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Monday, January 19, 2009

House Includes Aviation Spending in Stimulus Package

It is little wonder that aviation groups differed on their take of the House stimulus package with Air Transport Association expressing disappointment and the American Association of Airport Executives applauding the bill which was $500 million short of the $4 billion industry request.
Very simply, the package included $3.5 billion for airports but not a dime for NextGen equipage, a critical necessity in advancing the benefits of NextGen before the planned implementation date in 2025. The money for airports included $500 million to install explosive detection systems in airports.
“We are very disappointed that the House missed a real opportunity to make the necessary investments in air and ground infrastructure to create jobs and better serve our passengers,” said ATA President and CEO James C. May. “This critical investment not only would create new jobs, but also would promote clean energy technology, enhance safety and security capabilities, improve operational performance and reduce FAA operating costs to help stimulate our ailing economy. We will continue to encourage Congress to make the investment in the modernization of our nation’s air traffic control system to jump start these significantly important programs and their benefits.”
ATA and AAAE are part of a coalition formed to push through aviation spending in the stimulus package. The coalition cited benefits beyond job creation including reduced emissions and environmental impacts, enhanced safety and security, reduced FAA operating costs, an all-weather system for general aviation airports and reduced flight delays.
Using the FAA methodology for calculating jobs created, it is estimated that an infusion of $4 billion in funding for NextGen would generate 77,000 jobs, said the coalition. They wanted funding to include:
• ADS-B ($2.2 billion);
• RNP Equipage ($500 million)
• FAA RNAV/RNP Procedure Development ($20 million);
• FAA LPV Procedures Development ($500 million);
• Electronic Display Upgrades (including EFBs), ($458 million)
• GBAS, ($370 million)

AAAE President Chip Barclay applauded efforts in Congress to expedite the construction of critical airport safety, security, and capacity projects as part of economic stimulus legislation, noting that federal funding and policy changes affecting the tax treatment of airport bonds would greatly improve the nation's air transportation system while creating numerous high-paying construction jobs.
In last month’s letter to Congress the coalition joined to urge additional initiatives beyond infrastructure spending citing the fact that the industry “(which includes aircraft, engines and parts manufacturers, airlines, airports, pilots, aircraft owners and the general aviation community) directly and indirectly generates over 10 million jobs and $1.2 trillion in economic activity annually.” In addition, the group noted that in 2006 industry activity represented approximately 5.6 percent of the U.S. Gross Domestic Product (GDP), according to the Federal Aviation Administration. In addition, U.S. employees in aviation-related fields paid taxes on about $369 billion in payroll. The National Air Transportation Association estimated last month that $30 billion in transportation infrastructure spending would create 800,000 jobs. Related Story
“Congress recently estimated the cost of air traffic control (ATC) system delays economy-wide at over $40 billion,” said the coalition. “Although $4 billion is only a fraction of the estimated total of $20 billion in required equipage costs, it will provide a sufficient jump start to significantly accelerate these programs and their benefits.
“Airport executives are encouraged that Congress is on track to approve economic stimulus legislation that provides billions of dollars in additional funding to airports for key security, safety, and capacity projects,” Barclay said. “Direct federal funding along with the elimination of the negative tax treatment of airport private activity bonds will ensure that construction begins quickly on hundreds of thoroughly vetted, highly beneficial airport construction projects across the country. The end result will be the creation of tens of thousands of high-paying jobs and an enhanced air transportation system. Airports across the country are prepared to move forward quickly with billions of dollars in important airport construction projects if Congress and the new administration can adopt proposals to free additional capital to airports through the elimination of the AMT penalty on airport bonds and provide additional federal funding. We urge quick action on this important legislation.”
Next stop for the industry? The Senate.

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