Big Airlines Want Small Ones to Pay More to Fly Carriers At Odds Over Funding for Upgrade of Air-Traffic Control
July 29, 2009
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  • By Marla Matzer Rose

    September 23, 2007

    Paying for improved air-traffic control has generated more than just talk in Washington and among airline insiders.

    It’s also hit YouTube in the form of a fat-cat-hating character who’s in the corner of the big airlines.

    Charges are flying that small aviation firms, including at least two in Columbus, cater to “fat cats” and “bigwigs” and don’t pay their share for safety in the skies. That’s thanks to a public-relations campaign recently unleashed by the Air Transport Association.

    The trade group, which represents major airlines, says its members pay an unfairly large share of the cost of the air-traffic-control system and wants private-jet operators to pay higher fees.

    Columbus aviation companies such as NetJets and AirNet Systems could be hit with millions of dollars in extra charges if the major airlines are successful in lobbying Congress for new “user fees” to fund the Federal Aviation Administration.

    It’s expected to cost the FAA — which receives funding directly from the federal government, as well as from taxes and fees levied on aircraft operators — $1 billion a year during the next decade to revamp the overtaxed air-traffic-control system. Everyone agrees the upgrade is badly needed, but who will pay for it is a hotly debated issue.

    Companies that use smaller jets in a variety of capacities say the major airlines’ trade group is using misleading numbers and arguments to make its case.

    The ATA has been aggressive. Its tactics have included organizing Capitol Hill rallies and placing spots on CNN’s in-airport programming. In its YouTube video, a campy character named Aunt Edna says she likes “big wigs,” not subsidizing “bigwigs.” The spot says that high rollers using private jets aren’t paying their fair share, while they add to the congestion plaguing the air-traffic system.

    “I have to admit, their ads are well-done, and they seem to be working to sway people’s opinions,” said Jim Christiansen, president of NetJets Aviation. The company, which has a major presence at Port Columbus, sells fractional ownership, akin to timeshares, of its planes.

    “The real issue is the modernization of the air-traffic-control system,” Christiansen said. “We’re all for that and for paying our fair share. If we had all gotten together in a room and figured out how to really educate the public instead of the ATA spending millions on these ads, this propaganda, we’d all be better off.”

    Cargo carrier AirNet Systems, with headquarters at Rickenbacker Airport, also would stand to take a hit under funding changes proposed by the major airlines. A version being considered in the Senate would institute a $25 user fee per flight, taking off or landing, regardless of the size of the aircraft.

    As of last week, these user fees only remained in the version being considered by the Senate Commerce Committee. The Senate Finance Committee approved a version on Friday that, like the House version, would raise the fuel taxes but would not institute a user fee. A reconciliation of these versions in a final vote could take weeks; meanwhile, businesses such as AirNet remain concerned.

    “Last year, we had about 46,000 flight operations, flying mainly to smaller airports in the middle of the night,” said AirNet CEO Bruce D. Parker. “If what’s being considered in the Senate were to pass, it would mean probably an additional $1.2 million in charges to us as an operator, more than a 50 percent increase over what we pay now.”

    Parker said his company hardly fits the ATA’s image of wallowing in money and luxury. Flying from Rickenbacker every night, AirNet transports everything from lab mice to human kidneys.

    “We don’t serve the ‘fat-cat’ markets,” said Parker, whose company employs more than 500 people in Columbus. “Our concern is that we can’t pass through the costs; we supply transportation for a lot of companies in the life-sciences area — Children’s Hospital, the Cleveland Clinic — that depend on us to keep down their costs.

    Coming off the worst summer on record for airport delays, the entire aviation industry agrees that the U.S. air-traffic-control system needs fixing, and fast. What they can’t agree on is who will pay for it.

    The ATA said it’s basing its position on FAA data showing that commercial carriers pay more than 90 percent of the fees, while accounting for only 66 percent of the flights.

    “It’s not the airport or the aircraft, it’s the air space,” said ATA spokeswoman Victoria Day. “It takes an air-traffic controller the same amount of time to deal with a private jet as it does a commercial one.”

    Doug Church, a representative for the National Air Traffic Controllers Association, said the group doesn’t back a change in funding for the FAA based on such data.

    “We do not support user fees or a change in the current funding system,” Church said. “The (the Government Accountability Office) says the current ticket-tax system will cover the cost of building the next-generation air-traffic-control system. No need to fix what isn’t broken.”

    A trade group representing the interests of small-plane operators goes further.

    The Alliance for Aviation Across America says the major airlines are seizing the opportunity presented by the FAA funding reauthorization to give themselves a “huge tax break” of $2 billion or so, using the same arguments they did against low-cost carriers 10 years ago. In 1997, it was low-cost carriers such as Southwest that weren’t paying their “fair share,” the alliance said.

    Selena Shilad, executive director of the Washington-based group, said the ATA is twisting FAA statistics to bolster its position.

    If you look at the data, Shilad said, “U.S. commercial airlines pay 77 percent of the revenues going into the (FAA) fund, which is quite a difference from the ATA’s figure of 94 percent. To get to that 94 percent number, you have to include cargo and foreign airlines É as well as some (private) aircraft.”

    To make its point that commercial airlines aren’t causing delays, the ATA says that FAA data show only 40 percent of air traffic in the delay-plagued New York area is attributable to commercial airliners. That would include cargo operations and flights at smaller general-aviation airports in the suburbs.

    NetJets’ Christiansen said it’s ridiculous to say that firms such as his are a major cause of the historically bad delays at New York airports such as LaGuardia and John F. Kennedy.

    “We use (secondary) airports. We fly often at off hours, not when the major airlines are scheduling the majority of their flights,” Christiansen said. “We try to talk the owner out of it if one occasionally wants to land at LaGuardia, because of the high landing fees and problems with congestion.

    “NetJets pays well over $50 million for access to the air-traffic-control system. We’d like to focus on the real issue here, which is the modernization of the air-traffic-control system.”

    Date: 2007-09-23