Charter and fractional business jet operators would pay one-third fewer aviation taxes, if air traffic control shifted to a user-fee system based on a weight-distance formula such as the NavCanada model, according to the Reason Foundation, a conservative think tank. The Bush Administration is promoting user fees in its latest bid to modernize the air traffic control system. While the Air Transport Association (ATA) favors the approach, wanting all users to pay the same regardless of aircraft size, business and general aviation groups have uniformly opposed user-fees in favor of aviation fuel taxes and retaining congressional oversight. The Regional Airline Association, however, has yet to take a position until it sees a specific proposal from the Federal Aviation Administration (FAA). (RAN, June 19, p.1) Congress is scheduled to re-examine the funding structure next year.

Reason, which has repeatedly called for the commercialization of the air traffic system, found that fractionals and charters pay four to five times as much as corporate-owned aircraft for identical services. Consequently, the same jet can pay three different amounts, depending on ownership. The study compared current aviation taxes with several hypothetical air traffic control user fee scenarios for 15 commonly used business jets, ranging from the Boeing (BA) BBJ to the Eclipse 500.

"Many trade groups have taken positions against any consideration of user fees," said Robert Poole, director of transportation for the organization and author of the report. "But that opposition doesn't reflect the possible direct cost savings to many operators in shifting from taxes to fees. Nor does it reflect the long-term gains all operators would reap from an improved air traffic system with double or triple today's capacity."

Poole, who has advised both Democratic and Republican administrations, also indicated that corporate-owned jets that pay the least today would break even with the NavCanada user fee model, if the new user-fee structure brings about a modernized system "that saves at least three to five percent of annual flight hours by reducing delays."

However, according to the National Business Aircraft Association (NBAA), the NavCanada model has its problems. "There is enough in the NavCanada experience for everybody to look at it and come to different conclusions," said President and CEO Ed Bolen, adding that while it is true rates went down during the initial period, rates have repeatedly been raised, which is a continuing, disturbing trend.

He pointed to the rate increase in the immediate aftermath of 9/11, when traffic evaporated along with revenues to fund the organization. He also noted that the increase came at a time when users could least afford it and added NavCanada has raised fees four times in the last five years. "We can't lose sight of the fact that there is a general taxpayer base that helps fund the system, something we can fall back on," Bolen said. "We don't want to lose that."

The Reason report and a compilation of the organization's research is available online at http://www.reason.org.