Sunday, April 15, 2007

Don't buy
what they
are selling.


You don't need a Master's Degree in Calculus to discover some very large holes in the ATA/FAA/Airline's Next Generation Air Transportation System Financing Reform Act of 2007, a.k.a. the biggest threat to GA ever. No, to determine just how crazy this scheme is, we need to do two things, look at this weekend's headlines, and run the numbers.

Saturday, in headlines shouting from every large and small newspaper in the land, it was painfully clear that the ATA and the airlines have now succeeded in polluting the minds of all America via their cronies in the mainstream media. Here's a couple of prime examples:
Ticket taxes fund corporate jets

Passengers in Boston pay for
corporate jet landings in Berkshires
Based on what these widely-distributed wire service stories are spewing, the public is led to believe that those fat and happy CEO's lounging in the back of all those Gulfstreams, Citations and Falcons are getting a free ride. Their logic is quite the stretch, but now that these writer's opinions have caught ink nationwide, let's break down that concept, shall we?

They say we've been getting a free ride, but according to this article on forbes.com, that gravy train is about to reach it's last stop. You see, the administration's plan calls for the elimination of ticket taxes as the primary means of funding FAA, being replaced by user fees for aircraft operating inside Class Bravo airspace, and 50 cents a gallon additional fuel taxes.

Forbes says the revenue from ticket taxes last year brought in $11.1 billion to the FAA's trust fund. So all right, we give in to the airlines and eliminate that, so Average Joe no longer has to pay the bills for private air travel. Looking at the balance sheet, FAA is now $11.1 BILLION in the hole. Great.

Now let's calculate what a typical airline flight in a Boeing 737 from LAX to JFK will cost the airlines under their new plan:
Based on Boeing data, the 737-800 burns about 800 gallons per hour, and at 530 mph cruise, the 2,144nm trip will use up about 3,200 gallons. Under the old system – with 21.9 cents in tax per gallon of Jet A and no user fees – this flight would cost the airline roughly $700 in fuel taxes. And the cattle in back would have all paid 7.5% to the FAA in ticket taxes, which by the way costs the airlines nada.

But in their new scheme, the public pays nothing, the airline still pays $700 in fuel taxes because they are EXEMPT from the new tax increase, [see below], and will have to now pay the new user fees for ops into and out of class bravo. The FAA loses all the ticket tax money, and the airlines have to shell out several hundred more dollars each flight for terminal airspace transition, en route handling, WX briefings, etc. All so the ATA/FAA/airline coalition can penalize the relatively few bizjet owners who are allegedly skating through the sky now without paying their fair share.
Under the current system, the airlines are the ones getting off cheap, not private jet owners. That's because the public is paying the majority of FAA costs. Those ticket taxes the airline collects gets transferred 100 percent to the government, costing the airline not one dime.

This new FAA funding proposal looks to me to have major flaws, and without the ticket tax revenues in the trust fund pipeline, where will that $11.1 billion come from? I'd love to say it will come from the airlines now paying .50 cents a gallon in additional fuel tax for each of the millions of gallons of Jet A they burn, but according to AOPA, the airlines are EXEMPT from these new taxes:
On February 14, the Administration released its proposal for changing the funding mechanism for the Federal Aviation Administration. In short, here's what the administration proposal would do: It would raise general aviation gasoline taxes 366 percent to 70.1 cents per gallon (jet fuel is increased from 21.9 to 70.1 cents per gallon).
Notice there is no mention of the airlines paying any more in fuel tax.

Friends, we are being hoodwinked, bamboozled, screwed and cheated, all in the name of airline profits.

Don't buy it.