Francois Shalom Montreal Gazette
Business Aviation Industry Up in Arms over Obama's Comments About Corporate Jet Users
October 11, 2012
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  • By Francois Shalom

    MONTREAL — The business aviation industry again has U.S. President Barack Obama in its sights.

    The National Business Aviation Association (NBAA) has fired off a letter to the White House complaining bitterly about the president’s comments on its industry during last week’s debate with his Republican opponent, Mitt Romney.

    At one point, Obama said “why wouldn’t we eliminate tax breaks for corporate jets? My attitude is if you got a corporate jet, you can probably afford to pay full freight, not get a special break for it.”

    The president was referring to his proposed reduction in tax writeoffs for corporate jet owners, as well as to proposed landing fees of up to $100 per flight.

    Lobby group NBAA and its members oppose the measures, charging that any additional burdens or restrictions on the sector imperils jobs in manufacturing and aircraft services, and would create a bureaucracy for collection of the fees.

    Critics of tax breaks the industry receives, though, argue that landing fees of up to $100 per flight are not excessive for owners or users of airplanes worth between $3 million and $60 million.

    So would adoption of the measures threaten jobs at Bombardier Inc.’s business aircraft division, the world’s largest maker of corporate jets?

    Not likely, said Danielle Boudreau, spokesperson for Bombardier Business Aircraft.

    But she added that most business aircraft users are small and medium-size firms, not big corporations, and anything that adds to their burden acts as a brake on their airplane-buying decisions.

    “We would never go as far as commenting on the U.S. president’s views,” Boudreau said. “Obviously, we do support business aviation. It’s an integral part of communities all over the world, allowing them to serve destinations that aren’t served by commercial aircraft.”

    She echoed the NBAA’s view that business aviation is unfairly tarnished, mostly by the media, with little corresponding appreciation for the economic benefits it provides.

    Bombardier employs about 15,000 people in the Montreal area, most of them at its business-jet unit — the company does not break it down precisely because some workers perform functions for both divisions, business and commercial.

    NBAA president Ed Bolen complained that Obama’s statement “was misleading and easily misconstrued. Equally important, at a time when both candidates claim to be putting job creation at the top of their agenda, it is unfortunate that the president chose to target our industry, which supports 1.2 million American jobs and generates $150 billion in economic impact.”

    The issue was front and centre at last year’s NBAA convention in Las Vegas, after one aircraft-maker president fulminated against Obama in personal terms about the policy proposals. He was dumped as CEO by his company shortly thereafter.

    He urged members to help NBAA lobby Congress in its favour to defeat the proposals.

    Dan Hubbard, an NBAA spokesperson, said from Washington that his association is convinced the proposals would create a cumbersome bureaucracy.

    That claim is hotly disputed by supporters of the measures, who say that the fees would easily be collected by the existing aviation infrastructure, which would not need any additional staff.

    Hubbard noted that the NBAA is not opposed to any and all measures and has in the past supported bills that proposed fuel tax hikes.

    He added that his association could notionally support increasing fuel taxes to replace the proposed fees — but that he couldn’t pronounce his organization’s support until an actual bill is tabled. Such bills have failed in the past.

    “We have what we believe is an effective and proven system for use of the aviation system,” Hubbard said.