Senate and House FAA Bills Are Both Flawed

Though I have concerns over some of its provisions, I’m glad to see the Senate Commerce Committee finally moving forward on FAA reauthorization. By the time they get the Senate bill passed and into conference committee with the House, it will be two full years since the previous authorization lapsed (to be extended again and again, since September 2007).

First, the good news. The Senate bill is for just two years. That jibes with the Administration’s intent to replace most of the current aviation excise tax structure with air traffic control user fees after 2011. That is a long-overdue reform that’s been supported by a half-dozen expert national commissions, most recently one chaired by Norman Mineta.

And the Senate bill does not contain the ridiculous protectionist nonsense of the House bill, attacking global airline alliances and imposing new inspection requirements on FAA-certified foreign repair stations. These provisions pose serious risks to U.S.-Europe cooperation in aviation. There is no problem in these areas that Congress needs to solve.

But the Senate bill is flawed in at least two important ways. First, unlike the House measure, it does not permit a much-needed increase in the cap on passenger facility charges (PFCs) at airports. This local self-help measure has become a vital funding source for expansion and modernization of airport facilities, but the current $4.50 cap has not kept pace with construction cost inflation. The House bill calls for a reasonable increase.

Also, the Senate bill in its own way seeks to micromanage the FAA’s Air Traffic Organization as it begins implementing the much-needed NextGen modernization. The old saying that “Too many cooks spoil the broth” is applicable here. Congress created the ATO to be a businesslike entity, yet refuses to delegate to it the ability to make management decisions about major modernization programs like NextGen. We do not need either house imposing new management structures or setting specific deadlines for implementing pieces of NextGen. Instead, Congress should allow the ATO to function as it was intended to do, working these things out with its aviation customers.

The prospects for an FAA bill being passed this year are much better than in the 110th Congress, when disputes between the House and the Senate over user fees, a standoff over confirming the FAA administrator, and the high-profile presidential election allowed previous bills to be neglected. Now that a single party controls Congress and the White House, the FAA can no longer be used as a partisan political football. FAA reauthorization is years overdue. The time horizon envisioned by these bills (two and three years) is still too short; the agency needs the direction that a five-year authorization would provide. (Although Mr. Van Beek's hypothesis about the short reauthorization period will allow for user fees to be tested sooner than later is one reason that it might make sense now.) Furthermore, a five-year reauthorization would align with Randy Babbitt's term as FAA administrator, allowing him greater latitude to lead the agency without the attendant congressional interference--some might say meddling--that reauthorization bills encourage.

The prospects of passage are also improved due to the lack of a user fee provision. My own view is that most independent observers support incorporating user fees into funding for ATO operations as a way to rationally allocate use of the air traffic control system, and a pilot program would be useful in assessing how user fees work. Since the Obama administration also supports a user fee proposal, expect this issue to crop up in the near future.

I won't repeat the particulars of the bill mentioned by previous respondents, other than to say that Mr. May is right to applaud the Senate bill for not including James Oberstar's three-year antitrust immunity sunset provision, which would chill further international cooperation and interfere with previous agreements negotiated in good faith. Additionally, Ms. Carmody notes that mere bureaucratic fiddling is unlikely to move NextGen forward. The Senate bill seems to obscure the progress made in testing and implementing NextGen technologies thus far.

Both the Senate and House bills continue to pour money into Essential Air Service in what can only be called a patronage program for rural members of Congress. The Senate increases the appropriation to $175 million and the House to $200 million, with scant evidence that massive increases in the subsidy (in this case, about $50 million) increases rural connectivity or even communities served. Additionally, a House subcommittee has approved a similar increase for this year in the transportation appropriations bill. As several senators told the Obama administration, "The Essential Air Service program was a promise made to rural America, and a promise that must be kept." It was a promise made more than three decades ago for a transition period of ten years; the program has outlived its usefulness, and lawmakers should devote their attention to--as Transportation Secretary Ray LaHood has said--finding more efficient ways to serve rural areas.

There's much more to the bill, and I look forward to the debate and conversation in the coming weeks.

I certainly agree with the previous bloggers that the FAA and its programs need to be reauthorized. Additional partial-year extensions give the industry little ability to plan and create a tremendous burden on the agency and its grant recipients.

While the current House and Senate legislation provide additional revenue for the short-term needs to modernize the air traffic control system, they do not deal with the structural shortfall in revenues that will inhibit the ability of the FAA to meet the medium- to long-term needs of the system including those related to hiring controllers, funding airport capacity, and finally getting to the task of air traffic control modernization.

The uncommitted balance of the Airport and Airway Trust Fund (AATF) is under $2 billion at a time when ticket tax, segment fee, and fuel tax revenue continue to drop. In the long run, this means that the billions of additional dollars required for modernization would have to come from taxpayers and the general fund, an unlikely prospect given the deficit and the other demands on the funds. Given that, it is probably good that the House and Senate are looking at relatively short reauthorizations so that additional user-generated revenues can be set aside during the next authorization cycle (and hopefully joined by general fund contributions that account for the non-user benefits of air traffic control). Presumably by that time Congress and the Industry will have greater confidence about the FAA's plans and schedule on modernization.

An increase in the current $4.50 PFC to $7.00, as included in the House bill, is overdue and would (1) put thousands of people to work at a time when unemployment is at 9.5%, (2) allow critical airport capacity, safety and noise mitigation projects to proceed (such as the O'Hare Modernization Program), and (3) provide millions of additional dollars to smaller airports in additional AIP funding (when PFCs are increased larger airports give back their rights to AIP entitement funding that then by law flows to smaller airports).

It is important to remember that PFC projects are discretionary for airports; require FAA review and approval; airlines are compensated for their ticket collection of PFCs; and that the revenue stays at the airport where it is collected. This is why PFCs are a true user fee and are not a tax: airports that don't want to impose a PFC do not have to and those that want to must have eligible projects in order to impose.

PFCs are a great example of industry self-help, cost recovery, and sound policy. In the long-run projects funded by PFCs also take pressure off the AATF and airline balance sheets by not requiring federal ticket taxes or increases in terminal rents and landing fees that are typically set by the terms of airport-airline use-and-lease agreements.

At a time when many airlines are charging $20 for checking a bag, an additional $2.50 user fee for a new runway, taxiway, runway safety area or terminal expansion appears to be a sound policy.

Steve Van Beek

First, I am glad to note that the Senate Commerce Committee has directed FAA to move forward on at least two areas which will improve safety: applying research on pilot fatigue to the flight time rulemaking, and providing pilots (not only controllers) information about potential runway incursions. My time at the NTSB convinced me of the importance of these issues.

But what struck me and what I will address are the organization proposals to expedite ATC modernization. The bill proposes creation of an ATC modernization oversight and a chief Nexgen officer. Heavens! Does anyone think this will fix things? What about the ATO? The JPDO? The Nexgen Senior Policy Committee? These were Congressional attempts to address the fact that FAA has not been able to implement the future system. Mandating more statutory positions, more reporting chains, more oversight committees will cause additional delays and confusion. The legislation has created a number of deadlines for adoption of GPS technology, has directed FAA to accelerate timelines for ADSB, and has directed FAA to realign airspace. These are certainly worthy objectives. Would it be heresy to expect the Administrator to do it? He has the responsibility for the agency; why not the ability to decide how to organize it to suit the requirements?

As I recall, the ATO was created to facilitate the modernization of the ATC system. After some time, and much wrangling as to whom the ATO would report to, the ATO was established. Along came the JPDO, with more confusion over reporting chains. I believe the House bill contained a provision to elevate the Director of JPDO to Associate Administrator, reporting to the Administrator. Now the Senate has proposed a “Chief Nexgen Officer.” In my long years of FAA watching –from within the agency, from the Hill and from NTSB – I am not convinced that the many directed offices, positions, and boards have yielded much. More often, such creations have cost time, money and role confusion.

Much attention is given to the selection of an Administrator. Congress has provided ample direction with respect to its priorities. Let the Administrator undertake the job without having to accommodate directed organizational changes which may or may not be what he would choose to fulfill the agency’s charter.

ATA commends the Senate Commerce Committee for its hard work in drafting the FAA reauthorization bill – this far-reaching and important legislation is significantly better for passengers and the aviation system than the House bill, for several reasons. The Senate bill takes positive steps to expedite modernization of the ATC system and reasonably addresses several safety-related areas, including FAA deadlines for RNP/RNAV procedures at major airports, a study of flight and duty time, and establishment of a system for inspection of foreign repair stations.

Just as importantly, the Senate bill does not include two harmful House bill provisions: an antitrust immunity sunset provision and a provision that raises the PFC cap from $4.50 to $7. Both would have done nothing more than increase costs to passengers during a difficult economic period.

This bill is not perfect, however. There will be very harmful unintended consequences to both passengers and the efficiency of the ATC system with imposition of a hard-and-fast rule requiring airlines to give passengers the option to deplane after three hours. If a flight returns to a gate and is cancelled, passengers could be delayed into the next day, if not longer. Re-accommodating passengers would be a near impossible challenge because today’s flights are more than 80% full. Even if a flight isn’t cancelled, planes will lose their place in line to depart, by being forced to go back to the terminal or pulled out of line to deplane a passenger. The fact is, airlines are doing a much better job of responding to lengthy tarmac delays.

ATA pledges to continue to work closely with the Senate to ensure that our mutual goals of acceleration of NextGen technologies and safety while doing no harm to a fragile airline industry are met.

I applaud the bipartisan FAA Air Transportation Modernization and Safety Improvement Act introduced this week by the Senate Commerce Committee.

It’s imperative that Congress pass an FAA Reauthorization bill this year to provide airports and the aviation industry the stability to plan for the future. Chairman Rockefeller, Ranking Member Hutchison, along with Senators Dorgan and DeMint, have put together a much needed proposal to enhance aviation safety and modernize our nation’s air traffic control system by accelerating the implementation of NextGen.

The increase in the Airport Improvement Program to $4 billion in 2010 and $4.1 billion in 2011- and a special provision to allow those airports whose enplanement numbers have dropped below 10,000 in either 2008 or 2009 to continue to be eligible for AIP grant money at their 2007 funding level -- will go a long way in helping the airport industry. ACI-NA has advocated the need to address the unique challenges faced by small airports during these difficult economic times, and we are pleased that the bill includes this important provision.

While the ACI-NA had pushed for the PFC increase, it was no surprise that it wasn’t in the Senate legislation. We expect that this will be one of many issues decided in House-Senate conference. ACI-NA believes the PFC should be increased to at least $7.50, and should in the future be indexed to inflation. Airport capital needs are growing, and we will need to meet the future demands of the system, which, according to our recent survey on airport capital needs, are estimated to be $94 billion over the next five years.

We also appreciate the Committee’s recognition of the vital role airports play in NextGen by including an airport CEO on the Air Traffic Control Modernization Oversight Board. NextGen begins and ends at the airport, and we need to continue moving forward with our infrastructure improvements in order to ensure our airports are ready for the increased traffic that NextGen will allow.

ACI-NA looks forward to working with both the Commerce and Finance Committees to assist them in passing the bill so it can be conferenced with the House. It is imperative that Congress complete its work on an FAA Reauthorization bill this year.