Regional Aviation Partners is calling on Congress to exempt small airlines operating aircraft of 10-30 seats from the Senate-proposed $25 modernization fee set to fund the NextGen Air Traffic Control System. The fee, said RAP, would lead to the elimination of both subsidized and unsubsidized air service to small communities.
“If the $25 user fee were to become law as currently written, the fee would impose an additional burden on small turboprop operators of more than 550 percent in some cases,” said the organization, “and threaten the future of scheduled air service in a large number of small communities. In the case of the small number of air carriers who serve small communities on an unsubsidized basis, the ‘user fee’ has the ‘certainty’ to generate substantial losses which these companies cannot absorb.”
RAP provided two examples of the impact of the new fee which would replace the fuel tax. “Great Lakes Aviation was recently awarded a contract to provide subsidized air service to Quincy with service to St. Louis,” said RAP. “Great Lakes’ first year subsidy rate included fuel and oil expenses of $480,569 for which the carrier could expect to pay $11,277 in federal excise fuel taxes; however, if the current FET is replaced with a $25 user fee, Great Lakes could expect to instead pay $61,350. This represents a difference of approximately $50,000 or a 444 percent increase in expenses to the air carrier.” It illustrated the impact this would have on essential air service when it noted Great Lakes represents 29 percent of the total EAS program in the lower 48 states.
Similarly, RAP pointed to Big Sky’s new Delta Connection service in New York. “Yet another example can be found at Massena, Ogdensburg and Watertown, NY where Big Sky Airlines was recently awarded a two-year contract by the DOT,” it said. “Big Sky’s proposal lists $1,329,625 in annual fuel and oil expenses for which the carrier could be expected to pay $48,506 in federal fuel taxes annually. If the $25 user fee becomes law, Big Sky can expect to pay more than $123,575 annually. This represents approximately $75,000 in additional annual expenses to the carrier for three EAS markets, a 155 percent increase. Big Sky also provides service to a number of unsubsidized small communities and imposition of the user fee as written will cause them to look closely at the numbers when making business decisions on what communities they will serve.”