The debate over who pays for what in the over-stretched and underfunded US air traffic control system has united an airline industry that all-too rarely can find common ground on the big issues, and the answer could help drive much-needed airspace modernisation

Just as every thing has its value, every thing and every service has a price. The two are rarely the same, and determining value as opposed to simply demanding a price is an exacting process. In the USA, airlines and the FAA are moving gradually and painfully toward the beginning of this process in two very different ways.

The carriers began with this premise: things that used to be “free”, or least included or bundled in the price of a ticket, like a soft drink, a bag checked kerbside, or a specific choice of seat, have value to the traveller, and by establishing an asking price, the airline can determine if the can of soda or the aisle seat has a real value. Just so with on-board meals, largely devoured by the revenue famine after the 11 September terror attacks. Two or three years later, when the airlines began asking economy passengers to pay for food that was once “free”, they said they were engaged in a search for truth, that is the true value placed by their customers of the soggy croissant or flaccid lasagne. The process may be less noble than a Socratic search for truth, but the airlines have a point.

The FAA has begun a similar process of trying to determine value and price as it moves to devise a new concept for charging its customers – the airlines, business aviation, and other users of the air traffic control system. As with the airline dissection of its value chain, the attempt is in early trial and is not proving easy. Most users and policy-makers would agree it is time to change the system developed over the last two decades, a system of a percentage tax, plus specified fees, imposed and collected by entities as varied as the agriculture authorities, security agencies and airports.

For the airlines, this complex menu, which in some cases can equal the price of the underlying ticket itself, is counter­productive. It serves to discourage business and as importantly it obscures the value chain. The value of the journey between Phoenix and Pittsburgh is not illuminated or informed by the fee charged at Chicago, where the passenger changes aircraft. And the single largest stream of revenue – a straight percentage tax on airline tickets – is drying up precisely because travellers know the value and the price of air travel so well that they are paying less for each ticket.

The major carriers, in their first such display of unity since just after 11 September when they went with collective palm outstretched to Congress, want to pay the FAA on an unbundled scheme based on clear principles such as “directly and proportionately linking system use with system costs”. In other words, they want charges based on the cost of providing air traffic services. Under the industry formula, the number of departures and the duration of flights, measured in terminal and en-route operations, would be the basis for most fees, and the system would not discriminate by aircraft size or weight, purpose or commercial status. The FAA has spent most of a decade determining what its costs are and now has a detailed idea of what it would charge to cover its expenses. Objections thus would be political or philosophical, not technical.

The carriers make a brave claim here, too, as they are looking for equity, not a discount or tax break. Their approach would just happen to lower the airline bill by as much $2 billion a year, a difference that business and general aviation jet users would make up. Their approach would likely lower the amount that flows into the FAA every year and that may not be such a bad thing.

By forcing the FAA to rely on users who have deeply rooted self-interest, the airlines’ approach would force the FAA into limiting services its customers do not value, such as the rapidly ageing and expensive infrastructure system of traditional navigational aids that create fixed airways. It could instead force it to turn to reliance on more modern flight-management systems, aircraft-to-aircraft (ADS-B), and satellite navigation systems that are already on most airliners. This would compel the FAA to move toward the next stage of navigation, just as a 1980s revolt by general aviation helped push the agency towards the satellite-based global positioning system.

It is too pat to say that change of this magnitude would push airspace management into this century, but thinking about who pays how much to whom for what – whether it is the flyer buying or not buying a bite, or the airline paying less because its fleet is capable of precision navigation techniques – is an important step toward determining who values what. ■

Source: Airline Business