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President’s Perspective

Coming Budget Battle Could Have Implications for Business Aviation

By Ed Bolen

NBAA President and CEO Ed BolenAs this edition of Business Aviation Insider was going to press, the business aviation community was gathering at the NBAA Annual Meeting & Convention, the industry’s largest event. In my address at the Convention, I reviewed the challenges, opportunities and trends that have shaped business aviation over the past year, and I noted that there is reason for cautious optimism in our industry.

Slowly, but surely, the leading market indicators of the health of business aviation have stabilized and begun to point upward. In addition, we have achieved several notable legislative victories. Working with Congress, we are forcefully opposing efforts to institute general aviation user fees, change the depreciation schedules for business aircraft, and impose the European Union’s Emissions Trading Scheme on U.S. aircraft.

Despite these victories, we cannot rest on our laurels, because significant challenges loom. For example, “sequestration” could pose a number of significant concerns for the industry. Under a law passed last year, if Congress cannot slash $1.2 trillion from the federal deficit before the start of 2013, mandatory across-the-board budget cuts will automatically be imposed on every federal agency.

Concerned NBAA Members have asked me what the impact on business aviation will be if we go off the so-called “fiscal cliff.” The fact is that we are in uncharted territory; no one really knows precisely what specific programs will be affected, or the extent of the impact.

That said, if the Federal Aviation Administration (FAA) suffers sizeable budget cuts, the effects on our community will certainly be adverse.

For example, lower budgets could mean the agency will have fewer resources and staff to certificate new aircraft, avionics and engines, or to review and approve applications for new products.

Aviation system modernization could also be impacted. As I noted in testimony to Congress in September, development of a new, modern air traffic control system (“NextGen”) is key to the continuing efficiency of business aviation. However, progress on NextGen could slow or stall if FAA funding were cut. In fact, it is hard to imagine that day-to-day operations of the current air traffic control system would not be adversely affected if money for controllers or facilities were slashed.

No doubt, the risks to the nation’s air transportation system posed by sequestration are serious, but business aircraft operators should be equally concerned about the inevitable attempt to balance the budget by raising revenue, especially through imposition of aviation user fees. Although NBAA Member Martha King testified before Congress in September about how user fees could devastate the industry, it is important that all NBAA Members make clear to their elected representatives that user fees are unacceptable.

Although our community has more than 200 allies in Congress who either belong to the House or Senate General Aviation Caucus, the pressure to raise revenue will be intense. NBAA will continue to oppose user fees, and I’m confident we can count on the people in our industry to contact their elected officials and do so as well.

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