A panel of staff members from key House and Senate committees indicated Wednesday that new aviation user fees are still under consideration and predicted that legislation reauthorizing continuation of FAA programs will pass Congress this year, although they acknowledged that tough decisions on how those programs will be financed remain to be answered.

FAA's current authorization will expire at the end of September, which marks the end of the government's fiscal year. While no one disputes the importance of keeping FAA programs going, there had been speculation earlier this year that the ambitious legislative agenda put forward by the Democrats in the wake of their November election victory might make it difficult to get FAA reauthorization through (BA, Feb. 12/69).

Appearing at the U.S. Chamber of Commerce Aviation 2007: Ready For Takeoff program Wednesday, Jim Coon, the Republican chief of staff for the House Transportation and Infrastructure Committee, noted that the committee has been "extremely busy" since beginning work in January and already has held five or six hearings on aviation issues. Coon expects the T&I Committee will have completed a bill and will have it on the House floor no later than June.

Chris Bertram, the Republican staff director for the Senate aviation subcommittee, said senators have the same sort of schedule in mind, which means they "must have a committee product" (a bill) completed in April or May. "We'll get this done this year. I don't think there's any doubt in my mind," Bertram said.

Gael Sullivan, a Democratic staff member on the Senate aviation subcommittee, said, "There is a broad understanding of the need" for legislation enabling FAA to carry out an airspace modernization program. The subcommittee now is "getting down to the brass tacks and making some of the tough decisions."

The three Hill staffers did not address details about what kind of financing system the reauthorization legislation will provide for, but Coon said he expects it will include $1 billion in tax increases per year "at a minimum." Coon noted that the commercial carriers and general aviation advocates have been at odds over the issue of user fees. He also indicated that some of the user fees suggested by FAA in its reauthorization proposal are worth looking at, noting that it currently costs an applicant $10 to obtain a pilot's license, but that it probably costs FAA $35 to process that application.

The air carriers have been pushing the issue of equity in taxes and fees among all users of the National Airspace System, Sullivan said. "That's something we're looking at," he said, adding, "but [determining] how you get there is difficult. Everyone's going to have to contribute," he said.

National Business Aviation Association President Ed Bolen, who also addressed the Chamber of Commerce gathering, told BA just before the congressional panel spoke that he believes a business/general aviation coalition that favors the current FAA financing system and opposes new user fees has been having some success in conveying its message to members of Congress. The general aviation community has been getting more involved in the lobbying effort, Bolen said. "I think we've made progress. I don't think we've won," reiterating the need to keep up the lobbying pressure. Following the remarks by the congressional staffers, Bolen said it is clear that user fees in some form are still part of the discussion on Capitol Hill as staffers are getting ready to start writing reauthorization legislation.

Airline Lobbying Blitz

It also appears the airlines may be getting ready to step up their lobbying efforts in support of a user-fee funding scheme for FAA. Doug Parker, the chairman and CEO of US Airways Group, the kickoff speaker at Wednesday's meeting, claimed the airline industry is being taxed at rates comparable to those applied to cigarettes and alcohol. "We have to get a better understanding in this town of what taxation is doing to our industry," he said, complaining that the airlines "can't seem to pass along costs to our customers." Projections are that the airlines will make $4 billion in profits in 2007 on a revenue base of about $100 billion. That four percent return is paltry compared with many other industries, Parker observed, particularly in light of the fact that U.S. carriers have lost a collective $40 billion in the five years since 2001.

Parker said the airline industry hasn't been involved in the reauthorization debate as much as it should, but he predicted "that's going to change soon." A key part of the message the airlines will attempt to convey is that commercial airline users are charged more than other segments of the aviation community for the services received from FAA. "We applaud the efforts of the [Bush] Administration" for advocating a new FAA funding formula in the reauthorization legislation it proposed, Parker said.

Jack Pelton, the chairman, president and CEO of Cessna Aircraft Company, had a much rosier description of the business and general aviation industry. Noting the $18.8 billion in sales recorded by business aircraft manufacturers in 2006, Pelton said the industry is probably "as strong as it has ever been." But he warned that could change quickly if the Bush Administration's reauthorization plan is adopted.

Describing a scenario under which user fees are imposed on business and general aviation and "the airlines get the bailout they seek," he said general aviation would decline due to higher operating costs. "Small and medium-size businesses now relying on general aviation will probably have to get rid of the airplane because they can't afford the new fees," Pelton said, which will lead to declining GA production and a loss of jobs. "As for the system itself, the airlines will exert more and more control over the use of airspace as they have in Europe, and GA will be relegated to only the super-rich owners or companies."

The debate over FAA reauthorization "is critical to the future well-being" of the GA industry, he said, cautioning, "The last thing we need right now is a grand experiment that has already proven to be a failure in other countries."