Senate Speeds FAA-Overhaul Bill Private-Jet Users Face Higher Taxes; Some Limitations
July 29, 2009
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    April 26, 2008

    WASHINGTON — Senate negotiators reached a deal Friday that will accelerate legislation to overhaul the Federal Aviation Administration amid mounting problems with the agency’s oversight of airline safety. Action could start as soon as Monday, and final passage could come in less than a week.

    The proposed legislation would have far-reaching implications for the FAA, industry and consumers. Private-jet travelers would have to pay additional taxes to help finance a multiyear transition to a satellite-based air-traffic-control network. The agency touts the new network as the best cure for the delays and congestion plaguing air travel.

    Problems are mounting with the FAA’s oversight of the crowded skies.

    But the FAA may also face significant limitations on how it implements the next-generation system, and it could be forced to adopt a variety of new safety practices and consumer protections.

    Action on the FAA bill accelerated after Senate Majority Leader Harry Reid (D., Nev.) on Thursday filed a motion to call for a procedural vote on Monday. That increased pressure on Senate negotiators to reach a deal.

    “We’ve got a real problem on our hands,” Mr. Reid said on the Senate floor Thursday after meeting with aviation unions. “We’re going to approach this FAA reauthorization to try to direct attention to some of the issues we read about every day: 3,000 flights being canceled, airlines flying with improper equipment.”

    Airlines have won some early battles in negotiations over provisions of the bill but still face several provisions that could raise their costs. General-aviation users — including business jets — also will almost certainly see their fuel taxes rise. Another wild card is the Passenger Bill of Rights, which could give passengers the right to get off airplanes that have been stuck on the tarmac for three hours or more. This provision is strongly opposed by the airlines.

    The House has already passed its version of the bill, but progress in the Senate was bogged down for nearly a year over a user-fee dispute pitting major airlines against business jet and general-aviation groups. A series of recent events, including revelations that FAA managers allowed Southwest Airlines Co. to fly planes that were overdue for inspections and a wave of aircraft groundings at AMR Corp.’s American Airlines and other carriers, rekindled momentum recently.

    Staffers from the Senate Commerce and Finance committees held negotiations throughout this week in an effort to resolve their major differences on the bill. Friday afternoon, negotiators reached agreement to end a long-running dispute over how to fund air-traffic-control modernization.

    Sen. Jay Rockefeller (D., W.V.) and the Senate Commerce committee sought to slap a $25 user fee on commercial- and business-jet flights using controlled airspace, a move that would force corporate jets to pay more for air-traffic-control services. Airlines would still pay the most overall. But Sen. Max Baucus (D., Mont.) and the Senate Finance Committee rejected the user-fee approach, opting instead to follow the House-passed version and raise taxes on fuel for private jets. Mr. Rockefeller on Friday finally dropped his $25-fee demand in exchange for hefty fuel-tax increase for general-aviation users. Under the deal, the tax on fuel used by private-jet owners will rise to 36 cents from 21.8 cents per gallon. Overall, the Rockefeller-Baucus deal will provide as much as $800 million for air-traffic-control modernization.

    Airline officials were disappointed that the user-fee idea was surrendered, but they did prevail in their effort to avoid paying higher fuel taxes. They are hoping to secure some fuel-tax relief if crude oil prices stay above $100 a barrel, and they may also dodge a proposal to raise fees on international tickets. Airline lobbyists have been making their rounds on Capitol Hill with a chart suggesting the industry is going to pay $18 billion more for fuel this year compared with last year.

    “Now isn’t a good time to be asking commercial aviation for more,” a Republican staffer conceded.

    The funding agreement will open the door next week to a flood of amendments touching on safety, consumer rights and other aviation matters.

    Several senators plan to introduce amendments in response to some of the safety issues that have recently emerged. Sens. Olympia Snowe (R., Maine) and Amy Klobuchar (D., Minn.) want to force the FAA to act on inspection-related recommendations made by the Transportation Department’s inspector general. Among them: forcing the FAA to set up a special team of inspectors that will travel the country and conduct spot audits, and a requirement that inspectors take a “cooling off” period if they want to work for an airline they used to oversee.

    A Transportation Department spokesman said the agency is evaluating the various proposals but declined to comment further. Privately, administration officials said it may be preferable if the bill fails to pass under the weight of so many competing amendments. Other observers said they expect Senate passage as early as next week but expect larger battles to occur during a House-Senate conference.

    Write to Christopher Conkey at

    Date: 2008-04-26