Funding to upgrade and maintain the USA’s national airspace system will rely on user fees, debt and increased passenger facility charges (PFCs) if a bill unveiled today by US Federal Aviation Administration administrator Marion Blakey is passed into law.
The funding programme, which is commonly known as the FAA’s reauthorisation, will also drop ticket taxes as part of the reform in favor of the “hybrid funding structure”.
In a press conference yesterday ahead of two days of Congressional hearings on the topic, Blakey said: “The bill will eliminate the domestic passenger ticket tax and reduce the international arrival and departure tax by 50%, reducing the overall burden to both the airlines and the travelling public.
“It will generate revenues based on the costs that users impose on the air traffic system, whether they are commercial, business or general aviation users.”
User fees are expected to generate 53% of the FAA’s total budget under this new funding scheme. “Our proposal gives FAA the authority to charge a limited, cost-based congestion fee for users who land at the nation’s 30 most congested airports to cover equipment, personnel, and other costs directly related to managing traffic in and around these facilities,” says Blakey, noting: “Users would pay modest fees to recover the cost of some FAA certification services since current fees are set well below the cost of providing the service.”
The FAA has previously said the user fee system will reduce airline costs by $1 billion annually as charges are shifted to general aviation (GA).
With this new fee structure users of the USA’s airspace will require more involvement, so the FAA will establish an Air Transportation System Advisory Board comprised of user representatives from across aviation. “The board would provide advice and make recommendations on the creation of user fees, major capital projects and the FAA’s strategic plan,” says Blakey. The administrator will still retain safety and regulatory responsibilities as well as the authority to set fees and the US Congress its oversight status.
A further 28% of the FAA future budget will come from a GA fuel tax already employed in the USA and the reduced international passenger taxes. “GA and piston users will pay their fair share of FAA costs through a fuel tax, their preferred mechanism. The tax rates are based on a detailed cost allocation, and would change every two years in line with an updated cost allocation study,” notes the FAA.
It adds: “All domestic commercial and GA users will also pay a common fuel tax of (3.6¢/litre) 13.6¢/USGal to fund AIP [Airport Improvement Program], the Essential Air Service program and FAA’s research, engineering and development account. International commercial passenger flights will pay a $6.39 passenger head tax to fund these services.”
An undisclosed amount of funds will also be allocated to research new engine and airframe technology to reduce aircraft noise and engine emissions.
A general fund to pay safety regulation, military use of the air traffic system and flight service stations will account for the remaining 19% of the FAA’s budget.
In addition to this funding system, the FAA is also proposing to relax current borrowing restrictions that will allow up to $5 billion to be raised from fiscal year 2013 through the US Treasury Department. This debt will be used to support the upgrade of the USA’s airspace infrastructure to the so-called satellite-based Next Generation Air Transportation System.
Funding of large and medium-sized airports through the FAA’s AIP will be eliminated under this new legislation. Instead, the regulator proposes an increase in the maximum PFC to $6 from $4.50, a move it says will generate an additional $1.2 billion annually for commercial airports.
PFC eligibility will also be expanded to include any airport capital investment that does not hinder competition.
“Our proposal will make it easier for airports, airlines and controllers to keep pace with the skyrocketing demand for air travel this nation is going to experience over the coming decades,” says Blakey.
“With over a billion passengers expected in the air by 2015, we have to act now or risk gridlock in our skies and on our taxiways.”
Adds US DOT secretary Mary Peters: “This new proposal will make flying more convenient for millions of travellers. Anyone who has experienced the frustration and inconvenience of a delayed flight should take a very close look at what we’re proposing.”
Blakey says she is encouraging Congress to act swiftly on the legislative proposal, noting that the current laws governing FAA funding expires on 30 September.