed by business planes that fly to less-busy places and do not rush in all at once.
The proposal would shift some of the burden from airlines to corporate and private aviation. Because the plan would increase taxes on aviation fuels by 250 percent, even people who fly their own small planes would face higher costs, although they do not use air traffic control services so heavily.
In the highly organized world of aviation, nearly every group except the airlines reacted negatively.
The proposal would require approval by Congress, where the outcome is uncertain, though Congress is likely to take some action on aviation taxes this year because they are to expire on Sept. 30.
The Federal Aviation Administration, which operates the air traffic control system, said its far-reaching plan would charge extra for flights in congested places or at congested times of day. And it asked for the authority to auction landing rights at La Guardia Airport in New York, to reduce demand to a level the airport could accommodate without delays.
Marion Blakey, the F.A.A. administrator, said the proposal was “first and foremost of benefit to passengers,” but she did not estimate what the effect might be on ticket prices. She said a new financing plan was essential to developing and deploying her agency’s new system of air traffic control, which is to be based on satellite navigation and surveillance instead of radar and radio beacons.
But critics of the proposal, including groups that have wielded great influence in Congress, said that the plan was mostly a giveaway to the airlines, and that the agency’s stated goal, tying its income to the level of operations instead of to the price of tickets, was not sound. Because the overall volume of flights varies widely, they said, user fees based partly on the tally of takeoffs and landings are less predictable than percentage taxes on fares and freight tariffs.
In theory, the bulk of the F.A.A.’s budget comes from a trust fund, into which ticket tax, cargo tax and fuel tax revenues are deposited. The fund is at a 10-year low, about $1.8 billion. In practice, however, Congress has always appropriated money to the agency from general tax revenues, and at times has granted more than the executive branch has sought.
The F.A.A. is now also seeking the authority to borrow money to finance air traffic control. It envisions a 13-member advisory board, including four airline members, to consult on fees.
In the last decade, the Clinton and Bush administrations have advanced proposals to move the air traffic control system toward privatization, an idea generally favored by the airlines. Non-airline users of the system argued that the proposal offered on Wednesday was another step in that direction.
Today the main contribution of private planes to financing the air traffic system is a tax of about 21 cents a gallon on jet fuel. The airlines have been arguing that they pay nearly 95 percent of the system’s costs but use only about two-thirds of its services.
In one example, they say that a JetBlue Airbus A320 flying from Fort Lauderdale, Fla., to Washington pays $1,575, taking into account cargo, fuel and ticket taxes, while a Cessna Citation X, a large business jet, pays $87.
James May, president of the Air Transport Association, which represents airlines, said he did not understand why there should be any difference in what two airplanes pay when flying the same route.
But Ed Bolen, president of the National Business Aviation Association, said airline operations cost far more because airlines build hubs with extremely high traffic density, requiring far more equipment and air traffic controllers than are needed by business planes that fly to less-busy places and do not rush in all at once.
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The heads of both transportation commities in Congress say that the Dubya plan is dead in the water, before it hits bottom, after diving in.
APOA, which represents GA pilots, has sent 160,000 email/letters in opposion, and NBAA, which represents business jet aviation has hired big time lobbyists to kill the plan.
In short, it ain't gonna happen.
APOA, which represents GA pilots, has sent 160,000 email/letters in opposion, and NBAA, which represents business jet aviation has hired big time lobbyists to kill the plan.
In short, it ain't gonna happen.
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According to the the Times, they (the airlines) are saying nothing.
The math gives me a proposed burn of say 1800 USG from FLL to IAD. The proposed fuel tax on that is currently $450 and with a 250 pct increase only brings us to $1125 which is well below the quoted $1575 figure. Not bad.
Meanwhile we should take great pause when Marion Blakey (current FAA Administrator) says the proposal is "first and foremost of benefit to passengers."
One thing many have learned from her controversial tenure at the NTSB is to take anything that comes out of Ms. Blakey's mouth with more than a few tons of salt.
The math gives me a proposed burn of say 1800 USG from FLL to IAD. The proposed fuel tax on that is currently $450 and with a 250 pct increase only brings us to $1125 which is well below the quoted $1575 figure. Not bad.
Meanwhile we should take great pause when Marion Blakey (current FAA Administrator) says the proposal is "first and foremost of benefit to passengers."
One thing many have learned from her controversial tenure at the NTSB is to take anything that comes out of Ms. Blakey's mouth with more than a few tons of salt.
