ADS-B Loan Guarantee, good idea; FAA as Finance Administrator, not so good

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NextGen is the way of the future of aviation in the United States; no one would disagree with that premise. To do so, aircraft (such as the plane in the above picture) must be equipped with an ADS-B unit. There is some disagreement among GA pilots whether they can afford this capital investment.

The below article asks whether the FAA is exploring an option which may lower the installation cost. Maybe the FAA is not the right organization to undertake this task.

Rep. Graves (R.MO) added language in the FAA Modernization and Reform Act of 2012 to authorize the FAA to establish a Private-Public Partnership that would guarantee loans of up to 90 percent to assist aircraft owners to equip ADS-B on their aircraft. The Congressman sent the Administrator a letter on July 29 asking why there has been no FAA request for dollars to start this initiative and whether the Administrator has contacted the Small Business Administration about getting their support for this innovative financial instrument. The article did not mention any response from the FAA.

The FAA has experience, not particularly good, with an Aircraft Loan Guarantee program that was authorized as part of the Airline Deregulation Act. While the staff worked hard, they had neither the financial competence nor the experience needed to oversee the finances of the airlines for which guarantees were issued. That’s not an easy admission for the Administrator to make, but it is true. The FAA is not a bank and it is generally adverse to risks of any sort.

It might be best to explore whether the SBA could handle the management of this program. That agency’s work with small businesses and banks might make it better qualified.

Good idea, but the “A” in FAA does not connote financial administration competence.

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