Class Warfare: Big Aviation Players Take On Small Airports Over Money, Putting Ohio Operations in Jeopardy
October 20, 2009
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  • By Marla Matzer Rose

    Ohio State University’s Don Scott Field on the Northwest Side and other general-aviation airports throughout Ohio collectively account for an estimated $5.56 billion in annual economic impact to the state. They also support thousands of jobs.

    The private airports and rural airfields that dot Ohio don’t seem as though they should be threatening to the big airlines that fly most of us to vacations and business meetings.

    But tough financial times have heightened tensions between the two groups over federal legislation that’s off most peoples’ radar.

    The Federal Aviation Administration’s reauthorization bill is making its way through Congress, with the latest three-month extension set to expire at the end of the year. At stake are the way the agency is funded, through various fees and taxes, and the rules under which money is disbursed to all parties in the aviation world.

    FAA funds help small airports maintain or improve their facilities as well as pay for air-traffic control at airports of various sizes. Commercial airlines want private aviation users to pay more toward air-traffic control costs and say that money from the FAA’s Airport Improvement Program fund, which pays for such things as runway repaving, should go only to those airports with commercial service — those where the airlines fly.

    “We’re not saying that there’s no public benefit to funding airport projects of all sizes,” said Elizabeth Merida, spokeswoman for the major-airline trade group, the Air Transport Association. “But the original intention of the Airport Improvement Program was for the money to go to airports with passenger service.”

    An FAA spokeswoman counters that the agency’s rules haven’t changed, and that small airports aren’t getting a disproportionate piece of the funding pie.

    “We’re using the same formula that we’ve been using for 20 years,” said Laura Brown, a Washington-based spokeswoman for the FAA. “It’s not just about the air service and the amount of passengers served. General-aviation airports support many aviation-related businesses, cargo and emergency medical operations. There are a lot of uses other than the so-called ‘fat cats’ flying in private jets.”

    Ohio has a lot at stake, with nearly every county in the state home to an airstrip and the three largest private-jet fleets in the world based here.

    And while the wealthy are among plane owners and users, general aviation also includes farmers, medical transportation firms and cargo shippers.

    And these general-aviation interests — smaller airports and private plane operations that don’t offer scheduled flights — have for several years been the target of a negative public-relations push backed by the airlines.

    The drumbeat started in 2007, as it came time for Congress to take up the reauthorization bill. The major airlines, still reeling from the one-two punch of high fuel prices followed by the recession, argued that they’re shouldering too much of the funding burden.

    The Air Transport Association in 2007 launched an ad campaign, alleging that “bigwigs” on private jets were clogging airspace and not paying their share of the bill for the air-traffic control system via the fuel taxes. No sooner had that quieted down than the recession created new villains.

    Early this year, auto-company executives seeking help from Congress were virtually drawn and quartered for traveling to Washington in company jets — a move even many in the private-jet business say was politically unwise, given the circumstances.

    And just in the past several weeks, two foundations have released studies that appear to favor the interests of major airlines over general aviation.

    To counter the negative image of general aviation painted by others, the industry’s lobbying group, the Alliance for Aviation Across America, has released data showing the economic impact of general aviation across the country.

    In Ohio, the economic benefit is measured in the billions of dollars, the group’s figures show. Ohio’s general-aviation airports, including Bolton Field on the Far West Side and Ohio State University’s Don Scott airport on the Northwest Side, account for an estimated $5.56 billion in annual economic impact to the state and support thousands of jobs.

    Ohio is home to 172 general-aviation airports, 10,386 general-aviation aircraft and 17,352 jobs related to general aviation, according to the alliance’s data. The data also show that the total employment impact of all airports in Ohio is 142,800 jobs.

    Those figures put Ohio among the top dozen states in the country in the number of airports and locally based general-aviation aircraft. Yet the role of small airports as part of the state’s and country’s transportation infrastructure is hard for many to grasp, those in the industry concede.

    “There’s this perception that general aviation is for the rich, but life doesn’t stop when you leave the big cities,” said Doug Hammon, director of Don Scott airport. “Some of the corporations that we have (aircraft for) based at the airport fly to the most remote places.”

    Hammon emphasized that the OSU airport is self-funded from sources such as flight fees and fuel sales, with only structural-improvement money coming from the FAA.

    Despite efforts on the part of the general-aviation lobby to counter the bad publicity, mixed feelings within the industry remain about touting private aviation’s virtues to the public. Many users choose private aviation exactly for that reason: It is a private way to travel and conduct business.

    “I started flying in the ’60s, and the battle between the major airlines and general aviation has been going on since then. It waxes and wanes,” said Alan Harding, director of the Ohio Aviation Association. “But we’ve got class warfare going on now.”

    Private aviation saw a huge expansion in the past two decades, after former NetJets CEO Richard Santulli pioneered the concept of fractional ownership that allowed customers to buy a portion of a jet, much like a time share, that was maintained and staffed by NetJets. A portion of these private jet users would otherwise be paying commercial airlines’ business- and first-class fares, which are critical to carriers’ financial health.

    Business and first-class ticket sales have been weak for a year now, according to the International Air Transport Association. Economy-class travel accounts for about 90 percent of traffic for the major airlines but only about 70 percent of revenue, so the decline of the premium segment is painful to the airlines.

    “The biggest challenge to the high last-minute fares that airlines have gotten for years from business customers is private jets. Anything they can do to discourage the use of business jets without coming out and saying that, they’ll do,” Harding said.

    General aviation serves an important role in bridging the many service gaps left by the major airlines. “Left to their own devices, I think the airlines would fly to about 12 cities across the country,” said Hammon, of the OSU airport.

    Fewer than 500 airports out of about 5,000 in the U.S. have commercial service. Ohio’s commercial airports in Columbus, Dayton, Cleveland and Cincinnati have lost hundreds of flights in the past year, and the entire state has just one nonstop flight to Europe this winter — from Cincinnati to Paris.

    A lack of air service was mentioned by National Cash Register in announcing it would relocate from Dayton to Atlanta this year, and Cincinnati leaders have lobbied Delta to keep its hub there as an important economic-development tool.

    The specter of losing connections to the world was what drove the development of Ohio’s airport system to begin with. The state’s wealth of airports is the product of a “big think” decades ago by then-Gov. James A. Rhodes, said Columbus-based aviation executive Scott Liston.

    “When Jim Rhodes was governor (in the 1960s), he pledged there would be a 4,000-foot runway in each county,” said Liston, executive vice president of Aviation Research Group/U.S. and a former executive with NetJets Inc.

    “With government initiatives that probably started in the Great Depression, you had a 40-plus-year development of a hub-and-spoke system in every method of transportation. It was almost isolating the non-hub parts of the country. Rhodes saw that if it became very difficult to reach the smaller places, those places were really going to be in trouble. Jobs follow infrastructure.”

    General aviation encompasses smaller airports and private-plane operations that don’t offer scheduled flights.
    Number of general-aviation airports
    Number of general-aviation pilots
    General-aviation aircraft
    Employment related to general aviation
    $5.56 billion
    Economic impact of general aviation on the state’s economy
    Source: Alliance for Aviation Across America