President Obama’s 2015 Budget reopens an unfortunately futile battle over Aviation User Fees

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PRESS RELEASE: NBAA: President Should Ditch Latest Aviation User Fee Attempt


President Obama’s fiscal year 2015 spending proposal, at the page numbered “957” states“…the Administration proposes to establish a new surcharge for air traffic services of $100 per flight.” The rationale for this fee is stated there as follows:

To more equitably distribute the cost of air traffic services across

the aviation user community, the Administration proposes to establish a new

surcharge for air traffic services of $100 per flight. Military aircraft, public aircraft, piston aircraft, air ambulances, aircraft operating outside of controlled airspace, and Canada-to-Canada flights would be exempt.”

Not surprisingly, the Secretary of Transportation’s press release on the 2015 budget does not mention the $100 equitable fee.

The question of whether or not the President’s or any other proposal is more or less equitable than the current system based on a passenger ticket tax and fuel charges has always been the subject of heated debate fueled by diverse opinions from different segments of the industry.

The response from the business aviation community is a repeat of the theme when the same President proposed the same tax a year ago.. NBAA made it clear that the President seemingly has rejected the strong position of Senators, Representatives, Governors, Mayors and industry stakeholders that such fees are “dead on arrival”. Recently four Congressmen (the majority and minority leaders of the House aviation subcommittee) reiterated their opposition .

The association’s President and CEO made it clear where his organization stands:

“NBAA will continue to work to defeat user fees and support the aviation fuel tax mechanism as the most effective way for us to contribute to the system…I know that if our business aviation community continues to let Congress and our state and local officials know of our concerns, we will be able to continue ensuring that our unified voice is heard.”

Unfortunately, this is another battle which will detract from aviation’s most significant policy issue- NextGen, its essential elements, funding and governance. This tax proposal is not specifically tied to the funding of this infrastructure investment nor is there any text which would suggest for what the dollars are needed.

Funding of NextGen is complex and needs to be addressed. This simplistic proposal does not advance the debate.

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3 Comments on "President Obama’s 2015 Budget reopens an unfortunately futile battle over Aviation User Fees"

  1. Sandy Murdock | March 5, 2014 at 11:03 am | Reply

    .The premise of this “tax” is that it would create a more equitable distribution of the costs. There has been a widespread misunderstanding of the expenses associated with the operation of the air traffic control system.

    The premise of this allocation is

    • that the bank of 30 or so airline aircraft
    • departing from a major airport
    • all within 15 minutes of 9am
    creates the SAME UNIT COST as
    • a single plane departing
    • at an off-peak time
    • from a remote, underutilized facility, plus
    • the time and sectors in transit through TRACONs and ARTCCs—some congested, some not.

    Clearly, the euphemism that a “blip is a blip” is unduly simplistic analysis.

    The sizing of the ATC is defined by the width of the “tunnel” needed to move the scheduled traffic through the airspace. Capital expenditures are devoted to acquire adequate radars, computers, communication systems and positions at the ATCT, TRACON and ARTCC to handle this surge of traffic on departure and arrival. An “equitable” distribution of these costs does not result in all aircraft bearing a flat $100 without regard to the time and place of the flights’ departures and arrivals.

    The true financial analysis of the precise costs would have to differentiate the expenses of the operation by airport/TRACONs/ARTCCs involved and by time-of-day. Unless there is such data available (the federal government is notoriously bad at capturing such numbers with any accuracy), the idea that the President’s tax is or can be “equitable” is not achievable

  2. Joe Del Balzo | March 5, 2014 at 11:22 am | Reply

    Mr. Murdock’s analysis is on point regarding how to determine the cost of service provided. The analysis does not address the fixed cost to establish, maintain and operate the ATM system needed to provide service to all users. This fixed cost needs to be shared equally by all. If that is the Administration’s proposed used for the $100/flight flat fee, the President’s proposal might make sense. The variable cost addressed in Mr. Murdoch’s analysis is insignificant compared to the fixed cost which is massive and may not be worth the trouble to define and allocate.

  3. Sandy Murdock | March 5, 2014 at 1:36 pm | Reply

    Mr. Del Balzo’s reply ignores that the size of the ATM is defined by the peak demands of the airlines; their hubs and. reliance on congested facilities compel the FAA to expand the long term size of its system to meet these demands.

    The size of the fixed cost, particularly the massive equipment (radars, computers, communication) is driven by the peak demands placed on the ATM system by the airlines. Carriers and operators that chose not to hub their operations or need not fly at critical hours ought not to bear the excess expenses occasioned by the airlines which chose to fly in such a way. To be “equitable” in allocating costs, as the Obama proposal pretends to do, (1) the FAA would have to be able to capture costs in a finite manner by day-of-week by hour and by facility (ATCT, TRACON and ARTCC) and (2) be able to track which aircraft uses which facility for how long. In the absence of such granularity, fuel burn and a tax on that surrogate for time of use best approximates the user’s demand on the ATC system.

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