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House Cuts AIP Funding, Leaves PFC Cap
February 18, 2011
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  • By Jennifer Michels

    February 12, 2011

    House Transportation & Infrastructure Committee Chairman John Mica (R-Fla.) dropped his FAA reauthorization bill into the hopper Friday, containing provisions that would put a squeeze on service to, and projects for, airports nationwide.

    The proposed four-year bill (H.R.658) would keep the passenger facility charge cap at $4.50 instead of raising it to $7 or eliminating it entirely, which was a last-minute request from airports. Airlines, through the Air Transport Association, have fought hard to keep the cap in place. The bill also cuts Airport Improvement Program (AIP) funding to $3.176 billion per year, which is $500 million less than the current appropriated level. The last version of this bill, which did not pass, increased AIP funding to $4.1 billion for fiscal 2011 and to $4.2 billion for fiscal 2012.

    The Essential Air Service(EAS) program, which Sen. John McCain (R-Ariz.) has been campaigning to cut entirely as an unnecessary subsidy, would be reduced in this new House bill, until it is eliminated in 2013 everywhere but Alaska and Hawaii. The new bill provides only $148 million in fiscal 2011, $110 million fiscal 2012 and $80 million in fiscal 2013. EAS currently receives about $250 million, and the previous House-passed bill set the level at $200 million. This new proposed bill also would require $50 million each year in EAS funding to be paid by overflight fees.

    Airports Disappointed

    Airports Council International-North America President Greg Principato said: “Airports are disappointed that the authorized funding level for the job-creating Airport Improvement Program falls short of the amount necessary to ensure passenger safety, security and airfield maintenance.

    Also, that the Committee chose to continue to limit the ability of local communities to finance local projects with local money. Without adequate investment in ground infrastructure, there can be no NextGen.”

    The bill, according to the committee, “streamlines processes and provides funding for priority NextGen air traffic control modernization projects planned in the next four years. It sets deadlines and metrics for better measurement of NextGen progress and to ensure more effective cost management.”

    The Senate has been debating its version of the bill on the floor for several days, and had been unable to reach a compromise on easing slot restrictions at Ronald Reagan Washington National Airport, which may have changed by press time. Under current law, nonstop flights of more than 1,250 miles are not permitted, with some exceptions. The House bill includes compromise language on the perimeter slots by 10 without increasing the total number of flights. The House bill is slated to be marked up Feb. 16 and the Senate may pass its bill this week.

    The ATA is backing the bill while also urging more investment in the satellite-based NextGen air traffic management program. “ATA applauds Chairman Mica and the House T&I Committee for crafting a bill that recognizes the critically important role that airlines play in driving the economy and job growth and takes measures to promote global competitiveness of the U.S. airlines while not further harming an industry and its customers already overburdened with taxes,” said ATA President and CEO Nicholas E. Calio. “We urge Congress to pass this bill and to invest in a NextGen air traffic management system that will improve the industry’s safety and efficiency.”

    Alternative PFC Collection

    What the bill does not contain are previous sticking points on a FedEx provision, PFCs for bike storage at airports, a cell phone ban on aircraft and antitrust immunity sunset.

    The bill would fund the FAA at $9.403 billion in the first year and $9.168 billion for the next three years. It will save $4 billion, Mica said, requiring the FAA to “find significant cost savings without negatively impacting safety.”

    Some of the funding levels in the bill include $2.7 billion in fiscal 2011 and then $2.6 billion for the next three years for air navigation facilities and equipment, and $3.2 billion in the first year and $3 billion thereafter for airport planning and development and noise compatibility planning from the Airport and Airway Trust Fund.

    The bill also would allow a pilot program to be established at no more than five airports to charge a PFC to pay for an intermodal ground access project. The Comptroller General of the Government Accountability Office also is directed to conduct a study on whether the PFC could be collected in another way, and not as a part of an airline ticket price. This could perhaps be something collected by the airport. ACI’s position is that airlines are paid to collect and remit the PFC, which is an effective mechanism for local projects to be financed by passengers using that airport. Airlines last year earned $80 million from the 11 cents they are given for each PFC they collect. The Senate bill also has a pilot program for up to six airports to test collecting an unlimited PFC. One issue that may arise is, of course, backing up lines at airports.

    The Small Community Air Service Development Program, which was to receive $35 million annually in the last bill, would be eligible to receive only excess funds from overflight fees. One benefit to airports is that language has been stripped out that would have raised their costs by imposing new National Fire Protection Association standards.

    The bill also requires the FAA to study flight attendant fatigue and issue a report by Sept. 30, 2012. It also requires airlines to allow passengers to carry musical instruments in the closet, baggage compartment or cargo stowage compartment if there is space. This will come as a relief to musician Dave Carroll, famous for his YouTube video “United Breaks Guitars.”,%20Leaves%20PFC%20Cap

    AVIATION WEEK2011-02-12false