By Ed Bolen
February 7, 2007
For the giant airlines, Valentine’s Day comes early this year. The president’s budget, released Monday, is a sweetheart deal for the airlines. It would give them a massive tax cut, to be paid for largely by a “general aviation” industry that serves many of the nation’s small and midsized businesses and their communities.
In supporting the president’s budget, the airlines will likely defend their tax break as an opportunity to provide consumers with cheaper ticket prices. But, if history is a guide, this would be just another empty promise. Twice in the past decade, the airlines’ federal taxes lapsed and, according to a 2004 Government Accountability Office report, “carriers generally raised base airfares.”
Another driver of the airlines’ support for the budget is the advantage it gives them on funding and control of the nation’s Air Traffic Control (ATC) system. Considered the best in the world, the system uses an efficient “pay-at-the-pump” approach for fuel and ticket taxes that is consistent with widely accepted international standards. Yet, to hear the airlines tell it, we need a radical change that would, of course, let them pay far less into the ATC system. They propose taxing every aircraft at the same rate, whether it’s carrying four passengers or 400.
This argument, made by the airlines for decades, fails the credibility test with experts the world over, because the costs for our aviation system aren’t determined by a small airplane crossing an air traffic controller’s radar screen over Kansas at midnight. Instead, the system’s costs are driven by the airlines’ hub-and-spoke network, which moves hundreds of flights through big airports at peak travel times. That requires a massive amount of people, resources and infrastructure, so it makes sense that the airlines bear the costs.
Rather than working to shift their responsibilities onto others, the airlines should lobby for a budget that serves everyone’s interests. We hope the carriers will look past their own narrow agenda and join us in supporting a plan to truly modernize our nation’s aviation system.
Ed Bolen is president of the National Business Aviation Association, which represents companies that use small planes for business.
International Business Aviation Council Ltd.